Price determinants in top‐quality e‐auctioned specialty coffees

Abstract

We analyze the price determinants of specialty coffees traded at e-auctions. We hypothesize that since specialty coffees are a highly differentiated product, prices will be determined by both sensory and reputation attributes. To test our hypotheses, we estimate a hedonic price function using data from Central and South American e-auctions and calculate the implicit prices of sensory and reputation attributes. The results show that market clearing prices are a function of sensory characteristics and reputation variables including third-party quality ranking, country of origin, coffee variety, and quantity. The additional attribute information disclosed at e-auctions results in substantially higher prices relative to conventional commodity coffee market prices. Copyright (c)2008 International Association of Agricultural Economists.

The economics of quality in the specialty coffee industry: insights from the Cup of Excellence auction programs

“…The CoE records for each lot include the final auction price (before shipping costs), quality score, cupping notes, extensive farm data including growing conditions and processing methods, and the buyers’ names. Donnet et al () use a similar data set to estimate hedonic prices in coffee, spanning the 2003–2006 CoE auctions. Teuber and Herrmann () use a similar data set to Donnet et al (), spanning 2003–2009.…”

“…To our knowledge, only a small group of papers have been published in this area: Donnet et al. (, ), Teuber (, ), and Teuber and Herrmann () published studies on price determinants for specialty coffee using a hedonic model. Their studies, and indeed the subject of coffee price determinants in general, have been mostly ignored and not critiqued by the community of economists despite its fundamental nature.…”

“…With this in mind, we accomplish two goals in this article: first, we revisit Donnet et al. 's () study and replicate their model with an updated and expanded data set; second, we use a new model specification, with influence from Teuber and Herrmann (), and an estimation method to more accurately describe the market. We focus on Donnet et al.…”

“…We focus on Donnet et al. () because it is one of the first papers published on this topic and it provides a frame upon which we can build the current study.…”

The influence of proximity to market on bean producer prices in Nicaragua

“…Examples include hedonic analyses of coffee prices (e.g. (Donnet et al., , ; Teuber and Herrmann, ), wine prices (Oczkowski, ), and cowpea prices (Faye et al., ; Mishili et al., ). These studies analyze the factors that influence consumer choices and thus inform marketing decisions and product development.…”