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Reduced form evidence on belief updating under asymmetric information-consumers' response to wine expert opinions

Author

Listed:
  • Celine Bonnet

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • James Hilger

    (SWFSC - Southwest Fisheries Science Center - NMFS - NOAA National Marine Fisheries Service - NOAA - National Oceanic and Atmospheric Administration)

  • Sofia Villas-Boas

    (Departement of Agricultural and Resource Economics (ARE) - UC - University of California)

Abstract

We estimate the effect of quality labels on purchases through a retail field experiment. Utilising product-level panel scanner and product characteristic data for both labelled and unlabelled wines we estimate the average and heterogeneous effect on purchases. Consistent with earlier work, we find an average effect that is positively correlated with scores. We advance the consumer belief and product information literature on two fronts. First, higher scores matter more for lower priced products. Second, spillover effects impact sales of untreated wines; these effects can be positive or negative and are impacted by the average score and label converge within brand.

Suggested Citation

  • Celine Bonnet & James Hilger & Sofia Villas-Boas, 2020. "Reduced form evidence on belief updating under asymmetric information-consumers' response to wine expert opinions," Post-Print hal-02960415, HAL.
    • Handle: RePEc:hal:journl:hal-02960415
    DOI: 10.1093/erae/jbz054
    as

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    Keywords

    Product attributes; Wine; Expert opinion; Information; Labels; Field experiment;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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