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ABSTRACT:
There exist two significant obstacles to analyzing the effect of expert opinion on consumer demand for experience goods: (1) the relationship between good reviews and high product demand may be spurious and driven by high product quality, and (2) even if expert opinion increases consumer demand, it is unclear whether it does so by providing quality information or by alerting consumers to the existence of a particular product. We utilize an experimental approach in a retail grocery chain in which we display expert opinion information for a group of randomly selected wines to overcome these obstacles. We find that although there is no overall consumer response to expert opinion provision, a subset of highly reviewed wines experienced an increase in demand. Results indicate that consumers utilize quality information provided by expert opinion labels, as opposed to solely using the label to learn of a wine's existence.

SUGGESTED CITATION:
James Hilger, Greg Rafert, and Sofia B. Villas-Boas, "Expert Opinion and the Demand for Experience Goods: An Experimental Approach" (October 16, 2007). Department of Agricultural & Resource Economics, UCB. CUDARE Working Paper 1049.
http://repositories.cdlib.org/are_ucb/1049