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Stardust over Paris gastronomic restaurants

Author

Listed:
  • Vincenzo Verardi
  • Olivier Gergaud
  • Linett Montano-Guzman

Abstract

In this paper, we study if the leading French gastronomic guidebook, the “Guide Rouge Michelin,†only rates the quality of food, as it claims, or if it also considers environmental variables when attributing stars. We then check how Michelin ratings affect the market, and more specifically, the price charged by restaurants. Using some simple econometric techniques, we find that a small improvement in environment boosts the probability of receiving Michelin stars. Since we also find that a Michelin star is associated to a high price premium stuck (independently of the quality of food), we conclude that expertise induces distortions in the market (JEL classification: D4, L15, L66).
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Suggested Citation

  • Vincenzo Verardi & Olivier Gergaud & Linett Montano-Guzman, 2007. "Stardust over Paris gastronomic restaurants," ULB Institutional Repository 2013/9903, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/9903
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    Cited by:

    1. Gaenssle Sophia & Budzinski Oliver & Astakhova Daria, 2018. "Conquering the Box Office: Factors Influencing Success of International Movies in Russia," Review of Network Economics, De Gruyter, vol. 17(4), pages 245-266, December.
    2. Nicolas G鲡rd Vaillant & François-Charles Wolff, 2013. "Understanding how experts rate cigars: a ‘havanometric’ analysis," Applied Economics, Taylor & Francis Journals, vol. 45(1), pages 99-109, January.
    3. Dakshina De Silva & Caroline Elliott & Robert Simmons, 2013. "Restaurant wars," Working Papers 44312700, Lancaster University Management School, Economics Department.
    4. Fogarty, James Joseph, 2011. "Expert opinion and cuisine reputation in the market for restaurant meals," Working Papers 108666, University of Western Australia, School of Agricultural and Resource Economics.
    5. Joel Waldfogel, 2020. "Dining out as cultural trade," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(2), pages 309-338, June.
    6. Ennio E. Piano, 2021. "Organizing high-end restaurants," Economics of Governance, Springer, vol. 22(2), pages 165-192, June.
    7. Olivier Gergaud & Vincenzo Verardi, 2021. "Untalented but successful? Rosen and Adler superstar Pokemons," Empirical Economics, Springer, vol. 60(5), pages 2637-2655, May.
    8. Bruno S Frey & Jana Gallus, 2016. "Honors: A rational choice analysis of award bestowals," Rationality and Society, , vol. 28(3), pages 255-269, August.
    9. Saverio Dave Favaron & Giada Di Stefano & Rodolphe Durand, 2022. "Michelin Is Coming to Town: Organizational Responses to Status Shocks," Management Science, INFORMS, vol. 68(9), pages 6925-6949, September.

    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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