Willingness to Pay for Wine Bullshit: Some New Estimates. (August 2021)

• Record Type: Journal Article
• Authors: Capehart, Kevin W.
• Is Part Of: Journal of wine economics. Volume 16:Number 3(2021)
• Page Start: 260
• Page End: 282
• Publication Date: 2021-08
• Subjects: expert evaluation -- hedonic regressions -- matching estimators -- stated preference; Wine and wine making -- Economic aspects -- Periodicals; Wine and wine making -- Periodicals; Wineries -- Economic aspects -- Periodicals; 338.476632
• DOI: 10.1017/jwe.2021.24
• Languages: English
• ISSNs: 1931-4361

Abstract

Abstract: As part of a classic article in this journal, Richard Quandt identified 123 wine descriptors that he deemed to be bullshit. In this paper, I examine whether wine consumers are willing to pay any more (or less) for wine if it is described by one of those "bullshit" descriptors. I use three methods to examine that. The first method involves applying a hedonic regression to a dataset of prices and expert descriptions for about 50, 000 wines. The second method involves applying a matching estimator to the same dataset. The third method involves a stated-preference survey of about 500 wine consumers. The three methods suggest that for most of the descriptors Quandt deemed to be bullshit, most consumers' marginal willingness to pay for a descriptor is zero or near-zero. Yet, for some of the descriptors, some consumers do seem to have a non-zero marginal willingness to pay, perhaps because the descriptors shape a consumer's subjective experience or because they signal objective aspects of wine. (JEL Classifications: D12, D83, L66)