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Price Hedonics of Beers: Effects of Alcohol Content, Quality Rating, and Production Country

Author

Listed:
  • Thrane Christer

    (Inland School of Business and Social Science, Inland Norway University of Applied Sciences, Lillehammer, 2604, Norway)

  • Lien Gudbrand

    (Inland School of Business and Social Science, Inland Norway University of Applied Sciences, Lillehammer, 2604, Norway)

  • Mehmetoglu Mehmet

    (Inland School of Business and Social Science, Inland Norway University of Applied Sciences, Lillehammer, 2604, Norway)

  • Størdal Ståle

    (Inland School of Business and Social Science, Inland Norway University of Applied Sciences, Lillehammer, 2604, Norway)

Abstract

We examine the association between beer prices and the inherent characteristics of beers within the traditional price hedonic framework. Using a large-scale Norwegian data set with more than 9000 individual beer products from several production countries, we find that alcohol content has a strong, positive, and significant effect on the retail price of beer. In contrast, the effect of expert quality rating on beer price appears to be of only small to moderate importance. We also find significant and substantially important price differences between production countries. Finally, there is effect heterogeneity (i.e. interaction effects) for both alcohol content and quality rating with respect to production country. For example, the association between alcohol content and price is larger in Norway and Germany than in most of the other production countries in the data.

Suggested Citation

  • Thrane Christer & Lien Gudbrand & Mehmetoglu Mehmet & Størdal Ståle, 2024. "Price Hedonics of Beers: Effects of Alcohol Content, Quality Rating, and Production Country," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 22(1), pages 33-40.
    • Handle: RePEc:bpj:bjafio:v:22:y:2024:i:1:p:33-40:n:1005
    DOI: 10.1515/jafio-2023-0048
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    More about this item

    Keywords

    beer; beer price; Norway; hedonic price modeling;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Z1 - Other Special Topics - - Cultural Economics

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