VERTICAL DIFFERENTIATION, PERCEPTIONS RESTRUCTURING, AND WINE CHOICES: THE CASE OF THE GRAN SELEZIONE IN CHIANTI WINES
2017
Costanigro, Marco | Scozzafava, Gabriele | Casini, Leonardo
We conduct a choice experiment where the number of labels vertically differentiating Chiantiwines (Chianti, Chianti Classico, Chianti Classico Riserva, Chianti Classico Gran Selezione) isaugmented incrementally in a between-subject design, eliciting both quality perceptions andwine choices. We find that quality expectations are endogenous to the labeling regime, andadding a high-quality label (e.g., Chianti Gran Selezione) decreases the perceived quality of allother Chianti wines (comparative stigma). A model conditioning on subjective qualityperceptions with heterogeneous WTP for quality is then proposed, and estimated via randomparameter multinomial logit. The endogeneity problem arising from using subjective beliefs asregressors is addressed by means of a control-function approach. Results are compared toreduced form approaches where the marginal utility of quality and subjective perceptions areconfounded in a single label-specific estimate, and the model is used to determine how much ofthe cannibalization observed after introducing higher-tier quality standards is attributable torestructuring of perceptions and comparative stigma.
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