Only a handful or restaurants in the world rate three Michelin stars. But more than 40 percent of all Yelp reviews are perfect scores, suggesting that five stars on Yelp entails satisfaction rather than perfection. Average hundreds of reviews of the same establishment, and you’ll find that its overall rating is influenced far more by the number of dissatisfied customers than by how much the five-star reviewers loved it. The best-rated restaurants on Yelp, then, are not so much the most loved as the least hated.
No wonder Yelp’s top 100 restaurants tend to be down-home joints specializing in distinctive cuisines like poke, barbecue, tacos, and hot dogs. Customers know exactly what they’re looking for when they go there, reducing the chances that they’ll order something unfamiliar and end up disliking it. They also know not to expect the world when they pull over at outside a roadside stand on the highway home from Lake Tahoe, or a condominium complex in Hawaii.
Oremus also notes the impact of exogenous factors like weather, neighborhood demographics, and time of year in customer ratings.
Makes sense to me. Of restaurants I love, the only ones that get 5-star average ratings on Yelp are the low-priced, comfort-food types. Most of the higher end eateries I favor have 3.5 to 4 star ratings on Yelp. Trust your gut.
The same applies for books on Amazon. Almost none of my favorite books have an average review of 5-stars on Amazon, and in fact I look on books that have such a high average rating with suspicion. Unlike restaurants, which attract many random samplers, many books are only read and reviewed by true believers, and that selection bias can be death on the signal quality of the average rating.