Advanced Search
MyIDEAS: Login to save this article or follow this journal

Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products

Contents:

Author Info

  • Marco Costanigro
  • Jill J. McCluskey
  • Ron C. Mittelhammer

Abstract

Many economists have estimated hedonic price functions for red and white wine. However, estimating a single hedonic price function imposes the assumption that the implicit prices of the attributes are the same for any red or white wine. We argue that even within these two categories, wines are differentiated, and disregarding this heterogeneity causes an aggregation bias in the estimated implicit prices. By estimating hedonic functions specific to price ranges, we show that the wine market is segmented into several product classes or market segments. We find that a model accounting for the existence of wine classes has greater ability to explain the variability in the data and produces more accurate and interpretable results regarding the implicit prices of the attributes. Copyright 2007 The Agricultural Economics Society.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1477-9552.2007.00118.x
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Agricultural Economics.

Volume (Year): 58 (2007)
Issue (Month): 3 (09)
Pages: 454-466

as in new window
Handle: RePEc:bla:jageco:v:58:y:2007:i:3:p:454-466

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0021-857X

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0021-857X

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Sanja Lutzeyer, 2008. "Estimating Hedonic Prices for Stellenbosch wine," Working Papers 15/2008, Stellenbosch University, Department of Economics.
  2. Chengyan Yue & Stephan Marette & John Beghin, 2013. "How to promote quality perception in wine markets: brand advertising or geographical indication?," Working Papers 210541, Institut National de la Recherche Agronomique, France.
  3. Teuber, Ramona & Herrmann, Roland, 2012. "Towards a Differentiated Modelling of Origin Effects in Hedonic Analysis:An Application to Auction Prices of Specialty Coffee," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil, International Association of Agricultural Economists 126235, International Association of Agricultural Economists.
  4. Davis, Timothy R. & Ahmadi-Esfahani, Fredoun Z. & Iranzo, Susana, . "Demand under product differentiation: an empirical analysis of the US wine market," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, Australian Agricultural and Resource Economics Society.
  5. Costanigro, Marco & McCluskey, Jill J. & Mittelhammer, Ronald C., 2006. "Identifying submarket in the wine industry: a multivariate approach to hedonic regression," 2006 Annual meeting, July 23-26, Long Beach, CA, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21370, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  6. Corsi, Alessandro & Strøm, Steinar, 2013. "The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation," Memorandum, Oslo University, Department of Economics 07/2013, Oslo University, Department of Economics.
  7. Leufkens, Daniel & Schröck, Rebecca, 2013. "Regulierungspolitische Effekte geschützter geografischer Herkunftsangaben der EU in einer dynamischen und qualitätspolitischen Perspektive," 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 156119, German Association of Agricultural Economists (GEWISOLA).
  8. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
  9. Pennerstorfer, Dieter & Weiss, Christoph R., 2011. "Do Cooperatives Offer High Quality Products? Theory and Empirical Evidence from the Wine Market," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland, European Association of Agricultural Economists 115741, European Association of Agricultural Economists.
  10. Antonis Michis & Anna Markidou, 2013. "Determinants of retail wine prices: evidence from Cyprus," Empirical Economics, Springer, Springer, vol. 45(1), pages 267-280, August.
  11. Schollenberg, Linda, 2011. "So how much do you pay for ethical consumption? Estimating the hedonic price for Fair Trade coffee in Sweden," HUI Working Papers, HUI Research 31, HUI Research.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:jageco:v:58:y:2007:i:3:p:454-466. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.