Published in Journal of Agribusiness, Volume 29, Issue 1, Spring April 1, 2011, pages 105-126.
The price of wine represents various characteristics that differentiate each bottle, assuming that the majority of consumers use price as a signal of quality. The objective of this study is to analyze the drivers of Riesling prices, since this varietal continues to gain popularity and can be grown in all climates, including cool-climate regions. We expand the use of quality ratings by including interaction terms to express wine-quality and price-quality relationships. The results suggest that higher price premiums are associated with wines that earned high expert rating scores, and this emphasizes the importance of market-perceived quality signals.
Agribusiness | Agricultural and Resource Economics | Business