Binary Binning: Examining the Mapping Between Continuous and Binary Review Scales

Abstract

Products and services are commonly rated on either a 5-point scale or a binary scale. Using a pilot experiment, two between-subjects experiments, and a survey, this paper investigates how individuals evaluate products differently depending on the scale used, how they categorize ratings on a 5-point scale into binary bins, and how they estimate 5-point distributions from binary scales. Individuals perceive products as higher in quality when ratings are presented on a binary scale if reviews have been assigned to positive or negative categories based on whether they are above or below the midpoint of a 5-point scale. Individuals perceive products as being of equivalent quality across scales only when ratings of four and five are taken as positive, and the remainder as negative. However, when individuals are asked to generate a 5-point distribution from binary ratings, they do not account for this skew unless the 5-point scale is explicitly labeled so that the “neutral” point of the scale is defined as four rather than three. These findings extend the literature that aims to understand how people evaluate products given different forms of ratings information.