Ratings Lead You to the Product, Reviews Help you Clinch it? The Dynamics and Impact of Online Review Sentiments on Product Sales
Publication Type
Working Paper
Publication Date
1-2009
Abstract
It is generally assumed that ratings are a numeric representation of text sentiments and their valences are consistent. This however may not always be true. Using a panel of data on over 4000 books from Amazon.com, we develop a multiple equation model to examine the inter-relationships between ratings, sentiments, and sales. We find that ratings do not have a significant direct impact on sales but have an indirect impact through sentiments. Sentiments, however, have a direct significant impact on sales. Our findings also indicate that the two most accessible types of reviews – most helpful and most recent – play a significant role in determining sales. This suggests that information that is easily accessible and cognitive effort-reducing heuristics play a role in online purchase decisions. This study advances our understanding on the inter-relationship between ratings, sentiments, and sales and sheds insight on the relevance of ratings and sentiments over a sequential decision making process.
Keywords
User-generated content, Online consumer reviews, Sentiments, Ratings, Interplay, Search and choice
Discipline
Computer Sciences | E-Commerce | Sales and Merchandising
Research Areas
Information Systems and Management; Marketing
Citation
HU, Nan; KOH, Noi Sian; and REDDY, Srinivas K..
Ratings Lead You to the Product, Reviews Help you Clinch it? The Dynamics and Impact of Online Review Sentiments on Product Sales. (2009).
Available at: https://ink.library.smu.edu.sg/sis_research/643
Additional URL
http://dx.doi.org/10.1016/j.dss.2013.07.009
Comments
Published in Decision Support Systems, 2014, 57, 42-53. http://dx.doi.org/10.1016/j.dss.2013.07.009