Examining the Relationship between Online Review Sentiment and Sales

This paper studied 1942 products from Amazon.com to examine how online review sentiment affects sales. The findings show that controlling for the volume of online reviews, the online review sentiment does affect sales. Additionally, product price serves as a moderator for this impact; however, product type doesn’t. That is, regardless of product type, the high proportion of negative reviews would significantly undermine the sales of priced products, but not the sales of free products. Also, this negative effect of negative online review sentiment is mitigated or even negated for hedonic and free products when they have many reviews. All the findings imply that people are sometimes skeptical of negative reviews and this skeptical attitude is contingent on free versus priced products