Identifying the effect of unobserved quality and expert reviews in the pricing of experience goods: Empirical application on Bordeaux wine

Dubois, Pierre; Nauges, Celine

doi:10.1016/j.ijindorg.2009.08.003

Cited by 65 publications

(35 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Our results support recent findings in other contexts, such as Black (), Bayer et al. (), and Dubois and Nauges (), who show that more precise controls for unobserved variables dampen estimates of valuation for quality‐related attributes like appellation.…”

Section: Resultssupporting

confidence: 91%

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

Gustafson

Lybbert

Sumner

2016

Agricultural Economics

View full text Add to dashboard Cite

This article uses a novel experimental approach to measure consumer willingness to pay (WTP) for wine attributes. We invited customers of a local supermarket who had selected a bottle of wine to purchase to participate in a valuation experiment. Integrating their original wine choice into the experiment, each participant evaluated six alternative wines, generating a rich set of data on willingness to pay and consumer characteristics. The data from the experiment allow us to compare standard shelf price-based wine attribute valuation estimates with estimates using WTP data and an increasing amount of information about individual consumers. The full model employs individual fixed effects to estimate WTP parameters without bias from consumer sorting or supply side influences. Our WTP estimates for wine attributes differ markedly from previous attribute value estimates. Consumers in our sample display clear and stable preferences for wine varieties, but less clear preferences for appellations. Our results suggest caution is needed in using market prices to estimate parameters of the consumer valuation function for product attributes. JEL classifications: C93, D12, L66

show abstract

Section: Resultssupporting

confidence: 91%

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

Gustafson

Lybbert

Sumner

2016

Agricultural Economics

View full text Add to dashboard Cite

show abstract

“…In the tradition of Dubois and Nauges (2010) and Cardebat, Figuet, and Paroissien (2014), and unlike most previously employed hedonic estimates, the proposed model captures both these fundamental elements of objective and subjective quality in determining prices. We present a series of models to analyze and examine the framework advocated by Cardebat, Figuet, and Paroissien (2014): where P is the (log) price; Q is objective wine quality; S is the expert quality score; ε is the difference between the expert quality score S and objective quality Q and is referred to as the personal opinion of the expert by Cardebat, Figuet, and Paroissien (2014); x represents additional price-influencing regressors; w represents regressors that determine objective quality; ε and u are random error terms with and , with ε being the random error made by the expert in measuring Q , with cov( Q,ε ) = 0.…”

Section: Conceptual and Modeling Frameworkmentioning

confidence: 99%

“…More recently, Dubois and Nauges (2010) and Cardebat, Figuet, and Paroissien (2014) have attempted to recognize the direct impact of both objective and subjective quality on wine prices. In part, these studies seek to determine the relative importance of these two measures of quality on prices.…”

Section: Introductionmentioning

confidence: 99%

Identifying the Effects of Objective and Subjective Quality on Wine Prices

Oczkowski

2016

J Wine Econ

View full text Add to dashboard Cite

This study examines a framework developed by Cardebat, Figuet, and Paroissien in a 2014 Journal of Wine Economics article for identifying the impacts of both objective and subjective quality on wine prices. We recognize how various specifications are observationally equivalent and that the interpretation of model estimates depends crucially on the posited assumption for the relation between price and objective and subjective quality. The proposed framework is applied to Australian premium wines. Results indicate that the price impact of expert personal opinions is similar to the impact of objective quality as estimated via weather, vintage, and producer fixed effects. The relative importance of objective quality compared with subjective quality depends crucially on the ability of expert scores to accurately reflect objective quality. (JEL Classifications: C21, Q11, Q54)

show abstract

“…They find Parker points to have a significant but small effect on wine prices. Dubois and Nauges (2010) also study the effect of Parker points on en primeur prices of Bordeaux wines. They employ a structural empirical approach to disentangle the effect of experts' grades and unobserved quality on the wine price and find a significant "Parker effect."…”

Section: Expertsmentioning

confidence: 99%

Expert Opinion and Product Quality: Evidence From New York City Restaurants

2014

View full text Add to dashboard Cite

We analyze whether consumers' quality perception and/or producer investment of New York City restaurants, measured by Zagat scores, responds to newly appearing expert opinion, measured by Michelin scores. Answering this question is of general economic interest as it applies to all markets with information asymmetries. Employing a difference-in-differences approach as well as a propensity score matching approach we find significant Michelin treatment effects on food and décor quality. Based on these changes, we find a Michelin-induced price increase of approximately 30% per Michelin star. To examine whether the improved food and nonfood quality is based on restaurant investments or is merely imagined, we analyze nonfood investments by referring to Wine Spectator wine list awards. Our analysis suggests that Michelin-reviewed restaurants are significantly more likely to invest in their wine list than others. As a result, Michelin reviewed restaurants are more likely to improve food and nonfood (esp. décor) quality leading to significant price increases. However, while restaurants that increase prices only due to décor and service improvements are more likely to go out of business, food improvements appear to secure a restaurant's survival. (JEL D11, L15, L66)

show abstract

Identifying the effect of unobserved quality and expert reviews in the pricing of experience goods: Empirical application on Bordeaux wine

Cited by 65 publications

References 26 publications

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

Identifying the Effects of Objective and Subjective Quality on Wine Prices

Expert Opinion and Product Quality: Evidence From New York City Restaurants

Contact Info

Product

Resources

About