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The effect of South African wine certifications on price premiums and marginal costs: A two-stage hedonic approach

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  • Niklas, Britta

Abstract

This paper analyses whether there are price premiums for certified and black economic empowerment (BEE) South African wines in the domestic market and the major export markets (Germany, United Kingdom, the Netherlands, and Belgium) and estimates what (marginal) costs are related to supplying these certifications. The results suggest price premiums for BEE wines, while for certified wines price premiums only apply in some markets and especially for those certifications that focus on the environment and organic production, but not for those that focus on fair trade or labor. The results for marginal costs suggest that subsidized BEE wines sell lower quantities but gain access to higher price segments, while the opposite holds true for certified wines. Additionally, for certified wines (except Fairtrade), younger and private producers have a comparative cost advantage.

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  • Niklas, Britta, 2024. "The effect of South African wine certifications on price premiums and marginal costs: A two-stage hedonic approach," Economic Modelling, Elsevier, vol. 132(C).
    • Handle: RePEc:eee:ecmode:v:132:y:2024:i:c:s0264999324000063
    DOI: 10.1016/j.econmod.2024.106650
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    More about this item

    Keywords

    Revealed preferences; Wine prices; Certified wines; South african wines; Hedonic two-stage approach;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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