CAST Research Seminar: Veronica Leoni (University of Balearic Islands, Spain)

Title:"Noisy Signals: Do Ratings’ Volatility Depend on the Length of the Consumption Span?"

  • Data: 01 dicembre 2023 dalle 15:00 alle 16:00

  • Luogo: Room Alberti 2, Rimini Campus


This paper investigates the informational content of online reviews. Whilst most studies look at the drivers of average rating scores, we investigate the factors that explain the variance of individual ratings for the same goods. We specifically focus on how the length of the stay at a hotel, as a measure of the consumption span, shapes the variance of rating scores. We conduct an empirical analysis using almost 522,000 individual reviews for hotels from, in five major European cities. The results indicate that individual ratings volatility decreases with the stay duration, implying that online ratings from short stayers (short consumption episodes) are noisy signals of the underlying hotel quality. We also show that greater volatility in ratings translates into a lower usefulness for subsequent consumers. Our findings offer relevant insights for platform design operators about the sources of ratings’ volatility and how this affects social learning.

Authors: Veronica Leoni, David Boto Garcia