The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation
() and Steinar StrÝm
Abstract: Organic wines are increasingly produced and appreciated.
Since organic production is more costly, a crucial question is whether they
benefit from a price premium. We estimate hedonic price functions for
Piedmont organic and conventional wines. We use data on the production side
in addition to variables of interest for consumers. Our results show that,
along with characteristics of interest to consumers, some farm and producer
characteristics not directly relevant for consumers do significantly affect
wine prices. We find that organic wine tends to obtain higher prices than
conventional wine. The price premium is not simply an addition to other
price components, but organic quality modifies the impact of the other
variables on price.
Keywords: Organic wines; Hedonic price functions; Farming; Prices; Price variables; (follow links to similar papers)
JEL-Codes: C21; D49; L11; Q12; (follow links to similar papers)
28 pages, March 11, 2013
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- This paper is published as:
Corsi, Alessandro and Steinar StrÝm, (2013), 'The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation', Journal of Wine Economics, Vol. 8, No. 1, pages 29-48
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