How Product Attributes and Consumer Characteristics Influence the WTP, Resulting in a Higher Price Premium for Organic Wine

Abstract

Sustainable production systems have become a relevant issue for consumers in the wine industry. Several studies have revealed that consumers are increasingly interested in organic wine and have attempted to estimate the price premium that consumers would have to pay for this ‘new’ product. The aim of this paper is to assess the role of organic attributes in driving consumer choice, and how consumer socio-demographic characteristics influence the price premium for organic wine. An on-line survey was administrated among Italian wine consumers (N = 317) and an ordinal logistic regression model, based on cumulative probability distribution, was estimated. The results show important differences in the Willingness to Pay (WTP) between different market segments. Younger people have a more positive attitude towards wine with sustainable characteristics, and we found that consumers aged under 50 have a higher WTP. Price is another attribute that affects preferences for organic wine: consumers that state that price is a very important factor in the choice of a bottle are less willing to pay for organic wine. Consumers characterized by a low consumption frequency have a higher WTP for organic wine.