Demand under product differentiation: an empirical analysis of the US wine market

Oversupply has led to a number of perplexities for the Australian wine industry in recent times. When disaggregated from the industry level, however, the problem can be better described as a range of attribute-specific disequilibria. To date, the solutions to this problem have predominantly revolved around supply-side policies of reducing output through crop thinning or vine pulling. By contrast, this paper focuses on the demand side and argues that the disequilibria may be reduced by gaining a better understanding of the demand for Australian wine. A discrete choice model of product differentiation is used to estimate the demand for wine in Australia’s second largest export market, the United States. Implications of the analysis are explored.

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Journal Article
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Australian Journal of Agricultural and Resource Economics, Volume 54, Issue 4
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 Record created 2017-04-01, last modified 2018-01-22

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