Determinants of a restaurant average meal price: An application of the hedonic pricing model

Eun Soon Yim, Suna Lee, Woo Gon Kim

Research output: Journal article publicationJournal articleAcademic researchpeer-review

46 Citations (Scopus)

Abstract

This study applies the hedonic pricing model to examine important attributes influencing average customer meal prices in restaurants in Seoul, Korea. Data from 185 restaurants were collected via Internet, phone interviews, site inspections, and ZAGAT Survey, and analyzed using OLS regression. The log-linear model was found to be most suitable for the data, and the proposed hedonic model accounted for as much as 73.7% of the variation in meal prices. The results indicate that food quality and décor were important determinants of restaurants' average meal prices while service was not. Furthermore, the study found that a restaurant's location within the building (1st floor), the types of cuisine served (Japanese and Italian), parking facilities, private dining settings, franchising, and the number of blogger reviews (e-WOM) have significant effects on restaurants' average meal prices. The model will provide useful information for restaurateurs in deciding effective menu pricing strategies.
Original languageEnglish
Pages (from-to)11-20
Number of pages10
JournalInternational Journal of Hospitality Management
Volume39
DOIs
Publication statusPublished - 1 May 2014
Externally publishedYes

Keywords

  • Electronic word-of-mouth (e-WOM)
  • Hedonic pricing model
  • Restaurant meal price
  • Zagat survey

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

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