Don't be so quick to answer.
When this question is asked, the answer is almost always negative.
"I would never pay for a book review."
That's a very common answer among authors, and I commend you for your sense of morality. But the issue isn't so clear cut.
When a paid review is bad
The only time that I would consider hiring someone to write nice things about a book would strictly be for promotional purposes. The words would never masquerade themselves as a review. If the words are meant to fool a reader into thinking that the person read the book and is giving their honest opinion, then I believe you have crossed the proverbial ethical line.
This side of the line?
Newspapers pay staff to write reviews. Magazines do the same thing. Most people don't consider these unethical because honesty is expected.
Some say that these aren't unethical since the author isn't the one paying for the review—the publisher is.
What the @#$% does that have to do with anything?
Money is being exchanged. Doesn't matter where it originates. If the publisher is paying for the slot (and don't you dare tell me they aren't), then the author is indirectly paying. The author gets paid more because of the promotion of the book review column.
If money is the only thing to make these situations unethical, then I think your sense of ethics is unbalanced. You are no longer answering the question of it being right or wrong. And since many traditional book reviews come about because of some money-exchanging scenario, I think you are missing the point.
The ultimate ethics question
Is the book review an honest opinion?
What faulty logic!
Some say that if a blogger were to charge for "honest" reviews, they would be obliged to write positive reviews. If they didn't, authors wouldn't continue to use them.
If said blogger has clout (or klout), then I think the presence of money wouldn't make a difference. Many bloggers are known for their critical reviews, and yet their waiting list is always full. If the blogger charged for their time but were still known for their critical reviews.... I don't see the negative in this.
In fact, turning a book review hobby into a business could mean more books are read.
After all, there aren't enough reviewers out there, especially as the number of authors continue to climb. If the industry openly accepted professional book reviewers, then I think there would be more book reviewers ... period ... because those reviewers wouldn't necessarily have to work at a normal job—their bills would be paid for by their book review business.
If I were in that situation where my livelihood depended on my professional reputation, I would make extra effort to protect it by NOT doing things that would stop the cash flow. Such as writing too many positive reviews. If a professional book reviewer became known as unprofessional or unscrupulous, then said book reviewer is no longer in business.
But there are book reviewers right now who get paid for "positive" reviews, you may say. True, but in my experience, you only find them in the dark corners of the internet. They can't really do things publicly because the public would pounce on them. If a reviewer's business was open and public, I don't think they would get away with unethical actions, not for very long anyway.
I would love to operate a paid review service, but I'm hesitant to do so because of the reputation issue. That's part of what this post is about. I think it would be completely ethical to do so ... provided certain principles were clearly followed (and made completely public).
Are all paid reviews bad?
And a second question (which I will consider in another post): does a chance at a cash (giftcard) giveaway make associated book reviews inherently biased? (Be careful how you answer)