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Price determinants in top-quality e-auctioned specialty coffees

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  • M. Laura Donnet
  • Dave D. Weatherspoon
  • John P. Hoehn

Abstract

We analyze the price determinants of specialty coffees traded at e-auctions. We hypothesize that since specialty coffees are a highly differentiated product, prices will be determined by both sensory and reputation attributes. To test our hypotheses, we estimate a hedonic price function using data from Central and South American e-auctions and calculate the implicit prices of sensory and reputation attributes. The results show that market clearing prices are a function of sensory characteristics and reputation variables including third-party quality ranking, country of origin, coffee variety, and quantity. The additional attribute information disclosed at e-auctions results in substantially higher prices relative to conventional commodity coffee market prices. Copyright (c)2008 International Association of Agricultural Economists.

Suggested Citation

  • M. Laura Donnet & Dave D. Weatherspoon & John P. Hoehn, 2008. "Price determinants in top-quality e-auctioned specialty coffees," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 267-276, May.
  • Handle: RePEc:bla:agecon:v:38:y:2008:i:3:p:267-276
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    References listed on IDEAS

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    Cited by:

    1. Minten, Bart & Tamru, Seneshaw & Kuma, Tadesse & Nyarko, Yaw, 2014. "Structure and Performance of Ethiopia’s Coffee Export Sector," Proceedings Issues, 2014: Food, Resources and Conflict, December 7-9, 2014, San Diego, California 197157, International Agricultural Trade Research Consortium.
    2. Donnet, M. Laura & Weatherspoon, Dave D. & Hoehn, John P., 2007. "What Adds Value in Specialty Coffee? Managerial Implications from Hedonic Price Analysis of Central and South American E-Auctions," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 10(03).
    3. Jones, Eugene, 2014. "An Empirical Assessment of Consumers’ Preferences for Coffee," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), July.
    4. Zhang, Huifang & Gallardo, Rosa Karina & McCluskey, Jill J. & Kupferman, Eugene M., 2010. "Consumers' Willingness to Pay for Treatment-Induced Quality Attributes in Anjou Pears," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(1), April.
    5. Wilson, Norbert, 2014. "When Higher Quality Does Not Translate to Higher Prices: A Case of Quality and Specialty Coffees from the Cup of Excellence Auctions," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170701, Agricultural and Applied Economics Association.
    6. Teuber, Ramona & Herrmann, Roland, 2012. "Towards a differentiated modeling of origin effects in hedonic analysis: An application to auction prices of specialty coffee," Food Policy, Elsevier, vol. 37(6), pages 732-740.
    7. Adam P. Wilson & Norbert L.W. Wilson, 2014. "The economics of quality in the specialty coffee industry: insights from the Cup of Excellence auction programs," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 91-105, November.
    8. Eilson, Norbert L.W., 2015. "When Higher Quality Does Not Translate to Higher Prices: A Case of Quality and Specialty Coffees from the Cup of Excellence Auctions," 2015 Conference, August 9-14, 2015, Milan, Italy 211898, International Association of Agricultural Economists.
    9. M. Laura Donnet & Dave D. Weatherspoon & Charles B. Moss, 2010. "Measuring Food Product Differentiation by Quality Ratings: A Cross-Entropy Analysis of Specialty Coffee e-Auctions," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(1), pages 122-137.
    10. Herrmann, Roland & Marauhn, Thilo & Teuber, Ramona, 2008. "Der Schutz geographischer Herkunftsangaben: Herausforderungen für agrarökonomische, rechtswissenschaftliche und interdisziplinäre Forschung," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 57(7).
    11. Satimanon, Thasanee & Weatherspoon, Dave D., 2010. "Hedonic Analysis of Sustainable Food Products," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 13(4).
    12. Ebata, Ayako & Velasco, Pamela & von Cramon-Taubadel, Stephan, 2015. "Distance to market and farm-gate prices of staple beans in rural Nicaragua," Discussion Papers 197540, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    13. Ebata, Ayako & Pacheco, Pamela Alejandra & Cramon-Taubadel, Stephan von, 2015. "Distance to market and farm-gate prices of staple beans in rural Nicaragua," 2015 Conference, August 9-14, 2015, Milan, Italy 211582, International Association of Agricultural Economists.
    14. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
    15. Teuber, Ramona, 2008. "Geographical Indications and the Value of Reputation - Empirical Evidence for Cafe de Marcala," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43835, European Association of Agricultural Economists.

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