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The Hedonic Price for Italian Red Wine: Do Chemical and Sensory Characteristics Matter?

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  • Rosella Levaggi
  • Eugenio Brentari

Abstract

ABSTRACT In this article, we study the main determinants of price for Italian red wine sold on the domestic market via the estimation of a hedonic price function for the period 2005–2009. For each bottle considered, our dataset contains several characteristics, such as the price by retail channel (price in supermarkets and in wine shops), label characteristics, chemical analysis and sensory and experts’ evaluations. The unique features of the dataset allow us to study the price formation in the different market segments. The analysis shows that in the large‐scale retail trade consumers value most what is written on the label, but only if it is a verifiable characteristic; label characteristics are also important in wine shops, but a selection process exists to enter this market. Finally, selling wine via both channels appears to be a winning strategy: it allows the price to be increased in the large‐scale retail trade, but it does not reduce the price in wine shops.

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  • Rosella Levaggi & Eugenio Brentari, 2014. "The Hedonic Price for Italian Red Wine: Do Chemical and Sensory Characteristics Matter?," Agribusiness, John Wiley & Sons, Ltd., vol. 30(4), pages 385-397, September.
    • Handle: RePEc:wly:agribz:v:30:y:2014:i:4:p:385-397
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    File URL: http://hdl.handle.net/10.1002/agr.21377
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    Cited by:

    1. Francesca Bassi & Fulvia Pennoni & Luca Rossetto, 2020. "The Italian market of sparkling wines: Latent variable models for brand positioning, customer loyalty, and transitions across brands' preferences," Agribusiness, John Wiley & Sons, Ltd., vol. 36(4), pages 542-567, October.
    2. Eugenio Brentari & Rosella Levaggi & Paola Zuccolotto, 2015. "A hedonic price analysis for the Italian wine in the domestic market," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(3), pages 999-1012, May.
    3. Caracciolo, Francesco & D’Amico, Mario & Di Vita, Giuseppe & Pomarici, Eugenio & Dal Bianco, Andrea & Cembalo, Luigi, 2016. "Private vs. Collective Wine Reputation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(3), pages 1-20, August.
    4. Radovanović Vladimir & Petrović Jelena & Đorđević Dejan Ž., 2017. "Wine Marketing: Impact of Demographic Factors of Serbian Consumers On the Choice of Wine," Economic Themes, Sciendo, vol. 55(2), pages 199-215, June.
    5. Petjon Ballco & Fatma Jaafer & Tiziana de Magistris, 2022. "Investigating the price effects of honey quality attributes in a European country: Evidence from a hedonic price approach," Agribusiness, John Wiley & Sons, Ltd., vol. 38(4), pages 885-904, October.
    6. Nicholas G. Marconi & Neal H. Hooker & Nicholas DiMarcello III, 2017. "What's in a Name? The Impact of Fair Trade Claims on Product Price," Agribusiness, John Wiley & Sons, Ltd., vol. 33(2), pages 160-174, April.
    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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