Do Expert Reviews Affect the Demand for Wine?

Friberg, Richard; Grönqvist, Erik

doi:10.1257/app.4.1.193

Cited by 55 publications

(40 citation statements)

References 40 publications

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“…Friberg and Gronqvist (2012) show that favorable expert reviews increase the demand for wines in Sweden. In a randomized experiment, Hilger, Rafert and VillasBoas (2011) find that good reviews increase sales of wine.…”

Section: Introductionmentioning

confidence: 97%

Experts’ awards and economic success: evidence from an Italian literary prize

Ponzo

Scoppa

2015

J Cult Econ

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Product quality is often unobservable ex-ante and consumers rely on experts' judgments, sometimes in the form of ratings or awards. Do awards affect consumers' choices or, conversely, are they conferred on the most popular products? To disentangle this issue, we use data about the most important Italian Literary Prize, the "Strega Prize", undertaking two different estimation strategies to evaluate the impact that winning the Prize has on book sales. First, we adopt a Regression Discontinuity Design using a measure of book sales as a dependent variable and as a forcing variable (proxying for intrinsic book quality) the jury votes received by each nominated book in the competition. We find that the Strega Prize has a very strong impact on sales. Second, by using weekly data on appearances on bestseller lists, we estimate a difference-in-differences model in which we compare sales performance of treated and control books before the award is conferred with their respective performances afterwards. The results confirm a huge influence of the Prize on book sales and show that most of the impact occurs in the weeks following the announcement of the Prize. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: Z10, Z11, L15, L80, M30, D12, J44

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Section: Introductionmentioning

confidence: 97%

Experts’ awards and economic success: evidence from an Italian literary prize

Ponzo

Scoppa

2015

J Cult Econ

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“…() posted wine ratings in a supermarket and found that for low‐priced wines, high ratings markedly increased purchases. Friberg and Grönqvist () provided corroborating evidence on the role of wine experts, finding that positive reviews led sales to peak shortly after the review was released. Ali et al.…”

Section: Applied Hedonic Pricing Studiesmentioning

confidence: 88%

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

Gustafson

Lybbert

Sumner

2016

Agricultural Economics

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This article uses a novel experimental approach to measure consumer willingness to pay (WTP) for wine attributes. We invited customers of a local supermarket who had selected a bottle of wine to purchase to participate in a valuation experiment. Integrating their original wine choice into the experiment, each participant evaluated six alternative wines, generating a rich set of data on willingness to pay and consumer characteristics. The data from the experiment allow us to compare standard shelf price-based wine attribute valuation estimates with estimates using WTP data and an increasing amount of information about individual consumers. The full model employs individual fixed effects to estimate WTP parameters without bias from consumer sorting or supply side influences. Our WTP estimates for wine attributes differ markedly from previous attribute value estimates. Consumers in our sample display clear and stable preferences for wine varieties, but less clear preferences for appellations. Our results suggest caution is needed in using market prices to estimate parameters of the consumer valuation function for product attributes. JEL classifications: C93, D12, L66

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“…For instance, expert reviews or reports in social media could be triggered by widening distribution. Friberg and Grönqvist (2012) examine the impact of expert newspaper reviews on wine sales using Systembolaget data for 2002 to 2006. They find that positive reviews have a significant positive effect on sales, while the effect of neutral or negative reviews is small.…”

Section: Push and Pull Factors As A Possiblementioning

confidence: 99%

“…Bronnenberg et al (2012) use the migration history of households and consumer scan data on a large number of packaged goods categories to establish that some 40% of geographic variation in market shares across the United States can be attributed to persistent preferences. 23 Friberg and Grönqvist (2012) use weekly data; the effect peaks in the week after the review and gradually diminishes to an accumulated effect of a favorable review that is equivalent to 4,418 liters in (Friberg and Grönqvist 2012 only examine the T1 and Base modules) the total effect of a favorable review can thus be calculated as 4,418/(8,218 × 16 weeks). 24 For example, we estimated a regression adjustment specification in our matching framework where we included advertising expenditure: The point estimates of the average treatment on the treated products were only marginally different than in our baseline specification.…”

Section: Endnotesmentioning

confidence: 99%

The Effect of Retail Distribution on Sales of Alcoholic Beverages

Friberg¹,

Sanctuary²

2017

Marketing Science

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Abstract. We use monthly sales of all wines, beer, and spirits sold between 2006 and 2011 by Sweden's retail monopoly on alcohol to estimate the causal effect of retail distribution on market share by volume at the product level. Products are defined at the level of the stock-keeping unit. Two institutional features are key to identifying the causal effect: First, the monopolist uses four levels of retail distribution; a change in retail distribution is therefore associated with a discrete shift in the number of stores that carry a product in a given month. Second, the retailer is legally bound and monitored by the European Union to ensure that it acts in a non-discriminatory manner with all its suppliers. These features allow us to rule out many possible confounding factors in estimating the effect of distribution on sales volume. We find large and statistically significant effects from changes in retail distribution on market share by volume across all levels of retail distribution. The associated volume elasticity of retail distribution is convex; the wider the retail distribution the greater the marginal volume increase from further widening. In this market, wider distribution means reaching stores with successively smaller assortment. Our results indicate that the smaller assortment in smaller stores, coupled with a low resistance to compromise, is the main reason for the convex pattern. In other words, convexity appears to be generated by products achieving "a larger share of a smaller pie" as retail distribution expands.

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Do Expert Reviews Affect the Demand for Wine?

Cited by 55 publications

References 40 publications

Experts’ awards and economic success: evidence from an Italian literary prize

Experts’ awards and economic success: evidence from an Italian literary prize

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

The Effect of Retail Distribution on Sales of Alcoholic Beverages

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