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Quality classifications in competition: Price formation in the German wine market

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  • Rössel, Jörg
  • Beckert, Jens

Abstract

How do judgment devices influence price formation? We investigate this question through a study of the German wine market. The German wine market is characterized by the simultaneous existence of two classification systems: the official classification system referring to the quality in the glass, and the concept of terroir, introduced by a private association of quality winemakers, the Verband deutscher Prädikatsweingüter. We used a data set comprising 1,890 wines from 248 different wineries in the German wine-growing regions of Rheingau and Rheinhessen. Our results show that the two classification systems function as mutually exclusive strategic options for winemakers. We also show that the non-official classification of terroir is much more powerful in explaining price formation within the market. -- Welchen Einfluss haben Klassifikationssysteme auf den Preis eines Produktes? Wir gehen dieser Frage anhand einer Untersuchung des deutschen Weinmarktes nach. Der deutsche Weinmarkt zeichnet sich durch die Besonderheit aus, dass es zwei nebeneinander bestehende Bewertungssysteme gibt. Auf der einen Seite steht das offizielle Klassifikationssystem des geltenden Weinrechts, das die Qualität im Glas misst; auf der anderen das vom privaten Verband deutscher Prädikatsweingüter eingeführte, auf dem Terroir-Prinzip beruhende System. Auf der Grundlage eines Datensatzes von 1.890 verschiedenen Weinen von 248 Weingütern aus dem Rheingau und aus Rheinhessen zeigen wir, dass die beiden Klassifikationssysteme einander ausschließen und dass das Terroir-System sehr viel einflussreicher bei der Preisbildung auf dem Markt ist.

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Bibliographic Info

Paper provided by Max Planck Institute for the Study of Societies in its series MPIfG Discussion Paper with number 12/3.

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Date of creation: 2012
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Handle: RePEc:zbw:mpifgd:123

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  1. Almenberg, Johan & Dreber, Anna, 2009. "When Does The Price Affect The Taste? Results From A Wine Experiment," Working Papers 51755, American Association of Wine Economists.
  2. Jean-Marie Cardebat & Jean-Marc Figuet, 2004. "What explains Bordeaux wine prices?," Applied Economics Letters, Taylor & Francis Journals, vol. 11(5), pages 293-296.
  3. Michael B. Beverland, 2005. "Crafting Brand Authenticity: The Case of Luxury Wines," Journal of Management Studies, Wiley Blackwell, vol. 42(5), pages 1003-1029, 07.
  4. HélaHadj Ali & Sébastien Lecocq & Michael Visser, 2008. "The Impact of Gurus: Parker Grades and "En Primeur" Wine Prices," Economic Journal, Royal Economic Society, vol. 118(529), pages F158-F173, 06.
  5. Richard Arnott & Joseph Stiglitz, 1986. "The Welfare Economics of Moral Hazard," Working Papers 635, Queen's University, Department of Economics.
  6. Pierre Combris & Sebastien Lecocq & Michael Visser, 2000. "Estimation of a hedonic price equation for Burgundy wine," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 961-967.
  7. Landon, Stuart & Smith, Constance, 1997. "The Use of Quality and Reputation Indicators by Consumers: The Case of Bordeaux Wine," MPRA Paper 9283, University Library of Munich, Germany.
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Cited by:
  1. Beckert, Jens & Rössel, Jörg & Schenk, Patrick, 2014. "Wine as a cultural product: Symbolic capital and price formation in the wine field," MPIfG Discussion Paper 14/2, Max Planck Institute for the Study of Societies.

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