Binary binning: examining the mapping between continuous and binary review scales

Products and services are usually rated on either a five-point scale or a binary scale (i.e. positive vs negative). Using a pilot study and two between-subjects experiments, this paper investigates how individuals evaluate products differently depending on the scale used, how they implicitly categorise ratings on a five-point scale into binary bins, and how they estimate five-point distributions from binary scales. Individuals perceive products as higher in quality when ratings are presented on a binary scale, assuming reviews have been assigned to positive or negative categories based on whether they are above or below the midpoint of a five-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 five-point ratings distribution from binary ratings, they do not account for this skewed perception of positivity unless the five-point scale is labelled so that the ‘neutral’ point of the scale is defined as four rather than three. These findings have theoretical implications for understanding how people implicitly categorise and bin ratings, as well as practical implications for industry and policymakers.