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Wine prices and quality eatings: a meta-regression analysis
journal contribution
posted on 2015-01-01, 00:00 authored by E Oczkowski, Chris DoucouliagosChris DoucouliagosThis 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.
History
Journal
American journal of agricultural economicsVolume
97Issue
1Pagination
103 - 121Publisher
Oxford University PressLocation
Oxford, Eng.Publisher DOI
ISSN
0002-9092eISSN
1467-8276Language
engPublication classification
C Journal article; C1.1 Refereed article in a scholarly journalCopyright notice
2014, The AuthorsUsage metrics
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No categories selectedKeywords
hedonic wine pricesincomplete informationmeta-regressionwine qualityScience & TechnologySocial SciencesLife Sciences & BiomedicineAgricultural Economics & PolicyEconomicsAgricultureBusiness & EconomicsSENSORY PROPERTIESHEDONIC PRICESEXPERTMETAANALYSISDETERMINANTSINFORMATIONRELIABILITYREPUTATIONMODELS
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