Towards a Differentiated Modelling of Origin Effects in Hedonic Analysis:An Application to Auction Prices of Specialty Coffee
Origin matters. This has been shown by numerous studies using either discrete choice or hedonic approaches to derive implicit prices for origin as a product attribute. In most of the hedonic studies, intercept dummies were introduced for specific regional origins and statistically significant coefficients of those variables were seen as an indication of either a superior or inferior reputation compared to products from other origins. We argue that hedonic pricing models of this type may be too simple to detect the true origin effects if assessments of a product’s sensory quality are available and interact with prior beliefs on reputation. Based on a supply-and-demand framework to explain auction prices, a reduced-form hedonic pricing model is suggested that includes intercept- as well as slope-dummy effects of the regional origin. As reputation and the objective product quality are particularly important on markets of differentiated, high-quality foods and beverages we analyze auction markets of specialty coffees. The findings for the Cup-of-Excellence data reveal that it is important to distinguish reputation, sensory quality and their interaction as determinants of coffee auction prices as well as varying origin impacts across market segments.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.iaae-agecon.org/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joachim Zietz & Emily N. Zietz & G. Stacy Sirmans., 2007.
"Determinants of House Prices: A Quantile Regression Approach,"
200706, Middle Tennessee State University, Department of Economics and Finance.
- Joachim Zietz & Emily Zietz & G. Sirmans, 2008. "Determinants of House Prices: A Quantile Regression Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 37(4), pages 317-333, November.
- Donnet, M. Laura & Weatherspoon, Dave D. & Hoehn, John P., 2007.
"Price Determinants in Top Quality E-Auctioned Specialty Coffees,"
9310, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- M. Laura Donnet & Dave D. Weatherspoon & John P. Hoehn, 2008. "Price determinants in top-quality e-auctioned specialty coffees," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 267-276, 05.
- Landon, Stuart & Smith, Constance, 1997. "The Use of Quality and Reputation Indicators by Consumers: The Case of Bordeaux Wine," MPRA Paper 9283, University Library of Munich, Germany.
- Teuber, Ramona, 2009. "CafÃ© de Marcala - Honduras' GI Approach to Achieving Reputation in the Coffee Market," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 10(1).
- Maria Luz Loureiro & Jill J. McCluskey, 2000. "Assessing consumer response to protected geographical identification labeling," Agribusiness, John Wiley & Sons, Ltd., vol. 16(3), pages 309-320.
- G¸nter Schamel & Kym Anderson, 2003. "Wine Quality and Varietal, Regional and Winery Reputations: Hedonic Prices for Australia and New Zealand," The Economic Record, The Economic Society of Australia, vol. 79(246), pages 357-369, 09.
- Jason A. Winfree & Jill J. McCluskey, 2005.
"Collective Reputation and Quality,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 87(1), pages 206-213.
- Marco Costanigro & Craig A. Bond & Jill J. McCluskey, 2012. "Reputation Leaders, Quality Laggards: Incentive Structure in Markets with Both Private and Collective Reputations," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(2), pages 245-264, 06.
- John W. Haeger & Karl Storchmann, 2006. "Prices of American Pinot Noir wines: climate, craftsmanship, critics," Agricultural Economics, International Association of Agricultural Economists, vol. 35(1), pages 67-78, 07.
- Teuber, Ramona, 2007.
"Geographical Indications of Origin as a Tool of Product Differentiation : The Case of Coffee,"
33, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
- Teuber, Ramona, 2007. "Geographical Indications of Origin as a Tool of Product Differentiation: The Case of Coffee," 105th Seminar, March 8-10, 2007, Bologna, Italy 7866, European Association of Agricultural Economists.
- Oberthür, Thomas & Läderach, Peter & Posada, Huver & Fisher, Myles J. & Samper, Luis F. & Illera, Julia & Collet, Laure & Moreno, Edgar & Alarcón, Rodrigo & Villegas, Andres & Usma, Herman & Perez, Ca, 2011. "Regional relationships between inherent coffee quality and growing environment for denomination of origin labels in Nariño and Cauca, Colombia," Food Policy, Elsevier, vol. 36(6), pages 783-794.
- Marco Costanigro & Jill J. McCluskey & Ron C. Mittelhammer, 2007. "Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(3), pages 454-466, 09.
- Menapace, Luisa & Moschini, GianCarlo, 2010. "Quality Certification by Geographical Indications, Trademarks and Firm Reputation," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61778, Agricultural and Applied Economics Association.
- Christer Thrane, 2009. "Explaining variation in wine prices: the battle between objective and sensory attributes revisited," Applied Economics Letters, Taylor & Francis Journals, vol. 16(13), pages 1383-1386.
- Marco Costanigro & Jill J. McCluskey & Christopher Goemans, 2010. "The Economics of Nested Names: Name Specificity, Reputations, and Price Premia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(5), pages 1339-1350.
When requesting a correction, please mention this item's handle: RePEc:ags:iaae12:126235. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.