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Explaining champagne prices in Scandinavia - what is the best predictor?

Author

Listed:
  • Bentzen, Jan

    () (Department of Economics, Aarhus School of Business)

  • Smith, Valdemar

    () (Department of Economics, Aarhus School of Business)

Abstract

This paper analyses the retail prices of champagnes sold in the Scandinavian countries. Price data for the champagnes contain nearly 380 observations including a range of quality attributes of each champagne. The empirical part of the analysis reveals that the retail prices of champagne can be fairly well explained by a hedonic price function with a degree of explanation corresponding to approximately 60 per cent. However the ratings by the wine experts, in this case Robert Parker, Wine Spectator and to a lesser extent the French ‘1855 Notation’, do just as well in terms of explaining the retail prices of champagnes. Especially the rating of champagnes by Robert Parker seems to be the most influential concerning the sales prices.

Suggested Citation

  • Bentzen, Jan & Smith, Valdemar, 2007. "Explaining champagne prices in Scandinavia - what is the best predictor?," Working Papers 07-7, University of Aarhus, Aarhus School of Business, Department of Economics.
  • Handle: RePEc:hhs:aareco:2007_007
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    File URL: http://www.hha.dk/nat/wper/07-7_jbvs.pdf
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    References listed on IDEAS

    as
    1. Oczkowski, Edward, 2001. "Hedonic Wine Price Functions and Measurement Error," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 374-382, December.
    2. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Champagne; prices; hedonic price function; Scandinavia;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • P46 - Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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