Files
Abstract
It can be difficult to understand how wines prices are established. Wines are experience goods, so consumers must rely on their previous experience or expert opinions in making their purchase choices. The impact of expert rating scores on wine prices is well documented. This study estimates the contribution of expert’s wine tasting notes, focusing on certain keywords, and other wine characteristics. We examine whether expert descriptive information has an influence on the wine prices using tasting notes on Washington wines that are listed in Wine Spectator magazine. The analysis includes estimations of different wine segments by price category. Estimating a hedonic price functions by product segment relaxes the assumption that the implicit prices of each attribute are the same across price categories. The results indicate that certain keywords used in tasting notes and wine characteristics exert a significant influence on the prices of wines and these effects are different across different segments.