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Willingness to Pay for Wine Bullshit: Some New Estimates

Published online by Cambridge University Press:  11 November 2021

Kevin W. Capehart Open the ORCID record for Kevin W. Capehart [Opens in a new window]
Kevin W. Capehart*
Affiliation:
Department of Economics, California State University, Fresno, 5245 N Backer Ave M/S PB20, Fresno, CA93740; e-mail: kcapehart@csufresno.edu.
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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)

Keywords

expert evaluationhedonic regressionsmatching estimatorsstated preference
Type
Articles
Information
Journal of Wine Economics , Volume 16 , Issue 3 , August 2021 , pp. 260 - 282
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of American Association of Wine Economists

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Footnotes

I thank an anonymous reviewer and Karl Storchmann, the editor of the journal, for comments and useful suggestions. I am also indebted to the participants at the 2018 Annual American Association of Wine Economists Conference for a productive discussion of this project.

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