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Wine prices and quality eatings: a meta-regression analysis

Oczkowski, Edward and Doucouliagos, Hristos 2015, Wine prices and quality eatings: a meta-regression analysis, American journal of agricultural economics, vol. 97, no. 1, pp. 103-121, doi: 10.1093/ajae/aau057.

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Title Wine prices and quality eatings: a meta-regression analysis
Author(s) Oczkowski, Edward
Doucouliagos, Hristos
Journal name American journal of agricultural economics
Volume number 97
Issue number 1
Start page 103
End page 121
Total pages 19
Publisher Oxford University Press
Place of publication Oxford, Eng.
Publication date 2015-01
ISSN 0002-9092
1467-8276
Keyword(s) hedonic wine prices
incomplete information
meta-regression
wine quality
Summary This article examines the empirical support for the hypothesized hedonic theoretical relation between the price of wine and its quality. The examination considers over 180 hedonic wine price models developed over 20 years, covering many countries. The research identifies that the relation between the price of wine and its sensory quality rating is a moderate partial correlation of +0.30. This correlation exists despite the lack of information held by consumers about a wine’s quality and the inconsistency of expert tasters when evaluating wines. The results identify a moderate price-quality correlation, which suggests the existence of strategic buying opportunities for better informed consumers. Strategic price setting possibilities may also exist for wine producers given the incomplete quality information held by consumers. The results from the meta-regression analysis point to the absence of any publication bias, and attribute the observed asymmetry in estimates to study heterogeneity. The analysis suggests the observed heterogeneity is explained by the importance of a wine’s reputation, the use of the 100-point quality rating scale, the analysis of a single wine variety/style, and the employed functional form. The most important implication from the analysis is the relative importance of a wine’s reputation over its sensory quality, inferring that producers need to sustain the sensory quality of a wine over time to extract appropriate returns. The reputation of the wine producer is found not to influence the strength of the price quality relationship. This finding does not contradict the importance of wine producer reputation in directly influencing prices.
Language eng
DOI 10.1093/ajae/aau057
Field of Research 140209 Industry Economics and Industrial Organisation
1402 Applied Economics
Socio Economic Objective 910201 Consumption
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2014, The Authors
Persistent URL http://hdl.handle.net/10536/DRO/DU:30088180

Document type: Journal Article
Collection: Department of Economics
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