Academic study reveals identity attributes on review platforms bolster engagement

A new study co-authored by Michael Luca of Harvard Business School*; Abhay Aneja of University of California, Berkeley and Oren Reshef of Washington University in St. Louis finds that platforms like Yelp can increase demand for Black-owned businesses by making them easy for consumers to find. The study found Yelp’s Black-owned business feature led to more business for Black business owners, increasing customer engagement, reviews and ultimately, foot traffic.

The study looked at Yelp data covering a two year period from April 2019 – August 2021, focused on seven major metropolitans: San Francisco, Los Angeles, New York, Minneapolis, Atlanta, Chicago and Houston. Researchers looked at businesses that have self-identified as Black-owned via Yelp’s attribute as well as businesses with a large quantity of reviews identifying the restaurant as Black-owned.  

Key findings from the study include:

• On average businesses that self-identified as Black-owned via Yelp’s attribute, or were identified as Black-owned in review mentions, saw an increase in customer engagement and increase in reviews. 
• Restaurants that have the Black-owned business attribute also saw an increase in the number of weekly visits to their establishments by about 10%, signaling increased consumer interest or demand.
• Indicators of economic success were also identified with Black-owned businesses seeing an increase in both total restaurant orders and revenue, following the addition of the attribute. 

The authors also look at how the effect varies in different areas, using data psychologists have collected on how racial attitudes vary by location. While the effect was positive across the board, the researchers found the effect was especially large in areas with the lowest levels of racial bias. This paper is also part of an emerging body of research that is leveraging new data to explore the ways in which variation in racial attitudes manifests in market settings. Learn more about the implicit bias test from Project Implicit.

Yelp launched its Black-owned business attribute in June 2020 and saw a 6,590%** increase in searches for Black-owned businesses during the summer of 2020. Consumer interest in Black-owned businesses has remained above 2019 levels, signaling that our users are committed to supporting the Black community.  We’ve since partnered with 15% Pledge to support Black-owned businesses and committed to highlighting Black-owned businesses throughout the year, including our annual Ones to Watch list. We’ve launched an annual Black in Business Summit to provide free resources for Black business owners and allies. At Yelp, we remain committed to using our platform to raise awareness, promote economic opportunity for those in need and support organizations that serve and nourish our local communities. 

If you are a Black business owner and are interested in appearing in search results for ‘Black-owned’ businesses, visit Yelp’s resource hub for instructions on how to add the attribute to your Yelp Page. This new study from Harvard Business School shows that consumers are eager to connect and support Black-owned businesses and can help increase revenue for these businesses. 

*Michael Luca has previously performed consulting work for Yelp but Yelp did not commission or participate in this study.

**From 6/18/2020 to 8/23/2020, Yelp saw a 6,520% increase in search frequency for Black-owned businesses (and related terms) vs over the same days in 2019.