When Local Praise Becomes Cheap Talk - Analyzing the Relationship between Reviewer Location and Usefulness of Online Reviews

With a growing number of online reviews, it becomes increasingly important for customers and online review platforms to find groups of reviewers who write useful reviews. Customers who review local offline businesses such as restaurants can identify themselves as locals or travelers and thus implicitly assign themselves to a specific reviewer group. This study investigates the relationship between identifying as a local and the perceived usefulness of their online reviews. Using data from Yelp.com, we empirically test hypotheses derived from attribution theory. Our results suggest that neutral and negative reviews by locals tend to be perceived as more useful than reviews by travelers. Positive reviews by locals, however, are not perceived as more useful. These findings provide significant practical implications for online review platforms and local offline businesses.