Scandinavian Working Papers in Economics
Memorandum,
Oslo University, Department of Economics
No 07/2013: The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation
Alessandro Corsi () and Steinar Strøm ()
Additional contact information
Alessandro Corsi: Università di Torino, Department of Economics, Postal: Via Po, 53 , 10124 Torino , Italy
Steinar Strøm: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
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
28 pages, March 11, 2013
Full text files
memo-07-2013.pdf
- Published as
- Alessandro Corsi and Steinar Strøm, (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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