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Explaining reputation inflation on Airbnb: The role of users’ perceived service quality

Explaining reputation inflation on Airbnb: The role of users’ perceived service quality

 
Jeroen Meijerink & Emma Schoenmakers,
University of Twente
Division: Business & Economics
 

Abstract

Online reviews by customers are of key importance in the platform economy. This particularly goes for sharing economy platforms such as Airbnb which rely on online customer reviews to ensure safe consumer-to-consumer interactions through which strangers share personal, underutilized goods such as their home or car (Frenken and Schor, 2017; Oskam and Boswijk, 2016). Available evidence however suggests that online customer reviews on Airbnb are heavily skewed towards positive ratings (Fradkin et al., 2018; Teubner and Glaser, 2018; Zervas et al., 2015). This implies that online reputations of Airbnb hosts may be overly inflated. The current study seeks to further uncover the possibility of online reputation inflation by explaining why Airbnb users do (not) leave online reviews. Namely, one of the explanations for online reputation inflation rests in the possibility that satisfied Airbnb users are more likely to leave online reviews in comparison to those who are dissatisfied (and therefore, are less likely to leave online reviews). In line with this, we examine whether customer perceptions of service quality is a relevant antecedent to why customers leave online reviews. By drawing on insights from conservation of resource theory and social exchange theory, we build and test the hypothesis that the relationship between service quality and online reviewing is linear and positive (i.e. satisfied users are more likely to leave online reviews than dissatisfied users).
To test our hypothesis, we rely on data coming from 177 customers of Airbnb from different continents/countries. Although we could not avoid relying on a convenience sample, our data show that 67% of the stays in an Airbnb accommodation result in an online review, meaning that 33% of the Airbnb stays are not reviewed by customer; this statistic is almost fully consistent with insights from secondary data provided by Airbnb (Fradkin et al., 2018). To reduce common method bias, we relied on two sources of data: (1) a survey that measured Airbnb users’ perceptions of service quality and (2) secondary data coming from their personal, online Airbnb accounts on whether they left an online review after their most recent Airbnb stay. We conducted a binary logistic regression analysis to test our hypothesis.
Our secondary data show that in our sample (and similar to available evidence), online reviews are heavily skewed towards positive ratings; none of the respondents left a 1-, 2-, or 3-star rating, 33% left a 4-star rating, and 66% left a 5-star rating. This skewed distribution towards positive reviews offers a first indication that satisfied customers are more likely to leave (positive) online reviews. Indeed, our regression analysis shows that customers’ service quality perceptions are positively and linearly related with online reviewing (β = .87; p < .001) when controlling for the confounding effect of other variables. The quadratic term of service quality is not significantly related with online reviewing. This shows that the relationship between perceived service quality and online reviewing is not U-shaped, but linear meaning that satisfied customers are more likely to leave online reviews than those who are dissatisfied (and vice versa).
Our study is original in three respects. First, it reconsiders the role of customer experiences in explaining online customer reviews. In so doing, it empirically shows that conventional thinking on a U-shaped relationship between customer experiences and online reviewing does not translate well to the platform economy context. Second, by relying on primary survey data, we reveal that reputation inflation in Airbnb can be attributed to dissatisfied customers who are less likely to leave online reviews than satisfied customers. Finally, whereas existing online review studies in the platform economy predominantly focused on Tripadvisor and Booking.com, we study Airbnb whose online review system differs and therefore, needs to be better understood.

References

Fradkin, A., Grewal, E., & Holtz, D. 2018. The determinants of online review informativeness: Evidence from field experiments on Airbnb, Technical report.
Frenken, K., & Schor, J. 2017. Putting the sharing economy into perspective. Environmental Innovation and Societal Transitions, Vol. 23 No., pp. 3-10.
Oskam, J., & Boswijk, A. 2016. Airbnb: the future of networked hospitality businesses. Journal of Tourism Futures, Vol. 2 No. 1, pp. 22-42.
Teubner, T., & Glaser, F. 2018. Up or out–the dynamics of star rating scores on Airbnb, Twenty-Sixth European Conference on Information Systems: 1-13. Portsmouth,UK.
Zervas, G., Proserpio, D., & Byers, J. 2015. A first look at online reputation on Airbnb, where every stay is above average.