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Price Heterogeneity and Vine Homogeneity: An Ordered Logit Hedonic Price Estimation

Author

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  • Pomarici, Eugenio
  • Caracciolo, Francesco
  • Cembalo, Luigi

Abstract

Consumers face complex choices when they buy wine: wine is a highly differentiated product sold at prices that vary over a wide range. This paper aims to provide monetary valuation of some relevant credence attributes of the wine, such as certifications and quality ratings made by expert tasters. In order to value the latter, a hedonic price estimation was performed on a specific Italian grape variety (Aglianico). The implicit price of DOC-DOCG certification is of extreme importance. It gives access to a collective reputation and enables a premium price to be captured from consumers.

Suggested Citation

  • Pomarici, Eugenio & Caracciolo, Francesco & Cembalo, Luigi, 2012. "Price Heterogeneity and Vine Homogeneity: An Ordered Logit Hedonic Price Estimation," 2012 International European Forum, February 13-17, 2012, Innsbruck-Igls, Austria 144957, International European Forum on System Dynamics and Innovation in Food Networks.
    • Handle: RePEc:ags:iefi12:144957
    DOI: 10.22004/ag.econ.144957
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    References listed on IDEAS

    as
    1. Kym Anderson & David Norman & Glyn Wittwer, 2019. "Globalisation of the World’s Wine Markets," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 2, pages 27-50, World Scientific Publishing Co. Pte. Ltd..
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    5. Günter Schamel & Kym Anderson, 2019. "Wine Quality and Varietal, Regional and Winery Reputations: Hedonic Prices for Australia and New Zealand," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 10, pages 225-253, World Scientific Publishing Co. Pte. Ltd..
    6. Edward Oczkowski, 2001. "Hedonic Wine Price Functions and Measurement Error," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 374-382, December.
    7. Lusk, Jayson L. & Roosen, Jutta & Shogren, Jason (ed.), 2011. "The Oxford Handbook of the Economics of Food Consumption and Policy," OUP Catalogue, Oxford University Press, number 9780199569441.
    8. Combris, Pierre & Lecocq, Sebastien & Visser, Michael, 1997. "Estimation for a Hedonic Price Equation for Bordeaux Wine: Does Quality Matter?," Economic Journal, Royal Economic Society, vol. 107(441), pages 390-402, March.
    9. Schamel, Guenter, 2003. "A Hedonic Pricing Model for German Wine," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 52(05), pages 1-8.
    10. Hayes, Dermot J. & Kliebenstein, James & Shogren, Jason F. & Fox, John A., 1995. "Economics of Food Safety," Staff General Research Papers Archive 10453, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

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