Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market
AbstractThe effect of expert opinion on demand for experience goods is difficult to quantify, as the relationship between purchases and reviews may be driven by product quality. Further, it is unclear whether a review-based demand effect is due to providing quality or existence information. Using a retail field experiment to overcome these obstacles, we find a significant positive average consumer response to expert opinion labels for wine. Demand decreases for low-scoring wines and increases for wines scoring average or higher. Results indicate that expert opinion labels transmit quality information as opposed to solely shelf visibility. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal Review of Economics and Statistics.
Volume (Year): 93 (2011)
Issue (Month): 4 (November)
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Other versions of this item:
- Hilger, James & Rafert, Greg & Villas-Boas, Sofia B, 2009. "Expert Opinion and the Demand for Experience Goods : an experimental approach in the retail wine market," CUDARE Working Paper Series 1049, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Hilger, James & Rafert, Greg & Villas-Boas, Sofia B, 2011. "Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4nc7h417, Department of Agricultural & Resource Economics, UC Berkeley.
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