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Determinants of retail wine prices: evidence from Cyprus

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  • Antonis Michis

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  • Anna Markidou

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Abstract

This study uses a detailed panel dataset for the Cyprus wine market and a fixed effects simultaneous equations model specification to investigate retail wine price determinants. Our results show that producers’ pricing policies tend to be influenced more by the level of market concentration in the wine and retail industries than by competitors’ price movements. We propose a sales response model to identify the impact of marketing drivers on sales. Wine consumption in Cyprus is unit elastic, but the impact of competitive prices and retail distribution coverage on sales is small. Copyright Springer-Verlag 2013

Suggested Citation

  • Antonis Michis & Anna Markidou, 2013. "Determinants of retail wine prices: evidence from Cyprus," Empirical Economics, Springer, vol. 45(1), pages 267-280, August.
  • Handle: RePEc:spr:empeco:v:45:y:2013:i:1:p:267-280
    DOI: 10.1007/s00181-012-0616-y
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    References listed on IDEAS

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    Cited by:

    1. Palma, David & Ortúzar, Juan de Dios & Rizzi, Luis Ignacio & Guevara, Cristian Angelo & Casaubon, Gerard & Ma, Huiqin, 2016. "Modelling choice when price is a cue for quality: a case study with Chinese consumers," Journal of choice modelling, Elsevier, vol. 19(C), pages 24-39.

    More about this item

    Keywords

    Wine; Nonlinear pricing; Market concentration; Fixed effects; L66; L11;

    JEL classification:

    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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