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A Methodology for Evaluating How Product Characteristics Impact Choice in Retail Settings with Many Zero Observations: An Application to Restaurant Wine Purchase

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  • Durham, Catherine A.
  • Pardoe, Iain
  • Vega-H, Esteban

Abstract

An approach is developed to examine the impact of product characteristics on choice using a quantity-dependent hedonic model with retail panel data. Since panel data for individual products from retail settings can include a large number of zero sales, a modification of the zero-inflated Poisson (ZIP) regression model is proposed for estimation. Results for this model compare favorably to results for alternative hurdle and negative binomial models. An application of this methodology to restaurant wine sales produces useful results regarding sensory characteristics, price, and origin/varietal information.

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  • Durham, Catherine A. & Pardoe, Iain & Vega-H, Esteban, 2004. "A Methodology for Evaluating How Product Characteristics Impact Choice in Retail Settings with Many Zero Observations: An Application to Restaurant Wine Purchase," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(1), pages 1-20, April.
    • Handle: RePEc:ags:jlaare:31138
    DOI: 10.22004/ag.econ.31138
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    1. Chen, Kuan-Ju & McCluskey, Jill J., 2018. "Impacts of Expert Information on Prices for an Experience Good across Product Segments: Tasting Notes andWine Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(3), September.
    2. Yoshitsugu Kitazawa, 2014. "Consistent estimation for the full-fledged fixed effects zero-inflated Poisson model," Discussion Papers 66, Kyushu Sangyo University, Faculty of Economics.
    3. Livat, Florine & Alston, Julian M. & Cardebat, Jean-Marie, 2019. "Do denominations of origin provide useful quality signals? The case of Bordeaux wines," Economic Modelling, Elsevier, vol. 81(C), pages 518-532.
    4. Resano, H. & Sanjuan, Ana Isabel, 2008. "An hedonic approach applied to scanner data on cured ham purchases in Spain," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44383, European Association of Agricultural Economists.
    5. Philippidis, George & Resano-Ezcaray, Helena & Sanjuan-Lopez, Ana Isabel, 2011. "Capturing zero trade values in gravity equations of trade: A disaggregated sectoral analysis," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114760, European Association of Agricultural Economists.
    6. Tim Reid & Mark Hindell & Jennifer L Lavers & Chris Wilcox, 2013. "Re-Examining Mortality Sources and Population Trends in a Declining Seabird: Using Bayesian Methods to Incorporate Existing Information and New Data," PLOS ONE, Public Library of Science, vol. 8(4), pages 1-9, April.
    7. Gerald Shoultz & Jimmie Givens & J. Drane, 2007. "Urban Form, Heart Disease, and Geography: A Case Study in Composite Index Formation and Bayesian Spatial Modeling," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 26(5), pages 661-685, December.

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