are there wine preferences? pascale bazoche pierre combris eric giraud-hÉraud inra, aliss, ivry sur...
TRANSCRIPT
Are there wine preferences?
Pascale BAZOCHE
Pierre COMBRIS
Eric GIRAUD-HÉRAUD
INRA, ALISS, Ivry sur Seine
1. Assessing Willingness to Pay for Appellation of Origin with Pinot Noir wines from Burgundy
2. Investigating preference heterogeneity with Chardonnay wines
Outline
1. Willingness to Pay for Appellation of Origin:
an Experiment with Pinot Noir Wines
in France and Germany
• Can we assess the respective effects of sensory characteristics and label information on consumers' willingness to pay (WTP) for wines?
• What is the impact of grape variety, brand and appellation information on WTP?
• Do consumers from different countries react differently to this information?
• Can middle range Pinot Noir wines from Burgundy compete with generic Pinot Noir and branded Pinot Noir on the international market?
Questions
Wines Market
prices (€)
Bourgogne 7.00 Bourgogne Passe tout grains 3.20
Pinot noir (Pays d’Oc) 5.60 Gallo (Pinot noir) 6.80
Bourgogne : Magnien
Bourgogne Passe-tout-Grains : La cuvée des Ducs
Pays d’Oc : Les Salices (Lurton)
Gallo : Turning Leaf Pinot noir
Which wines?
Wines Market
prices (€)
Bourgogne 7.00 Bourgogne Passe tout grains 3.20
Pinot noir (Pays d’Oc) 5.60
Gallo (Pinot noir) 6.80
Bourgogne+Pinot noir
Bourgogne (traditional design)
Bourgogne (modern design) Spätburgunder
Alternative Labels
Which wines?
4. Random selection of 1situation X 1wine Actual sale
1. Blind tasting 4 wines: 4 prices
2. Label 8 wines: 8 prices
3. Fullinformation + 4 wines: 4 prices
Protocol (1)
0 €
Maximumbuying price
Participant Experimenter
I don't buy
I buy
4 €
Incentive mechanism: the BDM procedure
1€ 2€ 3€ 4€ 5€ 6€ 7€
0 €
Maximumbuying price
Participant Experimenter
I don't buy
6 €
Random selling prices
4 €
Incentive mechanism: the BDM procedure
1€ 2€ 3€ 4€ 5€ 6€ 7€
0 €
Maximumbuying price
Participant Experimenter
I (must) buy
2 €
Random selling prices
4 €
Incentive mechanism: the BDM procedure
0 €
Maximumbuying price
2 €
4 €
6 €
All the prices you would be pleased to pay to obtain
the bottle
All the prices you would be pleased not to pay for that
bottle
Incentive mechanism: the BDM procedure
• Subjects who did not usually drink or buy wine were not selected for the experiment
• Subjects who agreed to participate signed a consent at the beginning of the experiment
• Participants were asked not to communicate with each other before the end of the experiment (wines in random order)
• They were reminded that the experiment was not an assessment of the wines' market value but a sale
• They were asked to write down a maximum buying price on a paper after each evaluation
• They could refuse to buy and tick the corresponding option
Protocol (2)
| n sex age size income price example
-------+-------------------------------------------------------------
Paris | 60 0.55 41.19 2.41 1558.47 4.83 6.93
Munich | 59 0.51 40.81 2.39 1240.96 5.42 7.00
-------+-------------------------------------------------------------
Total | 119 0.53 41.00 2.40 1399.72 5.10 6.96
---------------------------------------------------------------------
Prob()| 0.65 0.86 0.92 0.03 0.25 0.92
n = sample sizesex = sex of participant (Female=0, Male=1)age = age of participant size = household sizeincome = monthly per capita incomeprice = usual price paid for wine example = price example (control for anchoring)
Participants
119 participants X 16 wines = 1904 prices, 1538 prices > 0
All prices
Positive prices
Observations 1904 1538 Mean 2.93 3.63 Standard-deviation 2.75 2.61 Minimum 0 0.10 Maximum 30 30
Percentiles 10 % 0 1.20
25 % 1 2.00
50 % 2.50 3.00
75 % 4 4.50
Price (WTP) distribution
All prices
Characteristics Impact on WTP
P-values
Sex 0.571 0.127 Age 0.001 0.961 Household size - 0.004 0.989 Income quartile - 0.254 0.368 Country 0.292 0.461
Price usually paid 0.577 0.000
Constant - 0.068 0.945
Tobit model, 1664 observations (307 = 0 ; 1357 > 0)
105 clusters (accounting for intra-subject correlation)
Participants' characteristics influencing WTP
BLINDBourgogne
PTGGalloPinot
LABELBourgogne
PTGGalloPinot
PinotBgneParchemin
ModerneSpät
FULL INFOBourgogne
PTGGalloPinot
0 .1 .2 .3 .4 .5 .6 0 .1 .2 .3 .4 .5 .6
Paris Munich
Graphs by Pays % refusing to buy
95% confidence intervals of % of WTP=0
Full sample France Germany
Blind reference reference reference Label 0.164 *** 0.226 *** 0.117 ** Full Info 0.105 *** 0.153 *** 0.067
Blind X Bourg reference reference reference X PTG 0.049 0.070 0.027 X Gallo 0.028 0.026 0.032 X Pinot 0.119 *** 0.081 0.151 ***
Label X Bourg reference reference reference X PTG - 0.0003 - 0.156 ** 0.083 ** X Gallo - 0.131 ** - 0.400 *** 0.057 X Pinot - 0.069 - 0.332 *** 0.105 **
Full Info X Bourg reference reference reference X PTG - 0.091 - 0.274 *** 0.041 ** X Gallo - 0.053 - 0.200 ** 0.045 X Pinot 0.009 - 0.151 0.114 *
Probability(WTP=0)
Probit-marginal probabilitiesof factors affecting participants’ decision to buy (1)
Full sample France Germany
Country (ref=France) -0.050 Usual price 0.023 *** 0.016 0.028 ** Woman - 0.066 * - 0.005 - 0.151 *** Household size 0.016 0.021 - 0.003 Income - 0.023 - 0.026 - 0.006 Age - 0.0003 0.001 - 0.002 Order - 0.006 - 0.009 - 0.0004
Probability to purchase 0.825 0.847 0.825
Observations 1247 671 576
Probability(WTP=0)
Probit-marginal probabilitiesof factors affecting participants’ decision to buy (2)
BLINDBourgogne
PTGGalloPinot
LABELBourgogne
PTGGalloPinot
PinotBgneParchemin
ModerneSpät
FULL INFOBourgogne
PTGGalloPinot
2 3 4 5 6 2 3 4 5 6
Paris Munich
Graphs by Pays
95% confidence intervals of WTP>0
Full sample France Germany
Blind reference reference reference Label 0.834 *** 0.885 *** 0.821 *** Full Info 0.869 *** 0.942 *** 0.789
Blind X Bourg reference reference reference X PTG - 0.320 - 0.198 - 0.485 X Gallo - 0.212 - 0.132 - 0.276 X Pinot - 0.109 0.028 - 0.224
Label X Bourg reference reference reference X PTG - 0.068 - 0.053 - 0.141 X Gallo - 0.090 - 0.359 0.136 X Pinot - 0.349 - 0.461 ** - 0.276
Full Info X Bourg reference reference reference X PTG - 0.146 - 0.006 - 0.294 X Gallo - 0.014 - 0.141 0.124 X Pinot 0.081 - 0.039 - 0.159
Factors influencing positive WTP (1)
Full sample France Germany
Country (ref=France) 0.424 Usual price 0.500 *** 0.542 *** 0.450 *** Woman - 0.320 - 0.381 - 0.346 Household size - 0.099 - 0.187 - 0.037 Income - 0.156 - 0.506 ** 0.327 Age - 0.006 0.010 - 0.007 Order - 0.041 - 0.038 - 0.045
Constant 0.426 1.084 0.477
Observations 1012 556 456
Factors influencing positive WTP (2)
How to explain the small differences in WTP?
1. Consumers are unable to discriminate between wines
OR
2. Consumers discriminate but their preferences are very heterogeneous and aggregations cancel out the differences
Question
For each participant, in each situation, wines are ranked according to WTP:
id wine price rank--------------------------- 1 Bourgogne 5 1 PTG 5 1 Gallo 0 3 Pinot 0 3--------------------------- 2 Gallo 8 1 Pinot 7 2 Bourgogne 3 3 PTG 2 4---------------------------
Mean WTP are then computed by rank
WTP according to participants' preferences
BLINDRank 1Rank 2Rank 3Rank 4
LABELRank 1Rank 2Rank 3Rank 4Rank 5Rank 6Rank 7Rank 8
FULL INFORank 1Rank 2Rank 3Rank 4
0 1 2 3 4 5 6 0 1 2 3 4 5 6
Paris Munich
Graphs by Pays
95% confidence intervals of WTP according to preferences
BLINDRank 1Rank 2Rank 3Rank 4
LABELRank 1Rank 2Rank 3Rank 4Rank 5Rank 6Rank 7Rank 8
FULL INFORank 1Rank 2Rank 3Rank 4
0 .1 .2 .3 .4 .5 .6 0 .1 .2 .3 .4 .5 .6
Paris Munich
Graphs by Pays % Refusing to buy
95% confidence intervals of WTP=0 according to preferences
€/bouteille
BLINDRank 1Rank 2Rank 3Rank 4
LABELRank 1Rank 2Rank 3Rank 4Rank 5Rank 6Rank 7Rank 8
FULL INFORank 1Rank 2Rank 3Rank 4
1 2 3 4 5 6 1 2 3 4 5 6
Paris Munich
Graphs by Pays
95% confidence intervals of WTP>0 according to preferences
Blind Tasting---------------------------------- | Rank Wines | 1 2 3 4----------+-----------------------Bourgogne | 35 23 39 22 PTG | 38 32 23 26 Gallo | 38 31 33 17 Pinot | 38 36 33 12----------------------------------
Full Information---------------------------------- | Rank Wines | 1 2 3 4----------+-----------------------Bourgogne | 40 37 21 21 PTG | 36 32 35 16 Gallo | 42 16 33 28 Pinot | 41 29 34 15----------------------------------
Wine rankings in situations 1 and 3
• Sensory characteristics and label information influence differently French and German consumers
• French participants respond very positively to AOC information
• AOC does not seem to be an efficient signal outside the country of origin
• Consumers have strong preferences
• Heterogeneity in preferences is very important and averages out differences when observing aggregated data
What did we learn?
► Preference heterogeneity– Pinot Noir?– Non-expert consumers?– Wines were too similar?
► Chardonnay1. Same experiment in Munich
2. "Sensory oriented" participants (pilot study)
3. Wider price range (pilot study)
Investigating preference heterogeneity
Chardonnay: "Munich" tasting
64 participants, Munich, 2007 (April 17-19th)
Men: 55%
Age: 18 to 65 (mean: 40)
Wines Market
prices (€)
Bourgogne AOC Maufoux 7.70 Pays d’Oc Gérard Bertrand 3.60 Gallo Chardonnay Sierra Valley 5.00
95% confidence intervals of WTP according to wines
BLINDBourgogne
GalloChardonnay
LABELBourgogne
GalloChardonnay
ParcheminVillage
ModerneBgneChrdny
FULL INFOBourgogne
GalloChardonnay
1 2 3 4 5
Chardonnay Munich
Price (€/bottle)
95% confidence intervals of WTP according to ranks
BLINDRank 1Rank 2Rank 3
LABELRank 1Rank 2Rank 3Rank 4Rank 5Rank 6Rank 7
FULL INFORank 1Rank 2Rank 3
1 2 3 4 5 6
Chardonnay Munich
Price (€/bottle)
Chardonnay: "Sensory oriented" participants
Sexe | Freq. Percent
------+----------------------- F | 14 60.87 M | 9 39.13 ------+-----------------------Total | 23 100.00
age | Freq. Percent------+-----------------------30-39 | 7 30.4340-49 | 7 30.4350-59 | 6 26.09 >60 | 3 13.04------+-----------------------Total | 23 100.00
23 participants, European Sensory Network meeting,
Dijon, 2007 (November 22th)
1. Blind tasting
3. Fullinformation +
2. Label
4. Random selection of 1 situation X wine
2 wines: 2 prices
2 wines: 2 prices
2 wines: 2 prices
Actual sale
Protocol
Mean and 95% CI of reservation prices (€/bottle) according to wines and ranks
ChrdnyPouilly
Chrdny
Pouilly
Chrdny
Pouilly
1
2
3
4
5
6
7
8
9
10
Rank1
Rank2
Rank1
Rank2
Rank1
Rank2
1
2
3
4
5
6
7
8
9
10Blind tasting Label Label + tasting Blind tasting Label Label + tasting
-------------------------------------------------- | sit and Rank | -- Taste - -- Label - -- Full -- vin | 1 2 1 2 1 2----------+--------------------------------------- Chrdny | 13 10 5 18 15 8 Pouilly | 14 9 22 1 15 8--------------------------------------------------
Chardonnay: "Wide price range" tasting
Sexe | Freq. Percent
------+----------------------- F | 8 32.00 M | 17 68.00 ------+-----------------------Total | 25 100.00
age | Freq. Percent------+-----------------------30-39 | 6 24.0040-49 | 7 28.0050-59 | 9 36.00 >60 | 3 12.00------+-----------------------Total | 25 100.00
26 participants from Norway, Paris, 2008 (June 9th)
Chardonnay: "Wide price range" tasting
Savigny-les-BeauneAOC: 25 €
Gallo ChardonnaySierra Valley: 5 €
ChardonnayPays d'Oc: 3.60 €
Chassagne MontrachetAOC: 28 €
Mean and 95% CI of reservation prices (€/bottle) according to wines
PdOc
Gallo
Chassagne
Savigny
PdOcGallo
ChassagneSavigny
PdOc
Gallo
Chassagne
Savigny
05
1015
Pric
e (
€/b
ottle
)
Taste Label Full
Mean and 95% CI of reservation prices (€/bottle) according to wines and ranks
Chrdny
Brgne AOC
Chrdny
Brgne AOC
Chrdny
Brgne AOC
02
46
810
1214
Pric
e (
€/b
ottle
)
Taste Label Full
Mean and 95% CI of reservation prices (€/bottle) according to wines and ranks
Rank1
Rank2
Rank1
Rank2
Rank1
Rank2
02
46
810
1214
Pric
e (
€/b
ottle
)
Taste Label Full
Mean and 95% CI of reservation prices (€/bottle) according to wines and ranks
Chrdny
Brgne AOC
Chrdny
Brgne AOC
Chrdny
Brgne AOC
02
46
810
1214
Pric
e (
€/b
ottle
)
Taste Label Full
Rank1
Rank2
Rank1
Rank2
Rank1
Rank2
02
46
810
1214
Pric
e (
€/b
ottle
)
Taste Label Full
-------------------------------------------------------- | Sit and Rank | --- Taste -- --- Label -- --- Full --- wine | Rank1 Rank2 Rank1 Rank2 Rank1 Rank2----------+--------------------------------------------- Chrdny | 13 13 7 19 8 18Brgne AOC | 14 12 22 4 21 5--------------------------------------------------------