Abstract
We present a product-differentiation model to analyse markets in which products may have multiple environmental and sustainability claims. We estimate hedonic price functions for California and Washington wines to quantify the implicit prices consumers are willing to pay for organic, sustainable, fish friendly and biodynamic-produced wines. We distinguish between the effects of self-claiming versus certification, in addition to assessing the returns to multiple certifications. For the most part, the different certifications have statistically different premiums. In some instances, the certified characteristic commands a lesser premium compared to the corresponding self-claimed characteristic. Having multiple certifications results in diminishing returns for the additional certification.
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