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Determinants of Wineries’ Decisions to Seek VQA Certification in the Canadian Wine Industry

Author

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  • Ugochukwu, Albert I.
  • Hobbs, Jill E.
  • Bruneau, Joel F.

Abstract

The establishment of quality assurance systems is an important development in the wine sector, particularly so for new and emerging wine regions. Focusing on the Canadian wine industry, this article examines the determinants of a winery's decision to adopt Vintners Quality Alliance (VQA) certification for wines. The analysis also examines whether wineries seek VQA certification for higher-priced wines or whether VQA certification leads to higher wine prices. To examine the certification decision, a probit model is applied to a detailed data set of Canadian wines sold in Ontario over the period 2007–2012. Wines from wineries that supply large volumes of wines (more than 1,000 cases) are more likely to have VQA certification, as well as ice wines and wines from specific regions. A Hausman specification test for endogeneity suggests that VQA certification leads to higher wine prices and not the other way around. (JEL Classifications: D22, L15, L66, Q13)

Suggested Citation

  • Ugochukwu, Albert I. & Hobbs, Jill E. & Bruneau, Joel F., 2017. "Determinants of Wineries’ Decisions to Seek VQA Certification in the Canadian Wine Industry," Journal of Wine Economics, Cambridge University Press, vol. 12(1), pages 16-36, February.
    • Handle: RePEc:cup:jwecon:v:12:y:2017:i:01:p:16-36_00
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    Citations

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    Cited by:

    1. Alicia L. Rihn & Kimberly L. Jensen & David W. Hughes, 2022. "Consumer Perceptions of Wine Quality Assurance Programs: An Opportunity for Emerging Wine Markets," Sustainability, MDPI, vol. 14(4), pages 1-16, February.
    2. 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.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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