Impacts of Expert Information on Prices for an Experience Good across Product Segments: Tasting Notes and Wine Prices

Abstract

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.

Keywords

• expert evaluation
• hedonic prices