Hedonic analysis of the Slovenian wine market
DOI:
https://doi.org/10.55707/eb.v10i2.131Keywords:
wine market, hedonic analysis, market segmentation, SloveniaAbstract
The wine market in Slovenia reveals some interesting facts about the pattern of international trade in differentiated products. In the article, we look at a large sample of domestic and foreign wines sold in Slovenian supermarkets and specialist wine shops in 2009. We capture wine quality through a special database of wine quality assessments based on sensory sommelier analysis. In our sample, imported wine is on average more expensive and of better quality than domestic wine. Even taking quality into account, foreign wine is more expensive than domestic wine. In addition, higher quality wines are sold at higher prices, and quality-adjusted prices increase with quality. The empirical analysis includes data at the product, producer and country level, and applies a hedonic price function for the whole market and predefined market segments. The analysis shows that several attributes are important in explaining the deviations from average wine prices, i.e., quality, vintage, ageing potential, wine type, as well as several characteristics of the country of origin, such as distance, production costs and market size. Wine prices increase with the distance of the exporting country and the production costs, and decrease with the size of the market.
References
Ali, H. H. in C. Nauges (2007, 02). The pricing of experience goods: The example of en primeur wine. American Journal of Agricultural Economics 89 (1), 91-103. https://doi.org/10.1111/j.1467-8276.2007.00965.x
Angulo, A. M., J. M. Gil, A. Gracia, in M. Sanchez (2000). Hedonic prices for spanish red quality wine. British Food Journal 102 (7), 481-493. https://doi.org/10.1108/00070700010336445
3. Benfratello, L., M. Piacenza, in S. Sacchetto (2009). Taste or reputation: what drives market prices in the wine industry? estimation of a hedonic model for Italian premium wines. Applied Economics 41 (17), 2197-2209. https://doi.org/10.1080/00036840701222439
Cardebat, J.-M. in J.-M. Figuet (2004, April). What explains Bordeaux wine prices? Applied Economics Letters 11 (5), 293-296. https://doi.org/10.1080/1350485042000221544
Cardebat, J.-M. in J.-M. Figuet (2009). Estimation of a hedonic price equation for Alsace, Beaujolais in Provence wines. Applied Economics Letters 16 (9), 921-927. https://doi.org/10.1080/13504850701222145
Caracciolo, F. in Furno, M. (2020). Hedonic Functions, Heterogeneous Consumers, in Wine Market Segmentation, Journal of Agricultural in Resource Economics, Vol. 45(2).
Combris, P., S. Lecocq, in M. Visser (1997, March). Estimation for a hedonic price equation for Bordeaux wine: Does quality matter? Economic Journal 107 (441), 390-402. https://doi.org/10.1111/j.0013-0133.1997.165.x
Combris, P., S. Lecocq, in M. Visser (2000, June). Estimation of a hedonic price equation for burgundy wine. Applied Economics 32 (8), 961-67. https://doi.org/10.1080/000368400322011
Costanigro, M., J. J. McCluskey, in R. C. Mittelhammer (2007, 09). Segmenting the wine market based on price: Hedonic regression when different prices mean different products. Journal of Agricultural Economics 58 (3), 454-466. https://doi.org/10.1111/j.1477-9552.2007.00118.x
European Commission (2008a). Tous vins - rubique: Consommation humaine. Technical report, European Commission, European Communities.
European Commission (2008b). Wine sector, trade. Technical report, European Commission, European Communities.
Eurostat (2008). Agricultural statistics, main results - 2006-2007. Technical report, Eurostat, European Communities.
Eurostat (2009). Wine, production - [tag00034]. Technical report, Eurostat, European Communities.
Hafner, C. M. (2023). Explanatory factors of French retail wine prices, Applied Economics Letters, Early Access . https://doi.org/10.1080/13504851.2023.2266565
Johnson, H. (1985). The world atlas of wine: a complete guide to the wines in spirits of the world / Hugh Johnson (3rd ed., enl. and completely rev. ed.). RD Press, Surry Hills, N.S.W. :
Jones, G. V. in K.-H. Storchmann (2001, November). Wine market prices and investment under uncertainty: an econometric model for Bordeaux crus classes. Agricultural Economics 26 (2), 115-133. https://doi.org/10.1111/j.1574-0862.2001.tb00058.
Landon, S. and C. Smith (1997, March). The use of quality and reputation indicators by consumers: The case of Bordeaux wine. MPRA Paper 9283, University Library of Munich, Germany. https://doi.org/10.1023/A:1006830218392
Landon, S. in C. Smith (1998). Quality expectations, reputation, and price. Technical Report 3. https://doi.org/10.2307/1060783
Lecocqa, S. in M. Visserb (2006). What determines wine prices: Objective vs. sensory characteristics. Journal of Wine Economics 1 (1), 42-56. https://doi.org/10.1017/S1931436100000080
Ministrstvo za kmetijstvo, gozdarstvo in prehrano (2009). Analiza stanja in razvonjih moznosti po posameznih proizvodnih usmeritvah in politikah. Tehnično poročilo, Ministrstvo za kmetijstvo, gozdarstvo in prehrano.
Ministrstvo za kmetijstvo, gozdarstvo in prehrano (2009a). Porocilo o stanju kmetijstva, živilstva in gozdarstva v letu 2006, Statistične priloge. Tehnično poročilo, Ministrstvo za kmetijstvo, gozdarstvo in prehrano.
Ministrstvo za kmetijstvo, gozdarstvo in prehrano (2009b). Vinogradniške in vinarske razmere v Sloveniji. Tehnično poročilo, Ministrstvo za kmetijstvo, gozdarstvo in prehrano.
Ministrstvo za kmetijstvo, gozdarstvo in prehrano (2010). Vino, vinogradništvo in vinarstvo. http://www.mkgp.gov.si/si/o_ministrstvu/direktorati/direktorat_za_kmetijstvo/starasektor_za_kmetijske_trge/vino/.
Oczkowski, E. (1994, April). A hedonic price function for australian premium table wine. Australian Journal of Agricultural Economics 38 (01). https://doi.org/10.1111/j.1467-8489.1994.tb00721.x
Robinson, J. (1999). The Oxford companion to wine / edited by Jancis Robinson (2nd ed. ed.). Oxford University Press, Oxford.
Rosen, S. (1974, Jan.-Feb.). Hedonic prices and implicit markets: Product differentiation in pure competition. Journal of Political Economy 82 (1), 34-55. https://doi.org/10.1086/260169
Schamel, G. in K. Anderson (2003, 09). Wine quality and varietal, regional and winery reputations: Hedonic prices for Australia and New Zealand. The Economic Record 79 (246), 357-369. https://doi.org/10.1111/1475-4932.00109
Sršen, T. in Gaberšek, B. (2010): Slovenski vinski vodnik 2010. Bukla
Steiner, B. (2004). French wines on the decline? econometric evidence from britain. Journal of Agricultural Economics 55 (2), 267-288. https://doi.org/10.1111/j.1477-9552.2004.tb00096.x
Thrane, C. (2004). In defence of the price hedonic model in wine research. Journal of Wine Research 15 (2), 123-134. https://doi.org/10.1080/09571260500053608
Thrane, C. (2009). Explaining variation in wine prices: the battle between objective and sensory attributes revisited. Applied Economics Letters 16 (13), 1383-1386. https://doi.org/10.1080/13504850701466056
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Aljaz Kuncic
This work is licensed under a Creative Commons Attribution 4.0 International License.
