Combining Consumer Valuation Research with Sensory Science Techniques: A Laboratory Experiment

In this research, we integrated an experimental auction with sensory science techniques—namely, trained sensory panels used to analyze the sensory attributes of wines—to examine the effects of objective and sensory information in the market for California-produced Cabernet Sauvignons. The experiment permitted observation of consumer valuation for sensory attributes of wine, appellations, expert ratings, and wineries. Participants submitted bids each time they received new information about the wines. The balanced experimental design permits evaluation of the effects of consumer characteristics on attribute valuation. We had 236 people participate in the research, which consisted of nine rounds of bidding and one round of hedonic liking scores. Rounds 5-9 repeated the structure of information released in rounds 1-4, but added sensory information, yielding 472 observations for each type of information (e.g. appellation, expert rating, winery). We obtain a total of 8496 valuations, or bids and 944 hedonic “liking” ratings, as well as demographic information, wine consumption data, and a wine knowledge score for each consumer. The results of the research agree with many of the previously held notions about valuation of wine by consumers. Participants value Cabernet Sauvignons from Napa Valley and Sonoma County and their sub-appellations more than wines labeled with the California appellation. Bids for wines rated by experts such as the Wine Advocate (Robert Parker) or Wine Spectator increased as the experts’ ratings increased. However, we also find that consumer characteristics are very important in explaining WTP for wine attributes. The contributions of prestigious appellations to the value of Cabernet Sauvignons depended on consumer characteristics. Willingness to pay was highly correlated with sensory evaluation, but even after tasting the wine, appellation and expert ratings still mattered for WTP. Overall, the research describes a significant amount of heterogeneity in the preferences for sensory characteristics of wine, and that individual characteristics systematically explain many of the differences in valuation of wine attributes.