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How do consumers use signals to assess quality?

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  • Gergaud, Olivier
  • Livat, Florine

Abstract

This article analyzes the way some 6,000 European wine consumers, both connoisseurs and non-connoisseurs, use a set of available signals (price, umbrella branding, goodwill, past consumption) to assess the quality of Bordeaux wines where price is the main source of information on quality. Connoisseurs use this signal less intensively than on connoisseurs. Price represents a substitute for umbrella branding where consumers are not aware of who is beneath this umbrella, and where this signal is thus of no help to them. This could explain why such wines tend nowadays to lose market share in favor of branded wines that are easier to evaluate.

Suggested Citation

  • Gergaud, Olivier & Livat, Florine, 2007. "How do consumers use signals to assess quality?," Working Papers 37296, American Association of Wine Economists.
  • Handle: RePEc:ags:aawewp:37296
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    File URL: http://purl.umn.edu/37296
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    References listed on IDEAS

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    Cited by:

    1. Alfredo R. Paloyo, 2009. "Co-pay and Feel Okay: Evidence of Illusory Health Gains from a Health Insurance Reform," Ruhr Economic Papers 0142, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    2. repec:zbw:rwirep:0142 is not listed on IDEAS
    3. Paloyo, Alfredo R., 2009. "Co-pay and Feel Okay: Evidence of Illusory Health Gains from a Health Insurance Reform," Ruhr Economic Papers 142, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Zander, Katrin & Janssen, Meike, 2012. "Präferenzen Deutscher Öko-Konsumenten Für Wein," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137175, German Association of Agricultural Economists (GEWISOLA).
    5. Resano, Helena & Sanjuán, Ana I. & Albisu, Luis M., 2012. "Consumers’ response to the EU Quality policy allowing for heterogeneous preferences," Food Policy, Elsevier, vol. 37(4), pages 355-365.

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