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Determinants of retail wine prices: evidence from Cyprus

Author

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  • Antonis Michis
  • Anna Markidou

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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    More about this item

    Keywords

    Wine; Nonlinear pricing; Market concentration; Fixed effects; L66; L11;
    All these keywords.

    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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