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The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation

  • Corsi, Alessandro

    ()

    (Università di Torino, Department of Economics)

  • Strøm, Steinar

    ()

    (Dept. of Economics, University of Oslo)

Organic wines are increasingly produced and appreciated. Since organic production is more costly, a crucial question is whether they benefit from a price premium. We estimate hedonic price functions for Piedmont organic and conventional wines. We use data on the production side in addition to variables of interest for consumers. Our results show that, along with characteristics of interest to consumers, some farm and producer characteristics not directly relevant for consumers do significantly affect wine prices. We find that organic wine tends to obtain higher prices than conventional wine. The price premium is not simply an addition to other price components, but organic quality modifies the impact of the other variables on price.

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File URL: https://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2013/memo-07-2013.pdf
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Paper provided by Oslo University, Department of Economics in its series Memorandum with number 07/2013.

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Length: 28 pages
Date of creation: 11 Mar 2013
Date of revision:
Publication status: Published as Corsi, Alessandro and Steinar Strøm, 'The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation' in Journal of Wine Economics, 2013, pages 29-48.
Handle: RePEc:hhs:osloec:2013_007
Contact details of provider: Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page: http://www.oekonomi.uio.no/indexe.html
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