Stardust over Paris Gastronomic Restaurants
Olivier Gergaud, Linett Montano Guzman and Vincenzo Verardi
Journal of Wine Economics, Vol. 2, No. 1, 24-39
Abstract
In this paper, we study if the leading French gastronomic guidebook, the “Guide Rouge Michelin,” only rates the quality of food, as it claims, or if it also considers environmental variables when attributing stars. We then check how Michelin ratings affect the market, and more specifically, the price charged by restaurants. Using some simple econometric techniques, we find that a small improvement in environment boosts the probability of receiving Michelin stars. Since we also find that a Michelin star is associated to a high price premium stuck (independently of the quality of food), we conclude that expertise induces distortions in the market.