Article
Did the Great Recession Change the Regional Reputation Premium for Wine in the US?
Wine Economics and Policy
(2013)
Abstract
Wine is an experience good and also (at least under certain circumstances and to a certain extent) a conspicuous consumption good. As such, wine buyers should be willing to pay a premium for regional reputation to avoid risk and to send signals about their wealth and social status. At the same time, wine is an annually produced good; every year new bottles arrive to wine stores. Accordingly, a wine store's manager has to periodically clear the store's inventory. Statistical analyses indicate that, during the Great Recession in the US, two developments—a substantial decline in income and a rise in information sharing via the internet and social media—had a dampening effect on the regional reputation premium and lowered the price-quality ratio differences among different wine regions. Moreover, during the same time period, the discount rates necessary to clear inventories significantly increased.
Keywords
- Regional reputation premium,
- Price–quality ratio,
- Consumer behavior
Disciplines
Publication Date
June, 2013
DOI
10.1016/j.wep.2013.05.004
Citation Information
Omer Gokcekus and Clare Finnegan. "Did the Great Recession Change the Regional Reputation Premium for Wine in the US?" Wine Economics and Policy Vol. 2 Iss. 1 (2013) p. 27 - 32 Available at: http://works.bepress.com/omer_gokcekus/44/