Determinants of Demand for Wine – price sensitivity and perceived quality in a monopoly setting
AbstractThe 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.
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Bibliographic InfoPaper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 182.
Length: 40 pages
Date of creation: 04 Jun 2009
Date of revision:
Contact details of provider:
Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
More information through EDIRC
consumer preferences; wine; quality; price elasticity; heterogeneous goods;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-06-03 (Agricultural Economics)
- NEP-ALL-2009-06-03 (All new papers)
- NEP-CUL-2009-06-03 (Cultural Economics)
- NEP-MKT-2009-06-03 (Marketing)
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