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The Importance of Geographic Wine Appellations: Hedonic Pricing of Burgundy Wines in the British Columbia Wine Market

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  • Richard Carew
  • Wojciech J. Florkowski

Abstract

To examine the buying habits of British Columbia (BC) wine consumers and their appreciation of French wine attributes, we estimate a hedonic price function for Burgundy wines which comprise an array of different appellations, vintages, and alcohol levels. BC ranks among the top three wine‐consuming provinces in Canada and residents' wine preferences are likely linked to an emerging sophistication in tastes. This study uses weekly retail sales data and attributes of Burgundy wines reported by the BC Liquor Distribution Branch. The results confirm the collective reputation effects of the Burgundy wine region and show that the implicit values differ between white and red Burgundy wines with village designation and vintage having a relatively larger effect on white wine prices than in the case of red wines. Burgundy white wines, such as Aloxe‐Corton, Chassagne‐Montrachet Premier Cru, Meursault Premier Cru, and Chablis Grand Cru, were associated with larger price premia. Afin d'examiner les habitudes d'achat des consommateurs de vin de la Colombie−Britannique et leur appréciation des caractéristiques des vins français, nous avons estimé une fonction de prix hédoniste des vins de Bourgogne d'appellations, de millésimes et de degrés d'alcool variés. La Colombie−Britannique figure parmi les trois provinces canadiennes où l'on consomme le plus de vin, et les préférences des consommateurs de vin découlent probablement d'un raffinement des goûts. Dans la présente étude, nous avons utilisé les données des ventes au détail hebdomadaires et les caractéristiques des vins de Bourgogne fournies par la Société des alcools de la Colombie‐Britannique (BC Liquor Distribution Branch). Les résultats confirment les effets de la réputation de la région viticole de la Bourgogne et montrent que les valeurs implicites diffèrent entre les vins de Bourgogne blancs et rouges, et que l'appellation «village» et le millésime influent davantage sur les prix des vins blancs que sur ceux des vins rouges. Les prix des vins de Bourgogne blancs, tels que Aloxe‐Corton, Chassagne‐Montrachet Premier Cru, Meursault Premier Cru et Chablis Grand Cru, ont présenté des primes plus élevées.

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  • Richard Carew & Wojciech J. Florkowski, 2010. "The Importance of Geographic Wine Appellations: Hedonic Pricing of Burgundy Wines in the British Columbia Wine Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 93-108, March.
    • Handle: RePEc:bla:canjag:v:58:y:2010:i:1:p:93-108
    DOI: 10.1111/j.1744-7976.2009.01160.x
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    References listed on IDEAS

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    1. Jean‐Sauveur Ay, 2021. "The Informational Content of Geographical Indications," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 523-542, March.
    2. Andrango, Graciela & Canales, Elizabeth, 2017. "Determinants of the Argentinean Wine Price," Journal of Food Distribution Research, Food Distribution Research Society, vol. 48(1), March.
    3. García Arancibia, Rodrigo & Rossini, Gustavo & Depetris Guiguet, Edith, 2015. "Wine Label Descriptors and Shelf Price Paid by Argentine Consumers," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 16(2), pages 1-17.
    4. Aleixandre, José Luis & Aleixandre-Tudó, José Luis & Bolaños-Pizarro, Máxima & Aleixandre-Benavent, Rafael, 2016. "Viticulture and oenology scientific research: The Old World versus the New World wine-producing countries," International Journal of Information Management, Elsevier, vol. 36(3), pages 389-396.
    5. YOO, Veronica & FLORKOWSKI, Wojciech J. & CAREW, Richard, 2015. "Pricing Attributes Of Wines From Emerging Suppliers On The British Columbia Market," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 18(2), pages 1-12, October.
    6. Palma, David & Dios Ortuzar, Juan de & Casaubon, Gerard & Rizzi, Luis I. & Agosin, Eduardo, 2013. "Measuring consumer preferences using hybrid discrete choice models," Working Papers 164855, American Association of Wine Economists.
    7. Peter Gal & Attila Jambor, 2020. "Geographical Indications as Factors of Market Value: Price Premiums and Their Drivers in the Hungarian Off-Trade Wine Market," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(2), June.

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