Assessing the Value of Quality in the Italian Wine Market

Abstract

The paper aims at: i) understanding to what extent wine experts’ evaluations are influenced by different quality clues ii) assessing the role and effectiveness of different quality clues in the creation of price. To meet these goals we set two independent equations. The first -estimated via an ordered logit- explaining the score obtained by each wine with a bunch of attributes of the wine and of its production process. The second equation is a hedonic price model –estimated via an interval regression- where price is a function of a large number quality clues. The analysis covers 2,523 wines from three Italian Regions as reviewed by Veronelli guide. Results indicates that: i) few attributes seems to systematically impact experts’ judgments; ii) many quality clues are associated with significant price premiums; iii) in some cases consumers give value to quality clues along with experts while in other cases there is no alignment.