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Superstar Effects in Deluxe Gastronomy – An Empirical Analysis of Value Creation in German Quality Restaurants

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  • Thomas Ehrmann
  • Brinja Meiseberg
  • Christian Ritz

Abstract

We analyze whether superstar effects (disproportionate income effects) exist in the deep‐pocket market for quality gastronomy in Germany, and what factors determine the stars' rents. In quality gastronomy, the stars can be the restaurant chefs. Building on Rosen's (1981) and Adler's (1985) central theories on star effects, we explore two potential sources of stardom. Following Rosen (1981), we test if quality differences between the chefs' performances have a direct effect on financial rewards (“direct superstar effect”). Following Adler (1985), we assess the income effect of a media presence of chefs (“classical Superstar effect”). Through this, we deal with an economic issue of general interest: does it pay more to develop your skills in your core business to perfection, or to maintain the current level of skills and invest in self‐marketing? Analyzing a sample of 288 restaurants, for potential star effects by differences in quality, we find that higher quality increases chefs' revenues. Yet, revenues do not increase disproportionately, and achieving higher quality requires substantial investments in exquisite ingredients, excellent staff and prime ambience. This problem, also called the “agony of the stars”, has manifested itself in the bankruptcies of European three‐star restaurants in recent years. As regards potential star effects by differences in media presence, we observe a positive impact of TV appearances on financial rewards. Yet, these income effects are moderate as well, so there is neither a direct, nor a classical superstar effect in quality gastronomy. We argue that although both perfection of skills and self‐marketing have similarly positive income effects, self‐marketing seems both the less risky and the less stressful way to enhance income.

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  • Thomas Ehrmann & Brinja Meiseberg & Christian Ritz, 2009. "Superstar Effects in Deluxe Gastronomy – An Empirical Analysis of Value Creation in German Quality Restaurants," Kyklos, Wiley Blackwell, vol. 62(4), pages 526-541, November.
  • Handle: RePEc:bla:kyklos:v:62:y:2009:i:4:p:526-541
    DOI: 10.1111/j.1467-6435.2009.00449.x
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    Cited by:

    1. Brinja Meiseberg, 2014. "Trust the artist versus trust the tale: performance implications of talent and self-marketing in folk music," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(1), pages 9-42, February.
    2. Francesco Angelini & Massimiliano Castellani, 2019. "Cultural and economic value: a critical review," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(2), pages 173-188, June.
    3. Olivier Gergaud & Vincenzo Verardi, 2021. "Untalented but successful? Rosen and Adler superstar Pokemons," Empirical Economics, Springer, vol. 60(5), pages 2637-2655, May.
    4. Ulpiano J. Vázquez-Martinez & Carlos Sanchís-Pedregosa & Antonio L. Leal-Rodríguez, 2019. "Is Gastronomy A Relevant Factor for Sustainable Tourism? An Empirical Analysis of Spain Country Brand," Sustainability, MDPI, vol. 11(9), pages 1-13, May.
    5. Alex Bryson & Giambattista Rossi & Rob Simmons, 2014. "The Migrant Wage Premium in Professional Football: A Superstar Effect?," Kyklos, Wiley Blackwell, vol. 67(1), pages 12-28, February.
    6. Dakshina De Silva & Caroline Elliott & Robert Simmons, 2013. "Restaurant wars," Working Papers 44312700, Lancaster University Management School, Economics Department.
    7. Eiji Yamamura & Fabio Sabatini, 2014. "Superstars in politics: the role of the media in the rise and success of Junichiro Koizumi," Papers 1407.1726, arXiv.org.
    8. Kotrba, Vojtěch, 2019. "Direct preferences of sports fans: Is there a superstar effect in the fantasy league?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 78(C), pages 89-97.
    9. Aloys Prinz & Jan Piening & Thomas Ehrmann, 2015. "The success of art galleries: a dynamic model with competition and information effects," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 39(2), pages 153-176, May.

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