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Determinants of Demand for Wine – price sensitivity and perceived quality in a monopoly setting

Author

Listed:
  • Dahlström, Tobias

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Åsberg, Erik

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

The purpose of this paper is to characterise the demand for wine. In contrast to the majority of current research efforts this paper treats wine as a heterogeneous good with a range of inherent characteristics. Each wine included in the study is described by twelve variables including, among others, price, quality, sensory attributes and country of origin. Using unique data that cover 90 percent of all wines sold in Sweden we conclude that consumers do recognise quality in wine, that price elasticity is non-constant and decreasing with price and that consumers put a great deal of weight on the country of origin of the wine.

Suggested Citation

  • Dahlström, Tobias & Åsberg, Erik, 2009. "Determinants of Demand for Wine – price sensitivity and perceived quality in a monopoly setting," Working Paper Series in Economics and Institutions of Innovation 182, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0182
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    Cited by:

    1. Wallentin, Erik, 2016. "Demand for cinema and diverging tastes of critics and audiences," Journal of Retailing and Consumer Services, Elsevier, vol. 33(C), pages 72-81.

    More about this item

    Keywords

    consumer preferences; wine; quality; price elasticity; heterogeneous goods;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly

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