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Home Bias in Consumption: A Comparison between Wine and Beer

Author

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  • Olper, Alessandro
  • Curzi, Daniele
  • Frisio, Dario Gianfranco
  • Raimondi, Valentina

Abstract

This paper investigates the determinants of home bias in consumption in the beer and wine markets across 15 ‘old’ member states of the European Union (EU) during the period 2000-2009. Two main results are obtained using a theory-driven gravity equation. Firstly, the home bias in beer consumption is several orders of magnitude higher than that of wine. Secondly, and interestingly, consumer preferences seem to be driving the home bias in the wine sector. In contrast, the home bias in beer is widely attributable to the home market effect, namely firms tend to localize near the consumers in order to minimize the high trade costs associated with beer exports. Der Beitrag analysiert die Bestimmungsfaktoren der Präferenz für heimisches Bier und heimischen Wein in den 15 alten EU Mitgliedsstaaten zwischen 2000- 2009. Unser theoriebezogenes “Gravitationsmodell” führt zu zwei Hauptschlussfolgerungen. Erstens liegt die Heimatsmarkt-Präferenz für Bierkonsum um mehrere Größenordnungen höher als jene für Wein. Zweitens spielen interessanterweise die Vorlieben der Verbraucher eine ausschlaggebende Rolle für die Heimatsmarkt- Präferenz im Weinsektor. Im Biersektor dagegen ist die Präferenz für nationales Bier dem Heimatsmarkt-Effekt zuzuschreiben: um hohe Transportkosten zu vermeiden, haben Brauereien die Tendenz sich in der Nähe der Endverbraucher niederzulassen.

Suggested Citation

  • Olper, Alessandro & Curzi, Daniele & Frisio, Dario Gianfranco & Raimondi, Valentina, 2012. "Home Bias in Consumption: A Comparison between Wine and Beer," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 61(04), pages 1-12, November.
    • Handle: RePEc:ags:gjagec:199782
    DOI: 10.22004/ag.econ.199782
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    2. Dreyer, Heiko & Fedoseeva, Svetlana & Herrmann, Roland, 2016. "Gravity Meets Pricing To Market: What A Combinedmethod Approach Tells Us On German Beer Exports," Working Papers 234640, American Association of Wine Economists.
    3. Anthony Macedo & Sofia Gouveia & João Rebelo, 2019. "Does Wine Quality Have a Bearing on Exports?," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 11(4), December.

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