The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation
AbstractOrganic wines are increasingly produced and appreciated. Since organic production is more costly, a crucial question is whether they benefit from a price premium. We estimate hedonic price functions for Piedmont organic and conventional wines. We use data on the production side in addition to variables of interest for consumers. Our results show that, along with characteristics of interest to consumers, some farm and producer characteristics not directly relevant for consumers do significantly affect wine prices. We find that organic wine tends to obtain higher prices than conventional wine. The price premium is not simply an addition to other price components, but organic quality modifies the impact of the other variables on price.
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Bibliographic InfoPaper provided by Oslo University, Department of Economics in its series Memorandum with number 07/2013.
Length: 28 pages
Date of creation: 11 Mar 2013
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
More information through EDIRC
Organic wines; Hedonic price functions; Farming; Prices; Price variables;
Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-05-05 (Agricultural Economics)
- NEP-ALL-2013-05-05 (All new papers)
- NEP-CWA-2013-05-05 (Central & Western Asia)
- NEP-MKT-2013-05-05 (Marketing)
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