Impacts of Expert Information on Prices for an Experience Good across Product Segments: Tasting Notes andWine Prices
By: Chen, Kuan-Ju; McCluskey, Jill J.
Chen, Kuan-Ju; McCluskey, Jill J., Impacts of Expert Information on Prices for an Experience Good across Product Segments: Tasting Notes andWine Prices, Journal of Agricultural and Resource Economics, Volume 43, Issue 3, September 2018, Pages 388-402
When purchasing experience goods, consumers often rely on information from expert evaluations. In this article, we quantify how expert information impacts prices across product segments. For higher-end products, consumers have the incentive to invest more time in research prior to purchase. Thus, expert evaluations should have a greater impact on the price of higher-end segments. We analyze the effects of tasting notes on wine prices across price categories and find that certain keywords used in tasting notes to describe wine characteristics exert a significant influence on wine prices. These effects vary across different segments, with the greatest impact on the premium segment.