The Michelin Guide and Restaurant Pricing Strategies

This study reports the analysis of the price changes that occurred among randomly chosen French restaurants during the period of 1970–94. It discussed the relationship between these changes and the Michelin Guide restaurant ratings. The findings suggest that when the Michelin ratings increase or decrease for a particular restaurant, its prices reflect this change. Even two years before receiving a Michelin promotion, restaurants are observed to increase their prices relative to other restaurants. Most likely this is due to their incurring the extra expense of raising the quality of their fare and improving their amenities in the hope of qualifying for an increased Michelin rating.