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Analysis of consumer preferences for information and expert opinion using a discrete choice experiment

Author

Listed:
  • Tiago Ribeiro

    (Institute for Choice - University of South Australia Business School
    Indera - Estudos Economicos, Lda)

  • Armando Corsi

    (University of South Australia)

  • Larry Lockshin

    (University of South Australia)

  • Jordan Louviere

    (University of South Australia Business School)

  • Simone Mueller Loose

    (University of South Australia
    Geisenheim University)

Abstract

We present a study of consumer preferences for information in wine purchases. Consumers are presented with extra information in the form of qualitative product descriptions and quantitative expert ratings. We implement a discrete choice experiment in which we vary experimentally the presence of the descriptions and ratings and the values of the ratings themselves. Respondents are asked to choose amongst a set of 5 wine bottles in a sequence of 21 choice scenarios. We find that the presence of extra information and high expert ratings have a significant impact on the willingness to pay for a given wine. The dispersion of ratings for a given wine does not affect respondents’ choices. In our estimates high average ratings by experts carry a premium of AUD $10.

Suggested Citation

  • Tiago Ribeiro & Armando Corsi & Larry Lockshin & Jordan Louviere & Simone Mueller Loose, 2020. "Analysis of consumer preferences for information and expert opinion using a discrete choice experiment," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 19(1), pages 67-80, January.
    • Handle: RePEc:spr:portec:v:19:y:2020:i:1:d:10.1007_s10258-019-00154-3
    DOI: 10.1007/s10258-019-00154-3
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    References listed on IDEAS

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    1. Dubois, Pierre & Nauges, Céline, 2010. "Identifying the effect of unobserved quality and expert reviews in the pricing of experience goods: Empirical application on Bordeaux wine," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 205-212, May.
    2. Ali, Héla Hadj & Lecocq, Sébastien & Visser, Michael, 2010. "The Impact of Gurus: Parker Grades and en primeur Wine Prices," Journal of Wine Economics, Cambridge University Press, vol. 5(1), pages 22-39, April.
    3. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
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    6. Palma, David & Dios Ortuzar, Juan de & Casaubon, Gerard & Rizzi, Luis I. & Agosin, Eduardo, 2013. "Measuring consumer preferences using hybrid discrete choice models," Working Papers 164855, American Association of Wine Economists.
    7. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, September.
    8. Paul E. Green & Abba M. Krieger & Yoram Wind, 2001. "Thirty Years of Conjoint Analysis: Reflections and Prospects," Interfaces, INFORMS, vol. 31(3_supplem), pages 56-73, June.
    9. Richard Friberg & Erik Grönqvist, 2012. "Do Expert Reviews Affect the Demand for Wine?," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 193-211, January.
    10. 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.
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    Cited by:

    1. Gonçalves, Tânia & Lourenço-Gomes, Lina & Pinto, Lígia M. Costa, 2020. "Dealing with ignored attributes through an inferred approach in wine choice experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 87(C).
    2. Jo�o Rebelo & Ra�l Comp�s & Samuel Faria & T�nia Gon�alves & Vicente Pinilla & Katrin Sim�n-Elorz, 2021. "Wine consumption frequency during lockdown in the Iberian markets," Documentos de Trabajo dt2021-02, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    3. Rebelo, João & Compés, Raúl & Faria, Samuel & Gonçalves, Tânia & Pinilla, Vicente & Simón-Elorz, Katrin, 2021. "Covid-19 Lockdown and Wine Consumption Frequency in Portugal and Spain," Working Papers 321853, American Association of Wine Economists.

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