The Service Industries Journal Vol. 28, No.

8, October 2008, 11511165

ISSN 0264-2069 print/1743-9507 online # 2008 Taylor & Francis DOI: 10.1080/02642060802188023 http://www.informaworld.com
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In this respect, the physical environment of a service situation is important because it can either enhance or suppress customers emotions, which may influence customer satisfaction and subsequent behaviors (Sayed, Farrag, & Belk, 2003; Wakefield & Blodgett, 1999). In service consumption situations, SERVICESCAPE, defined as the man-made, physical surroundings as opposed to the natural or social environment (Bitner, 1992), has been studied for more than a decade. SERVICESCAPE has been accepted as an important determinant of customer psychology (e.g. satisfaction and emotion) and behavior (e.g. patronage and positive word-of-mouth), when a service is consumed primarily for hedonic reasons and when customers spend moderate to long time in the service delivery setting (Wakefield & Blodgett, 1994). For instance, customers of upscale restaurants often spend 2 hours or more, sensing physical surroundings consciously and unconsciously before, during, and after their meal. While foods and services should be of acceptable quality, pleasing SERVICESCAPE (e.g. lighting, decor, and layout) may influence the degree of positive emotions and subsequent behavior (Donovan & Rossiter, 1982; Mehrabian & Russell, 1974). Although there is a substantial amount of research about the impact of the physical environment on human psychology and behavior, previous research has confined itself to one or a few particular physical environmental elements (e.g. music, color, and aroma). In other words, studies about the combined effect of physical environments have been scarce. In addition, researchers have paid limited attention to understanding how physical environments influence customers within the service industry context. Since physical environments are obviously one of influential factors toward a customers psychological states and behaviors in service industries, there is a need to understand how customers emotional states and behavior change depending upon their perception of environmental elements. Thus, this study intended to fill the research gaps by investigating the influences of customer perceptions of physical environment on their emotions and their intended behaviors in the service industry, especially in the upscale restaurant setting. The primary purpose of this study was to investigate how customers perceptions of dining environments influence customer emotions and behavioral intentions (BI) in the upscale restaurant context. To achieve this purpose, this study proposed a conceptual model by modifying the MehrabianRussells (1974) environmental psychology model. To assess how customers perceive dining environments, DINESCAPE, defined as man-made physical and human surroundings in the dining area of upscale restaurants (Ryu & Jang, 2008) was used in this study. Thus, the specific objectives of this paper were (1) to examine the construct validity of a modified MehrabianRussell (1974) model (MR model) in the upscale restaurant context, (2) to investigate the effects of customers perception on dining environments on emotional states (pleasure and arousal) and BI, and (3) to test the interdependence between pleasure and arousal in the modified MR model. MR model The MR (1974) model, which presented a role of physical environments, has received much attention in environmental psychology, retailing, and marketing. This model is divided into three parts: environmental stimuli, emotional states, and approach or avoidance responses. The environment creates an emotional response in individuals which, in turn, elicits either approach or avoidance behavior. The application of the model facilitates understanding the effects of environmental changes on emotions and human behavior. The model suggests that 1152 K. Ryu and S. Jang
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environment has an individual put at an emotional state that can be characterized as one of three: pleasure, arousal, and dominance, and these three emotional states mediate approachavoidance behaviors in a wide range of environments. Pleasure refers to the extent to which individuals feel good, happy, pleased, or joyful in a situation, while arousal denotes the degree to which individuals feel stimulated, excited, or active. Dominance dimension means the extent to which a person feels influential, in control, or important. However, empirical studies have reported that pleasure and arousal underlie affective responses to any environments while dominance did not have a significant effect on approach or avoidance behaviors (Russell & Pratt, 1980; Ward & Russell, 1981). Thus, dominance in relation to approach or avoidance behavior has not been given much attention in recent studies. Therefore, this study also used only two dimensions of emotional states: pleasure and arousal. It is noted that physical environment could be considered the same as the first component of the MR model: environmental stimuli. In addition, BI in this study is congruent with approachavoidance behavior, which is the third component of MR model. Therefore, the MR model, which incorporates the concepts of the physical environment, emotions, and approachavoidance behaviors, could be used as a theoretical framework for this study. Environmental psychologists (Donovan & Rossiter, 1982; Mehrabian & Russell, 1974) believe that peoples feelings and emotions ultimately influence what they do and how they do it. Further, people respond with different sets of emotions to different environments, and these emotions prompt them to approach or avoid the environment. Approach behaviors are positive responses (e.g. a desire to stay in a particular facility) whereas avoidance behaviors mean negative responses. As an example, pleasure could increase the time shoppers spend in stores as well as the amount of money they spend (Baker, Levy, & Grewal, 1992; Donovan & Rossiter, 1982; Donovan, Rossiter, & Nesdale, 1994). Therefore, two hypotheses are proposed here regarding the relationship between emotions and BI in the upscale restaurant setting.
H1: Pleasure will have a positive effect on BI. H2: Arousal will have a positive effect on BI.

Physical environment, emotions, and BI To measure customer perceptions about the physical environment, this study used the DINESCAPE scale (Ryu & Jang, 2008). DINESCAPE exclusively covers the internal dining environment of restaurants but does not deal with external environments (e.g. parking space and building design) or non-dining internal environments (e.g. restroom and waiting area). Six DINESCAPE constructs (facility aesthetics, lighting, ambience, layout, dining equipment, and employees) and the measurement items used in this study are presented in Table 1. As explained in the MR model, the physical environments of restaurants are expected to influence customers emotional states, and thus ultimately affect BI. Therefore, this section provides the explanation about six DINESCAPE elements and proposes hypotheses for the impacts of physical environments on emotions and BI. Facility aesthetics Facility aesthetics refer to architectural design, along with interior design and de cor, all of which contribute to the attractiveness of the dining environment (Wakefield & Blodgett, 1994). Once customers enter the dining area of an upscale restaurant, they often spend hours observing The Service Industries Journal 1153
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(consciously or subconsciously) the interior of the dining area, which is likely to affect their attitudes towards the restaurant (Baker, Berry, & Parasuraman, 1988). In addition to the appeal of the architectural design, customers may be influenced by the color schemes of the dining area. Different colors lead to different moods, emotions, and feelings, and subsequently influence BI (Bellizzi & Hite, 1992; Crowley, 1993; Gorn, Chattopadhyay, Yi, & Dahl, 1997; Mikellides, 1990). Other aspects of interior design, such as furniture, pictures/paintings, plants/flowers, or wall decorations may also serve to enhance the perceived quality of dining environments, creating

emotions (pleasure and arousal) in a customer and influencing BI. Thus, it is proposed that:
H3a: Facility aesthetics will have an effect on pleasure. H3b: Facility aesthetics will have an effect on arousal. H3c: Facility aesthetics will have an effect on BI.

Lighting Lighting can be one of the most salient physical stimuli in upscale restaurants. Restaurateurs may experientially learn that subdued, warm, and comfortable lighting symbolically conveys full service and relatively high prices, whereas bright lighting may symbolize quick service and lower prices. Research has shown the impact of lighting level preferences on individuals
Table 1. Measurement properties.

Factors (Cronbachs alphas) Standardized factor loadings Item reliabilities Composite reliabilities AVE 1. DC1: Facility aesthetics (0.87) 0.90 0.65 FA1/FA2/FA3/FA4/FA5 0.84/0.78/0.81/0.80/0.80 0.71/0.61/0.66/0.64/0.64 2. DC2: Lighting (0.91) 0.94 0.85 LI1/LI2/LI3 0.91/0.90/0.95 0.83/0.81/0.90 3. DC3: Ambience (0.89) 0.93 0.87 AM1/AM2 0.95/0.92 0.90/0.85 4. DC4: Layout (0.85) 0.89 0.73 LA1/LA2/LA3 0.86/0.92/0.76 0.74/0.85/0.58 5. DC5: Dining equipment (0.83) 0.87 0.69 SP1/SP2/SP3 0.83/0.86/0.80 0.69/0.74/0.64 6. DC6: Employees (0.80) 0.88 0.78 EM1/EM2 0.96/0.80 0.92/0.64 7. Pleasure (0.93) 0.96 0.85 PL1/PL2/PL3/PL4 0.91/0.95/0.95/0.89 0.83/0.90/0.90/0.79 8. Arousal (0.81) 0.85 0.66 AR 1/AR2/AR3 0.84/0.84/0.76 0.71/0.71/0.58 9. Behavioral intention (0.90) 0.92 0.75 BI1/BI 2/BI 3/BI 4 0.92/0.95/0.77/0.80 0.85/0.90/0.59/0.64 Note: FA1: Attractive paintings/pictures, FA2: Appealing Wall de cor, FA3: Beautiful plants/flowers, FA4: Warm colors, FA5: High-quality furniture, LI1: Warm lighting, LI2: Welcoming lighting, LI3: Comfortable lighting, AM1: Relaxing music, AM2: Pleasing music, LA1: Enough seat space, LA2: Crowded seating arrangement, LA3: Easy-to-move layout, DE1: High-quality tableware, DE2: Attractive linens, DE3: Attractive table setting, EM1: Attractive employees, EM2: Neat and well-dressed employees, PL1: Unhappyhappy, PL2: Annoyedpleased, PL3: Bored entertained, PL4: Disappointeddelighted, AR1: Depressedcheerful, AR2: Calmexcited, AR3: Indifferent surprised, AR 4: Sleepyawake, BI1: Patronage, BI2: Recommendation, BI3: Staying longer, BI4: Spending more. AVE Average variance extracted. 1154 K. Ryu and S. Jang
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emotional responses (Kumari & Venkatramaiah, 1974; Kurtich & Eakin, 1993). Kumari and Venkatramaiah (1974) reported that illumination is directly associated with the changes in physiological arousal. In addition, the type of lighting could influence an individuals perception of the quality of space, changing his/her awareness of physical, emotional, and psychological aspects of the space and accordingly altering BI (Kurtich & Eakin, 1993). Thus, it is proposed that:
H4a: Lighting will have an effect on pleasure. H4b: Lighting will have an effect on arousal. H4c: Lighting will have an effect on BI.

Ambience Ambience means intangible background characteristics that tend to affect the non-visual senses and may have a subconscious effect on customers. These background conditions usually include music, scent, and temperature (Baker, 1987). Previous research has shown that background music can (1) affect customer perceptions of stores (Mattila & Wirtz, 2001; North & Hargreaves,

1998); (2) increase sales (Mattila & Wirtz, 2001; North & Hargreaves, 1998); (3) influence purchase intentions (Baker et al., 1992; North & Hargreaves, 1998); (4) generate significantly enhanced affective response such as satisfaction and relaxation (Oakes, 2003); (5) increase shopping time and waiting time (Yalch & Spangenberg, 2000); (6) decrease perceived shopping time and waiting time (Baker & Cameron, 1996; Hui, Dube, & Chebat, 1997; Yalch & Spangenberg, 2000); and (7) influence dining speed (Milliman, 1986). In addition, the influence of pleasant scents as a powerful tool to increase sales has gained much attention in retail businesses (Bone & Ellen, 1999; Hirsch, 1995; Mattila & Wirtz, 2001). Ambient odors might also influence a consumers mood, emotion, or subjective feeling state (Bone & Ellen, 1999; Hirsch, 1995). Psychological research also suggests that certain temperatures are associated with negative emotions. For example, Bell and Baron (1977) argued that low temperatures (e.g. around 628F or lower) were associated with negative affective states. Thus, it is proposed that:
H5a: Ambience will have an effect on pleasure. H5b: Ambience will have an effect on arousal. H5c: Ambience will have an effect on BI.

Layout Layout means the way in which objects (e.g. machinery, equipment, and furnishings) are arranged within the environment. Just as the layout in discount stores facilitates the fulfillment of functional needs, a well-designed layout can also facilitate fulfillment of hedonic or pleasure needs (Wakefield & Blodgett, 1994). A layout may have a direct effect on customers quality perceptions, pleasure, and excitement levels, and indirectly on the desire to return (Wakefield & Blodgett, 1994). Service or retail facilities that are specifically designed to add some level of pleasure or excitement to the service experience, such as in upscale restaurants, should ensure that the layout plan is appropriate for their customers. Thus, the following hypotheses are proposed:
H6a: Layout will have an effect on pleasure. H6b: Layout will have an effect on arousal. H6c: Layout will have an effect on BI. The Service Industries Journal 1155
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Dining equipment Raajpoot (2002) found that the service product was one of the most important tangible qualities of restaurant services. The dining equipment dimension should be an especially important element in upscale restaurant design. Upscale restaurants should be designed to deliver a prestigious image to attract upper-class customers to their intended market. For example, highquality flatware, china, glassware, and linen can be good tools to influence customers quality perceptions. The way in which the table is decorated (for instance, with an attractive candle) can also make customers feel that they are in a prestigious or elegant environment. Even though this dimension has not been much examined in the academia probably because it is very unique and valid only to restaurants, dining equipment is presumed to influence diners emotional states and is eventually connected to BI. Thus, the hypotheses are proposed as follows:
H7a: Dining equipment will have an effect on pleasure. H7b: Dining equipment will have an effect on arousal. H7c: Dining equipment will have an effect on BI.

Employees Social elements refer to people (employees and customers) in the service setting (Baker, 1987). The social factors usually include employee appearance/number and the dress or physical appearance of other customers. However, since it is difficult to control physical appearance of other customers in the restaurant industry, only employee appearance as well as number was used to assess social elements, and they were labeled as employees. Baker et al. (1992) studied the effects of social cues (number/friendliness/appearance of employees) and reported that the more social cues present in the store environment, the higher the customers arousal. Tombs and McColl-Kennedy (2003) also argued that employees are related to the desired social density, which influences customer affective and cognitive responses as well as repurchase

intentions. Thus, the following hypotheses about employees are proposed:

H8a: Employees will have an effect on pleasure. H8b: Employees will have an effect on arousal. H8c: Employees will have an effect on BI.

Impact of arousal on pleasure The MR model posited that pleasure and arousal were the two orthogonal dimensions representing individual emotional or affective responses to a wide range of environments. However, more studies expressed their opposition to the independency of pleasure and arousal dimensions. For example, Donovan and Rossiter (1982) reported a positive relationship between pleasure and arousal dimensions. Donovan et al. (1994) also pointed out a possible failure to construct an unambiguous arousal factor, possibly because the pleasure and arousal factors are independent, yet correlated factors. Furthermore, some marketing studies claimed that arousal influences pleasure (Babin & Attaway, 2000; Chebat & Michon, 2003; Wakefield & Baker, 1998). Thus, the following hypothesis is proposed:
H9: Arousal will have an effect on pleasure. 1156 K. Ryu and S. Jang
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The mediating role of emotion The research framework of this study took a few steps toward a more complete picture of how perceived physical environments, emotions, and BI were related. Particularly, the mediating role of emotions between physical environments and BI was also investigated in this study. Some previous studies suggest a direct link between physical environments and outcomes such as customer satisfaction and BI (Chang, 2000; Chebat & Michon, 2003). For example, customers who are strongly motivated by the ambience dimension are more likely to be satisfied, to repatronize the restaurant, and to engage in positive behaviors such as talking positively about their experience. However, a few previous studies have demonstrated that the path fromperceived physical environment to future intentions was not significant in the environmental psychology model (Chang, 2000). There exits no consistency in the mediating role of emotion. Thus, it was worthy of re-testing emotion as a mediator between physical environments on behavioral responses. Therefore, modifying the MR model, the following conceptual model regarding the relationships among latent variables was proposed as presented in Figure 1. The dotted lines in Figure 1 signify modified paths from the original MR model. Methodology Measurement The questionnaire designed for this study was divided into three parts: customers perception of dining environments, emotional states, and BIs. First, to assess how customers perceived the
Figure 1. Proposed relationships between latent variables. Note: Solid lines, links and constructs in the original modified MehrabianRussell model; dotted lines, added links and construct to the original MehrabianRussell model.

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quality of dining environments, respondents were asked to rate each DINESCAPE item using a 7-point Likert scale (1 strongly disagree, 7 strongly agree). The questionnaire included a list of 21 measurement items for six dimensions (facility aesthetics, lighting, ambience, layout, dining equipment, and employees) of the DINESCAPE scale as presented in Table 1. Secondly, emotional states were measured using eight items representing pleasure and arousal dimensions suggested by Mehrabian and Russell (1974). The original Mehrabian and Russell items were slightly adapted to fit the upscale restaurant setting. Subjects evaluated their emotional responses to the physical environment of the upscale restaurant. All items were rated on semantic differentials (scale: 23_3), in which an emotion and its opposite constituted the two ends of the scale. The scale of pleasure consisted of four bipolar measures: unhappyhappy (PL1); annoyedpleased (PL2); boredentertained (PL3); disappointed delighted (PL4). The measure of arousal comprised the following four items: depressed

cheerful (AR1); calmexcited (AR2); indifferentsurprised (AR3); sleepyawake (AR4). Thirdly, to measure BI, Mehrabian and Russells (1974) four aspects of approachavoidance behaviors and the scale suggested by Zeithaml, Berry, and Parasuraman (1996) were adapted to fit the upscale restaurant situation. Subjects were asked to react to the following four statements: I would like to come back to this restaurant in the future (BI1), I would recommend this restaurant to my friends (BI2), I am willing to stay longer than I planned at this restaurant (BI3), and I am willing to spend more than I planned at this restaurant (BI4). Participants responded to these items using a 7-point Likert scale (1 equals; strongly disagree, 7 strongly agree). Data and analysis The data were collected from customers at upscale restaurants in which average guest checks were more than $20 and which offered full table service and high-quality ambience. Using a convenience-sampling approach, 319 responses were collected at three upscale restaurants in Midwest and Northwest states. Customers were asked to participate in the study, and those who agreed were given a survey questionnaire as they were finishing the end of their main entree. After deleting incomplete questionnaires, 253 were finally used for data analysis. As suggested by Anderson and Gerbing (1988), data were analyzed using the two-step approach in which the measurement model was first confirmed and then the structural model was tested. Structural equation modeling (SEM) with latent variables via LISREL 8.54 was tested to determine the adequacy of the MR model by representing the constructs of the model and testing the hypotheses. Results Measurement model A series of confirmatory factor analysis (CFA) using maximum likelihood estimation on the covariance matrix were conducted to test the factor structure of the measurement model (Anderson & Gerbing, 1988). The primary objective of CFA was to assess the convergent and discriminant validities of the construct measures. Based on the results of the first CFA, three items were deleted due to their low squared multiple correlations. Once these items 1158 K. Ryu and S. Jang
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were deleted, CFA was conducted again. Table 1 presents the Cronbachs alphas and factor loadings of the observed items on the latent constructs as estimated by the CFA. Cronbachs alphas of latent constructs were satisfactory for all seven constructs (0.800.93), indicating acceptable internal consistency (Nunnally, 1978). The item reliabilities ranged from 0.58 to 0.92, indicating an acceptable level of reliability (Hair, Anderson, Tatham, & Black, 1998). The composite reliabilities of constructs ranged from 0.85 to 0.96. These values indicated adequate internal consistency of multiple indicators for each construct in the model since they exceeded 0.70 (Hair et al., 1998). Convergent validity was indicated because factor loadings on their underlying constructs were significant at 0.05 (Anderson & Gerbing, 1988). All latent variables also met the criteria for discriminant validity since average variance extracted (AVE) for each construct was greater than the variance explained between the associated constructs (r2) (Fornell & Larcker, 1981). In sum, the assessment of the measurement model showed good evidence of reliability and validity for the operationalization of the latent variables. Table 2 presents the intercorrelations among the latent variables. All the correlations between constructs were in the expected direction and all were significant (a 0.05). The correlations indicated that pleasure (0.64) played a more important role than did arousal (0.44) in determining BIs. Pleasure was most highly correlated with ambience (0.66), followed by facility aesthetic (0.52), layout (0.52), and employees (0.52). Similarly, arousal was also most highly associated with ambience (0.56), followed by employees (0.49), facility aesthetic (0.48), and layout (0.45). Finally, it was worth noting that the two independent constructs (pleasure and arousal) were somewhat highly correlated (r 0.44). The significant positive correlation suggested a possibility that pleasure and arousal might be causally related as argued by some

researchers (Babin & Attaway, 2000; Chebat & Michon, 2003; Donovan et al., 1994). The overall model fit was evaluated by the chi-square test and other goodness-of-fit statistics. The chi-square test of measurement model was significant (x 2 (339) 966.54, p 0), which indicated that the model did not fit the data. However, since the chi-square statistic is very sensitive to a large sample size, researchers typically tend to discount the chi-square test and resort to other indices for evaluating the model fit (Bearden, Sharma, & Teel, 1982). Other widely used goodness-of-fit indices consistently showed that the measurement model fit the data well [x2/df 2.85; comparative fit index (CFI) 0.97; TuckerLewis index (TLI) 0.96; root mean square error of approximation (RMSEA) 0.07].
Table 2. Correlations among the latent constructs.

Construct 1 2 3 4 5 6 7 8 9 1 Facility aesthetics 1 2 Lighting 0.68 1 3 Ambience 0.57 0.63 1 4 Layout 0.51 0.48 0.63 1 5 Dining equipment 0.58 0.52 0.50 0.56 1 6 Employees 0.45 0.35 0.58 0.54 0.62 1 7 Pleasure 0.52 0.48 0.66 0.52 0.41 0.52 1 8 Arousal 0.48 0.46 0.56 0.45 0.39 0.49 0.44 1 9 Behavioral intention 0.38 0.35 0.48 0.38 0.30 0.39 0.64 0.44 1 Note: All correlations are significant at p 0.05. The Service Industries Journal 1159
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Structural model After confirming the measurement model, the structural model was then examined. Anderson and Gerbing (1988) suggest using two criteria to evaluate the causal model: fit indices and path significance. The results of the standardized parameter estimates and t-values are reported in the upper part of Table 3, and those of the model-fit estimates of the structural model are shown in the lower part of Table 3. For the overall model, based on model-fit indices (x2/df 2.85; RMSEA 0.075; TLI 0.96; CFI 0.97), the estimated model provided a good fit to the data. Customer perceptions of dining environments explained 69% of variance in pleasure and 35% of variance in arousal. The overall variance explained in BI was 56%, indicating the model of this study could well predict and explain customer BI. Figure 2 shows the direction and magnitude of the paths of the structural diagram. Solid lines of the Figure 2 indicate statistically significant paths and dotted lines show non-significant paths. As presented in Table 3 and Figure 2, pleasure was statistically significant predictors of customers BI in upscale restaurants. The results showed that pleasure influenced BI in a positive way (b 0.46; t 3.54), supporting H1. However, the coefficient for the effect of arousal on BI (b 0.08; t 0.56) was not significant, not supporting H2.
Table 3. Structural parameter estimates.

Hypothesized path Standardized path coefficients t-value Hypothesis H1: Pleasure!BI 0.46 3.54__ Supported H2: Arousal!BI 0.08 0.56 Not supported H3a: Facility aesthetic!Pleasure 0.22 3.47__ Supported H4a: Lighting!Pleasure 20.10 21.35 Not supported H5a: Ambience!Pleasure 0.36 5.41__ Supported H6a: Layout!pleasure 0.15 2.51_ Supported H7a: Dining equipment!Pleasure 20.08 21.07 Not supported H8a: Employees!pleasure 0.02 0.41 Not supported H3b: Facility aesthetic!Arousal 0.15 2.19_ Supported H4b: Lighting!Arousal 0.13 1.58 Not supported H5b: Ambience!Arousal 0.11 1.53 Not supported H6b: Layout!arousal 0.04 0.65 Not supported H7b: Dining equipment!arousal 20.04 20.50 Not supported H8b: Employees!Arousal 0.15 3.02__ Supported H3c: Facility aesthetic! BI 0.36 3.33__ Supported H4c: Lighting! BI 20.11 20.86 Not supported

H5c: Ambience! BI 0.04 0.36 Not supported H6c: Layout! BI 0.15 1.56 Not supported H7c: Dining equipment!BI 20.13 21.07 Not supported H8c: Employees!BI 0.32 4.15__ Supported H9: Arousal! Pleasure 0.60 7.57__ Supported R2 (Pleasure) 0.69 R2 (Arousal) 0.35 R2 (Behavioral intention) 0.56 Goodness-of-fit statistics: x 2 (340) 969.59, (p 0); x2/df 2.85; RMSEA 0.075; TLI 0.96; CFI 0.97 Note: _ p , 0.05, __p , 0.01; BI behavioral intention; RMSEA root mean square error of approximation; TLI TuckerLewis Index; CFI comparative fit index. 1160 K. Ryu and S. Jang
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The results also revealed causal relationships between customers perceptions of physical environments and emotional states. The estimate of the standardized path coefficient indicated that the linkage between facility aesthetics and pleasure was significant (b 0.22; t 3.47), which supported H3a. Moreover, the linkage between facility aesthetics and arousal was significant (b 0.15; t 2.19). Therefore, H3b was also supported. The paths from lighting to pleasure (b 20.10; t 21.35) and to arousal (b 0.13; t 1.58) were not significant, so both H4a and H4b were not supported. The parameter estimates for the path from ambience to pleasure (b 0.36; t 5.41) was significant, but path from ambience to arousal (b 0.11; t 1.53) was not significant, which supported H5a but not H5b. The estimate
Figure 2. Causal relationships between latent variables.

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from ambience to pleasure showed the greatest standardized parameter estimate among all the paths connecting physical environments to pleasure. This indicates that ambience is the most influential factor towards customers pleasure. This finding provides restaurateurs with practical information on how important ambience is in creating pleasant environment. The path from layout to pleasure (b 0.15; t 2.51) was found to be significant, which supported H6a. However, the path from layout to arousal (b 0.04; t 0.65) was not significant, so H6b was rejected. The results also indicated that neither H7a (dining equipment to pleasure: b 20.08; t 21.07) nor H7b (dining equipment to arousal: b 20.04; t 20.50) was supported. The path from employees to pleasure (b 0.02; t 0.41) was not significant, but the path from employees to arousal (b 0.15; t 3.02) was significant. Thus, only H8b was supported. This finding suggested that employees are another critical component in upscale restaurants in order to create arousal emotion. In short, as the perceived quality of the facility aesthetics, ambience, and layout, the level of customers pleasure emotion becomes stronger, whereas facility aesthetics and employees enhance arousal emotion in restaurant customers. As the result of the relative contribution of each construct of physical environment to emotional states, ambience (b 0.36) emerged as the primary explanatory variable for pleasure, followed by facility aesthetic (b 0.22) and layout (b 0.15). However, facility aesthetics (b 0.15) and employees (b 0.15) were the major explanatory variable for arousal. Interestingly, layout was a significant predictor only for pleasure, not for arousal. In addition, employees were a significant predictor only for arousal, not for pleasure. The other two causal pathslighting and dining equipmentwere found to be not significant, which indicated these aspects did not critically influence the changes in customer emotional states. Regarding the relative importance of pleasure and arousal to BI, the higher positive coefficient for the causal path from pleasure to BI (b 0.46) was observed than that for the path from arousal to BI (b 0.08). That is, pleasure was the more influential emotion that could improve customers BI than arousal, which was consistent with previous studies (Chebat & Michon, 2003; Donovan & Rossiter, 1982).

Because pleasure appeared to be a major contributor to BI in upscale restaurants, it is important for restaurant operators to generate pleasure-generating environment by enhancing perceived quality of facility aesthetics, ambience, and layout. Table 3 and Figure 2 also showed the hypothesized relationship between physical environments and BI in the modified MR model. The path between facility aesthetic and BI was significant (b 0.36; t 3.33), and the path between employees and BI was also significant (b 0.32; t 4.15). Therefore, H3c and H8c were supported. However, all the other hypothesized relationships between physical environments and BI were not supported. Interestingly, facility aesthetics also indirectly influenced BI through pleasure. That is, facility aesthetics had both direct and indirect effect on BI. While the direct effect of arousal on BI was not significant (b 0.08; t 0.56), the direct effect of arousal on pleasure (b 0.60; t 7.57) and the direct effect of pleasure on BI (b 0.46; t 3.54) were significant. Thus, the indirect effect of arousal on BI through pleasure was significant at an alpha level of 0.01. That is, the arousal only indirectly influenced BI through pleasure. In addition, the significant result of the arousal-to-pleasure obviously implies the interdependence of the two emotional constructs. The use of interdependence between arousal and pleasure as well as the mediating role of emotion allows a better understanding of the relationships among arousal, pleasure, and BI. 1162 K. Ryu and S. Jang
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Conclusion This study intended to discover the impact of customer perceptions of physical environments on pleasure and arousal emotions in addition to BI. Modifying the MR model, this study proposed a theoretical model and tested it in an upscale restaurant setting. The findings indicated which environmental elements produced pleasure and arousal, so that restaurateurs could use the findings as a guide in planning pleasant and arousing environments. Certain attributes were more important than others in enhancing customers perception of physical environment, their emotions, and BI, so the results have implications for determining how management efficiently allocates business resources. First, this study showed that a dimension among the dining environmental features directly influencing both pleasure and arousal emotions was facility aesthetics. Particularly, facility aesthetics (paintings/pictures, plants/flowers, furniture, color, and wall de cor) are likely to differentiate a restaurant from its competitors. Major renovation or replacement of the architectural design could be one good option to have better facility aesthetics, but restaurateurs should not overlook less expensive options such as changing paintings/pictures and plants/flowers. One of the most significant factors affecting customers emotion (pleasure) was ambience. It is important to recognize that the physical elements of ambience such as music, aroma, and temperature can be controlled to a large extent by management, and it is probably among one of the least expensive means to enhance customer perceptions of physical surroundings. For instance, music can be a more highly controllable physical element than other physical elements without much cost. Restaurateurs can easily change background music, varying its volume, genre, and tempo based on the customer preferences to help them feel pleased, excited, or relaxed. Thus, restaurateurs should seriously consider physical attributes related to ambience as an operational tool. Another major physical feature directly affecting customers emotions (arousal) was employees. In the eyes of the customer, the employees could be an important dimension of an upscale restaurants image. Employees of restaurants have this important role until the service delivery process is completed. The results of this study supported the strong influence of employees on customers arousal state, so service organizations planning to enhance customer arousal need to consider the employees style when hiring them. The style can be expressed in two ways: professional appearance and attractiveness. The style of the employees should be congruent with the restaurant image to maximize the effect of the social elements upon customer perceptions. Finally, layout influenced the degree of pleasure. Thus, restaurateurs should provide physically and psychologically

ample space to facilitate pleasurable experience in the dining area. The overall results reinforced the importance of understanding the impact of emotions on customers behavior intentions. The findings revealed that not only pleasure derived from dining environment directly influenced BI, but arousal also affected BI through a mediator, pleasure. Some restaurateurs might overlook emotional impact when cognitive elements (e.g. quality of food, food variety, price, and location) are emphasized. The findings indicated that the emotional responses evoked by the dining environments determined the extent to which customers intended to come back, to recommend the restaurant to friends or others, to stay longer than anticipated, and to spend more than originally planned. Thus, restaurateurs should understand how important the physical environments are in generating positive emotions such as pleasure in restaurants. The results also suggest implications for researchers. Many researchers in the The Service Industries Journal 1163
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service field have paid attention to service evaluation, examining satisfaction or service quality without taking customer emotions into account. Future studies should be directed toward incorporating key emotions into designing and managing service processes. Non-significant relationships between some physical environmental constructs (e.g. lighting, dining equipment) and emotions or BI were also found in the study. The non-significant paths could be attributed to the expectation of customers towards upscale restaurants and prior experience. Customers may consider the high quality of physical surroundings in upscale restaurants to be natural through their past experience. Thus, the high qualities of some physical attributes might not excite their emotions or drive BI. This study has some limitations. The data were collected using convenience-sampling method in three upscale restaurants located in Midwestern and Northwestern states in the US. Thus, the limitation in generalizability of the results is not deniable. Nevertheless, this study uniquely contributes to the literature by modeling customers perception of the dining environment, emotional states, and BIs, based upon the proposed modified version of the MR model. There are some suggestions for future research. Given the great diversity of service industries, more research is needed to examine the effects of physical surroundings across various service industries. Demographic differences (gender and age) could be also pursued in future research because customers reaction to physical environment may be different depending upon their demographic characteristics. Lastly but not least, it is also worth doing longitudinal study for a specific restaurant. Researchers can watch how customers perceptions of quality of physical environment changes over time (e.g. opening time and one or 2 years later) and how those perceptions can influence customer responses, such as customer emotions, restaurant image, customer satisfaction, and subsequently their approachavoidance behaviors. References
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