Abstract
The choice of a bottle of wine is affected by the presence of attributes that are searched by consumers and can be evaluated before the purchase. The aim of the paper is to analyze the effect of some search attributes on wine price variability applying the Hedonic Price Model. It allows explaining how the price of wine varies depending on its main quality attributes. The analysis has been based on a sample of wines made in Puglia, Italian region characterized by a tradition in wine production and consumption. Data have been collected from a wine guidebook considering the years 2008–2013. The study provided a measure of the market value of some search attributes for wines produced in Puglia. Attributes as alcoholic content, age and score given by experts, influence price variability allowing wines to obtain a premium price, such as the most known Protected Designation of Origin (PDO) and some Protected Geographical Indication (PGI). The name of the variety seems not to have high influence with the exception of less known and locally grown varieties. Results may be of interest for marketers and policy makers of wine industry. Managerial implications could refer to the importance of differentiation strategies aimed to market segmentation and to the pricing strategy. Policymakers could also find interesting hints about the influence of the different appellations and the importance of minor autochthonous grape varieties.
Highlights
Wine is a highly differentiated product made from grapes of different varieties grown under various pedoclimatic conditions which change a lot across geographical areas and years
Estimation results of the hedonic price Equation using the method of Ordinary Least Square (OLS) are summarized in Table 3, which includes the most important performance indicators of the empirical model
Consumers can look for wines that satisfy their own preferences for characteristics as colour, alcohol content, variety, age, area of production and sensory characteristics
Summary
Wine is a highly differentiated product made from grapes of different varieties grown under various pedoclimatic conditions which change a lot across geographical areas and years. This wide heterogeneity is reflected on the wine price that, such as for other products, is associated with the quality as perceived by consumers. The aim of this work is to analyze and quantify the effects that search attributes of wine such as color, alcoholic content, variety, age, area of production and sensory characteristics, can have on price. For this purpose, a “hedonic price model” has been estimated. Statistical analysis helps to measure consumers’ evaluations of the different product attributes
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