Price Determinants in Top Quality E-Auctioned Specialty Coffees
AbstractThe US specialty coffee industry has grown from $1 billion in 1990 to $11 billion in 2006 and is expected to continue to grow into the foreseeable future. This growth particularly depends on prices coordinating the specialty coffee supply chain through two-way information exchange between roasters and producers. We analyze the determinants of specialty coffee prices by estimating a hedonic price function for specialty Central and South American coffees traded at e-auctions. We hypothesize that since specialty coffee is a differentiated product, prices will be determined by both sensory and reputation attributes. The results show that prices are influenced by the quality rating, which is a sensory variable, and by the quality rankings established in the cupping competition previous to the auction, the country of origin and the coffee variety, which are reputation variables. In addition, the macro variables, harvest year and commodity price were found to be significant.
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Bibliographic InfoPaper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Staff Papers with number 9310.
Date of creation: 2007
Date of revision:
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More information through EDIRC
Specialty coffee; hedonic price analysis; differentiated food pricing; sensory attributes; reputation attributes; Demand and Price Analysis;
Other versions of this item:
- M. Laura Donnet & Dave D. Weatherspoon & John P. Hoehn, 2008. "Price determinants in top-quality e-auctioned specialty coffees," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 267-276, 05.
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