IDEAS home Printed from https://ideas.repec.org/a/bla/agecon/v55y2024i2p247-264.html
   My bibliography  Save this article

The hedonic price model for the wine market: A systematic and comparative review of the literature

Author

Listed:
  • Jacobo Núñez
  • David Martín‐Barroso
  • Francisco J. Velázquez

Abstract

This paper carries out a thorough review of the literature on the estimation of hedonic price functions in the wine market, compiling and carefully documenting all research work on the subject. The review analyses the main methodological decisions taken by the different authors, as well as the typology of the available databases: identification of the relevant market, specification of the price function, sources and types of prices, econometric methodology, and type of publication. The variance decomposition analysis of the Adjusted‐R‐squared values from the estimated hedonic price functions suggests that attribute selection, the definition of the product market, the characteristics of information sources, and the implemented econometric procedures are the most relevant factors in explaining the models’ explanatory power.

Suggested Citation

  • Jacobo Núñez & David Martín‐Barroso & Francisco J. Velázquez, 2024. "The hedonic price model for the wine market: A systematic and comparative review of the literature," Agricultural Economics, International Association of Agricultural Economists, vol. 55(2), pages 247-264, March.
    • Handle: RePEc:bla:agecon:v:55:y:2024:i:2:p:247-264
    DOI: 10.1111/agec.12818
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/agec.12818
    Download Restriction: no
    File URL: https://libkey.io/10.1111/agec.12818?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Héla Hadj Ali & Céline Nauges, 2007. "The Pricing of Experience Goods: The Example of en primeur Wine," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 91-103.
    2. Scott Morton, Fiona M & Podolny, Joel M, 2002. "Love or Money? The Effects of Owner Motivation in the California Wine Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 431-456, December.
    3. Oczkowski, Edward, 2016. "The Effect of Weather on Wine Quality and Prices: An Australian Spatial Analysis," Journal of Wine Economics, Cambridge University Press, vol. 11(1), pages 48-65, May.
    4. Niklas, Britta & Rinke, Wolfram, 2020. "Pricing Models for German Wine: Hedonic Regression vs. Machine Learning," Journal of Wine Economics, Cambridge University Press, vol. 15(3), pages 284-311, August.
    5. García Arancibia, Rodrigo & Rossini, Gustavo & Depetris Guiguet, Edith, 2015. "Wine Label Descriptors and Shelf Price Paid by Argentine Consumers," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 16(2), pages 1-17.
    6. Ramirez, Carlos D., 2010. "Do Tasting Notes Add Value? Evidence from Napa Wines," Journal of Wine Economics, Cambridge University Press, vol. 5(1), pages 143-163, April.
    7. Edward Oczkowski, 1994. "A Hedonic Price Function For Australian Premium Table Wine," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 38(1), pages 93-110, April.
    8. Caracciolo, Francesco & D’Amico, Mario & Di Vita, Giuseppe & Pomarici, Eugenio & Dal Bianco, Andrea & Cembalo, Luigi, 2016. "Private vs. Collective Wine Reputation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(3), pages 1-20, August.
    9. Corsi, Alessandro & Strøm, Steinar, 2013. "The Price Premium for Organic Wines: Estimating a Hedonic Farm-Gate Price Equation," Journal of Wine Economics, Cambridge University Press, vol. 8(1), pages 29-48, May.
    10. A. Golan & H. Shalit, 1993. "Wine Quality Differentials In Hedonic Grape Pricing," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(2), pages 311-321, May.
    11. Oczkowski, Edward, 2016. "Hedonic wine price functions with different prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 60(2), April.
    12. Lecocq, Sébastien & Visser, Michael, 2006. "What Determines Wine Prices: Objective vs. Sensory Characteristics," Journal of Wine Economics, Cambridge University Press, vol. 1(1), pages 42-56, April.
    13. João Rebelo & Lina Lourenço-Gomes & Tânia Gonçalves & José Caldas, 2019. "A hedonic price analysis for the Portuguese wine market: Does the distribution channel matter?," Journal of Applied Economics, Taylor & Francis Journals, vol. 22(1), pages 40-59, January.
    14. H. S. Houthakker, 1952. "Compensated Changes in Quantities and Qualities Consumed," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 19(3), pages 155-164.
    15. Danielle E. Rabkin & Timothy K.M. Beatty, 2007. "Does VQA Certification Matter? A Hedonic Analysis," Canadian Public Policy, University of Toronto Press, vol. 33(3), pages 299-314, September.
    16. Cardebat, Jean-Marie & Figuet, Jean-Marc & Paroissien, Emmanuel, 2014. "Expert Opinion and Bordeaux Wine Prices: An Attempt to Correct Biases in Subjective Judgments," Journal of Wine Economics, Cambridge University Press, vol. 9(3), pages 282-303, December.
    17. Danielle Wood & Kym Anderson, 2019. "What Determines the Future Value of an Icon Wine? New Evidence from Australia," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 11, pages 255-282, World Scientific Publishing Co. Pte. Ltd..
    18. Luigi Benfratello & Massimiliano Piacenza & Stefano Sacchetto, 2009. "Taste or reputation: what drives market prices in the wine industry? Estimation of a hedonic model for Italian premium wines," Applied Economics, Taylor & Francis Journals, vol. 41(17), pages 2197-2209.
    19. Senhui He & Jeffrey Jordan & Krishna Paudel, 2008. "Economic evaluation of bottled water consumption as an averting means: evidence from a hedonic price analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 15(5), pages 337-342.
    20. Edward Oczkowski, 2019. "The relation between Australian wine show results and prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(3), pages 389-411, July.
    21. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    22. 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.
    23. Saens, Rodrigo & Berríos, Rodrigo, 2012. "The country brand trap," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    24. Jean-Marie Cardebat & Jean-Marc Figuet, 2004. "What explains Bordeaux wine prices?," Applied Economics Letters, Taylor & Francis Journals, vol. 11(5), pages 293-296.
    25. Antonino Galati & Maria Crescimanno & Salvatore Tinervia, 2017. "Italian red wine in the Japanese market: a hedonic price analysis," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 19(6), pages 760-770.
    26. Edward Oczkowski & Hristos Doucouliagos, 2015. "Wine Prices and Quality Ratings: A Meta-regression Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 103-121.
    27. Schamel, Günter, 2009. "Dynamic Analysis of Brand and Regional Reputation: The Case of Wine," Journal of Wine Economics, Cambridge University Press, vol. 4(1), pages 62-80, April.
    28. Gonzalez, Jose & Melo, Oscar, 2008. "Uso de modelos hedónicos y de búsqueda para el análisis de precios de vinos en supermercados," Economi­a Agraria (Revista Economia Agraria), Agrarian Economist Association (AEA), Chile, vol. 12, pages 1-14.
    29. Edward Oczkowski, 2001. "Hedonic Wine Price Functions and Measurement Error," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 374-382, December.
    30. Dmitry Sharapov & Paul Kattuman & Diego Rodriguez & F. Javier Velazquez, 2021. "Using the SHAPLEY value approach to variance decomposition in strategy research: Diversification, internationalization, and corporate group effects on affiliate profitability," Strategic Management Journal, Wiley Blackwell, vol. 42(3), pages 608-623, March.
    31. Masset, Philippe & Weisskopf, Jean-Philippe & Faye, Benoît & Le Fur, Eric, 2016. "Red obsession: The ascent of fine wine in China," Emerging Markets Review, Elsevier, vol. 29(C), pages 200-225.
    32. Eric Le Fur & Jean-François Outreville, 2021. "Hedonic approach to the determinants of the price of cider," Applied Economics Letters, Taylor & Francis Journals, vol. 28(19), pages 1712-1716, November.
    33. Marco Costanigro & Jill J. McCluskey & Christopher Goemans, 2010. "The Economics of Nested Names: Name Specificity, Reputations, and Price Premia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(5), pages 1339-1350.
    34. Wieczorek Łukasz & Czupryna Marcin, 2021. "What Drives the Development of Craft Beer Production in Poland - Insights from a Hedonic Regression Analysis of the Polish Beer Market," Eastern European Economics, Taylor & Francis Journals, vol. 59(6), pages 597-610, November.
    35. Nerlove, Marc, 1995. "Hedonic price functions and the measurement of preferences: The case of Swedish wine consumers," European Economic Review, Elsevier, vol. 39(9), pages 1697-1716, December.
    36. Antonis Michis & Anna Markidou, 2013. "Determinants of retail wine prices: evidence from Cyprus," Empirical Economics, Springer, vol. 45(1), pages 267-280, August.
    37. Marco Costanigro & Jill J. McCluskey & Ron C. Mittelhammer, 2007. "Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 454-466, September.
    38. Günter Schamel, 2006. "Geography versus brands in a global wine market," Agribusiness, John Wiley & Sons, Ltd., vol. 22(3), pages 363-374.
    39. Fiona M. Scott Morton & Joel M. Podolny, 2002. "Love or Money? The Effects of Owner Motivation in the California Wine Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 50(4), pages 431-456, December.
    40. James Fogarty, 2008. "THE ECONOMICS OF WINE: PRICING, QUALITY AND RATE OF RETURN: Part 3 Expert Opinion, Reputation, and the Price of Wine," Economics Discussion / Working Papers 08-07, The University of Western Australia, Department of Economics.
    41. 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.
    42. Orley Ashenfelter & Karl Storchmann, 2010. "Measuring the Economic Effect of Global Warming on Viticulture Using Auction, Retail, and Wholesale Prices," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 37(1), pages 51-64, August.
    43. Combris, Pierre & Lecocq, Sebastien & Visser, Michael, 1997. "Estimation for a Hedonic Price Equation for Bordeaux Wine: Does Quality Matter?," Economic Journal, Royal Economic Society, vol. 107(441), pages 390-402, March.
    44. Ashenfelter, Orley & Jones, Gregory V., 2013. "The Demand for Expert Opinion: Bordeaux Wine," Journal of Wine Economics, Cambridge University Press, vol. 8(3), pages 285-293, December.
    45. David Moroz & Bruno Pecchioli, 2021. "Transaction price vs. ask price in hedonic regressions: evidence from the vintage scotch whisky market," Applied Economics Letters, Taylor & Francis Journals, vol. 28(2), pages 129-132, January.
    46. Stuart Landon & Constance E. Smith, 1998. "Quality Expectations, Reputation, and Price," Southern Economic Journal, John Wiley & Sons, vol. 64(3), pages 628-647, January.
    47. Schamel, Guenter, 2003. "A Hedonic Pricing Model for German Wine," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 52(05), pages 1-8.
    48. Richard Carew & Wojciech J. Florkowski, 2010. "The Importance of Geographic Wine Appellations: Hedonic Pricing of Burgundy Wines in the British Columbia Wine Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 93-108, March.
    49. Lester M. K. Kwong & Don Cyr & Joseph Kushner & Tomson Ogwang, 2011. "A Semiparametric Hedonic Pricing Model of Ontario Wines," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 59(3), pages 361-381, September.
    50. Oczkowski, Edward, 2019. "The relation between Australian wine show results and prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 60(2), July.
    51. Faye, Benoît & Le Fur, Eric, 2019. "On the Constancy of Hedonic Wine Price Coefficients over Time," Journal of Wine Economics, Cambridge University Press, vol. 14(2), pages 182-207, May.
    52. Steven B. Caudill & Franklin G. Mixon, 2016. "Estimating class-specific parametric models using finite mixtures: an application to a hedonic model of wine prices," Journal of Applied Statistics, Taylor & Francis Journals, vol. 43(7), pages 1253-1261, July.
    53. Paolo Roma & Giuseppe Di Martino & Giovanni Perrone, 2013. "What to show on the wine labels: a hedonic analysis of price drivers of Sicilian wines," Applied Economics, Taylor & Francis Journals, vol. 45(19), pages 2765-2778, July.
    54. Jean-Marie Cardebat & Jean-Marc Figuet, 2009. "Estimation of a hedonic price equation for Alsace, Beaujolais and Provence wines," Applied Economics Letters, Taylor & Francis Journals, vol. 16(9), pages 921-927.
    55. Lester M. K. Kwong & Tomson Ogwang & Ling Sun, 2017. "Semiparametric versus parametric hedonic wine price models: an empirical investigation," Applied Economics Letters, Taylor & Francis Journals, vol. 24(13), pages 897-901, July.
    56. Bodo Steiner, 2004. "French Wines on the Decline? Econometric Evidence from Britain," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(2), pages 267-288, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Catherine Haeck & Giulia Meloni & Johan Swinnen, 2019. "The Value of Terroir: A Historical Analysis of the Bordeaux and Champagne Geographical Indications," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(4), pages 598-619, December.
    2. Dieter Pennerstorfer & Christoph Weiss & Andreas Huber, 2019. "Experts, Reputation and Umbrella Effects: Empirical Evidence from Wine Prices," Economics working papers 2019-08, Department of Economics, Johannes Kepler University Linz, Austria.
    3. Edward Oczkowski, 2016. "Analysing Firm-level Price Effects for Differentiated Products: The Case of Australian Wine Producers," Australian Economic Papers, Wiley Blackwell, vol. 55(1), pages 43-62, March.
    4. Caracciolo, Francesco & D’Amico, Mario & Di Vita, Giuseppe & Pomarici, Eugenio & Dal Bianco, Andrea & Cembalo, Luigi, 2016. "Private vs. Collective Wine Reputation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(3), pages 1-20, August.
    5. Antonis Michis & Anna Markidou, 2013. "Determinants of retail wine prices: evidence from Cyprus," Empirical Economics, Springer, vol. 45(1), pages 267-280, August.
    6. García Arancibia, Rodrigo & Rossini, Gustavo & Depetris Guiguet, Edith, 2015. "Wine Label Descriptors and Shelf Price Paid by Argentine Consumers," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 16(2), pages 1-17.
    7. Vincent Hoang & Takao Iida & Shigeru Matsumoto & Natsuki Watanabe & Clevo Wilson, 2014. "Market penetration of imported agricultural products: A hedonic analysis of the Japanese table wine market," Working Papers e083, Tokyo Center for Economic Research.
    8. Vincent Hoang & Takao Iida & Shigeru Matsumoto & Natsuki Watanabe & Clevo Wilson, 2016. "Consumer’s comparison between local and imported organic products: a hedonic analysis of the Japanese table wine market," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(3), pages 405-415, December.
    9. Richard Carew & Wojciech J. Florkowski, 2010. "The Importance of Geographic Wine Appellations: Hedonic Pricing of Burgundy Wines in the British Columbia Wine Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 93-108, March.
    10. Sanja Lutzeyer, 2008. "Estimating Hedonic Prices for Stellenbosch wine," Working Papers 15/2008, Stellenbosch University, Department of Economics.
    11. Carew, Richard C. & Florkowski, Wojciech J. & Meng, Ting, 2016. "Segmenting Wine Market: California Red and White Wine Retail Prices in British Columbia," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235253, Agricultural and Applied Economics Association.
    12. Peter Gal & Attila Jambor, 2020. "Geographical Indications as Factors of Market Value: Price Premiums and Their Drivers in the Hungarian Off-Trade Wine Market," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(2), June.
    13. Menival, David & Charters, Steve, 2014. "The impact of geographic reputation on the value created in Champagne," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(2), April.
    14. Pecchioli, Bruno & Moroz, David, 2023. "Do geographical appellations provide useful quality signals? The case of Scotch single malt whiskies," Economic Modelling, Elsevier, vol. 124(C).
    15. Chen, Kuan-Ju & McCluskey, Jill J., 2018. "Impacts of Expert Information on Prices for an Experience Good across Product Segments: Tasting Notes andWine Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(3), September.
    16. Corsi, Alessandro & Strøm, Steinar, 2013. "The Price Premium for Organic Wines: Estimating a Hedonic Farm-Gate Price Equation," Journal of Wine Economics, Cambridge University Press, vol. 8(1), pages 29-48, May.
    17. Schamel, Guenter, 2002. "California Wine Winners: A Hedonic Analysis Of Regional And Winery Reputation Indicators," 2002 Annual meeting, July 28-31, Long Beach, CA 19864, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Swinnen, J. & Meloni, G. & Haeck, C., 2018. "What is the Value of Terroir? Historical Evidence from Champagne and Bordeaux," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277221, International Association of Agricultural Economists.
    19. Ricardo Sellers†Rubio & Francisco Mas†Ruiz & Franco Sancho†Esper, 2018. "Firm reputation, advertising investment, and price premium: The role of collective brand membership in high†quality wines," Agribusiness, John Wiley & Sons, Ltd., vol. 34(2), pages 351-362, March.
    20. Guenter Schamel & Anna Ros, 2021. "Indicators of Individual Wine Reputation for Friuli Venezia Giulia," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 7(2), pages 323-339, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:agecon:v:55:y:2024:i:2:p:247-264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.