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Products with multiple certifications: insights from the US wine market

Author

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  • Megan E. Waldrop
  • Jill J. McCluskey
  • Ron C. Mittelhammer

Abstract

We present a product-differentiation model to analyse markets in which products may have multiple environmental and sustainability claims. We estimate hedonic price functions for California and Washington wines to quantify the implicit prices consumers are willing to pay for organic, sustainable, fish friendly and biodynamic-produced wines. We distinguish between the effects of self-claiming versus certification, in addition to assessing the returns to multiple certifications. For the most part, the different certifications have statistically different premiums. In some instances, the certified characteristic commands a lesser premium compared to the corresponding self-claimed characteristic. Having multiple certifications results in diminishing returns for the additional certification.

Suggested Citation

  • Megan E. Waldrop & Jill J. McCluskey & Ron C. Mittelhammer, 2017. "Products with multiple certifications: insights from the US wine market," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(4), pages 658-682.
    • Handle: RePEc:oup:erevae:v:44:y:2017:i:4:p:658-682.
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    2. Lin Bai & Zhanguo Zhu & Tong Zhang, 2021. "How to Improve Food Quality in the Domestic Market: The Role of “Same Line Same Standard Same Quality”—Evidence from a Consumer Choice Experiment in China," Sustainability, MDPI, vol. 13(10), pages 1-16, May.
    3. Alessandro Bonanno & Francesco Bimbo & Marco Costanigro & Alfons Oude Lansink & Rosaria Viscecchia, 2019. "Credence attributes and the quest for a higher price – a hedonic stochastic frontier approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(2), pages 163-192.
    4. Nadia A Streletskaya & Jura Liaukonyte & Harry M Kaiser, 2019. "Absence labels: How does information about production practices impact consumer demand?," PLOS ONE, Public Library of Science, vol. 14(6), pages 1-18, June.
    5. Jacqmin, Julien & Lefebvre, Mathieu, 2021. "The effect of international accreditations on students’ revealed preferences: Evidence from French Business schools," Economics of Education Review, Elsevier, vol. 85(C).
    6. 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.
    7. Markova-Nenova, Nonka & Wätzold, Frank, 2018. "Fair to the cow or fair to the farmer? The preferences of conventional milk buyers for ethical attributes of milk," Land Use Policy, Elsevier, vol. 79(C), pages 223-239.
    8. Li, Tongzhe & McCluskey, Jill J. & Messer, Kent D., 2018. "Ignorance Is Bliss? Experimental Evidence on Wine Produced from Grapes Irrigated with Recycled Water," Ecological Economics, Elsevier, vol. 153(C), pages 100-110.
    9. Bonanno, Alessandro & Bimbo, Francesco & Costanigro, Marco & VIscecchia, Rosaria, 2018. "Do Geographic Indication Labels Pay off? Estimating GI’s implicit Price Dispersion in the Italian EVOO Market," 2018 Annual Meeting, August 5-7, Washington, D.C. 274203, Agricultural and Applied Economics Association.
    10. Markova-Nenova, Nonka & Wätzold, Frank, 2017. "Fairness to dairy cows or fairness to farmers: What counts more in the preferences of conventional milk buyers for ethical attributes of milk?," MPRA Paper 83066, University Library of Munich, Germany.
    11. Matthias Staudigel & Aleksej Trubnikov, 2022. "High price premiums as barriers to organic meat demand? A hedonic analysis considering species, cut and retail outlet," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(2), pages 309-334, April.

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    More about this item

    Keywords

    sustainability; biodynamic; organic; salmon safe; fish friendly;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q59 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Other

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