Distance Decay in the Willingness to Pay for Wine: Disentangling Local and Organic Attributes

Distance Decay in the Willingness to Pay for Wine: Disentangling Local and Organic Attributes This paper investigates how the residents of a French wine-producing region value the attributes of wine. We elicit the willingness-to-pay (WTP) for organic/non-organic and local/non-local wines with increasing levels of information on the impact of agricultural practices at both global and local scales. The analysis shows that there is a significant organic premium associated with both local and non-local wines. This organic premium significantly increases with information and significantly decreases with the distance between the consumer’s home and the vineyard. Based on the econometric predictions of the WTP, we show that a per-unit tax on non-organic wines or a standard imposing organic practices increases welfare through the internalization of the attributes revealed by the experiment. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Environmental and Resource Economics Springer Journals

Distance Decay in the Willingness to Pay for Wine: Disentangling Local and Organic Attributes

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Publisher
Springer Journals
Copyright
Copyright © 2016 by Springer Science+Business Media Dordrecht
Subject
Economics; Environmental Economics; Environmental Law/Policy/Ecojustice; Political Economy/Economic Policy; Economics, general; Environmental Management
ISSN
0924-6460
eISSN
1573-1502
D.O.I.
10.1007/s10640-016-0057-8
Publisher site
See Article on Publisher Site

Abstract

This paper investigates how the residents of a French wine-producing region value the attributes of wine. We elicit the willingness-to-pay (WTP) for organic/non-organic and local/non-local wines with increasing levels of information on the impact of agricultural practices at both global and local scales. The analysis shows that there is a significant organic premium associated with both local and non-local wines. This organic premium significantly increases with information and significantly decreases with the distance between the consumer’s home and the vineyard. Based on the econometric predictions of the WTP, we show that a per-unit tax on non-organic wines or a standard imposing organic practices increases welfare through the internalization of the attributes revealed by the experiment.

Journal

Environmental and Resource EconomicsSpringer Journals

Published: Aug 3, 2016

References

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