•   •   •   •

Revised from an earlier version on March 6, 2009

Download the Paper (227 K, PDF file) - March 6, 2009 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
The effect of expert opinion on consumer demand for experience goods is difficult to quantify as the relationship between purchases and reviews may be driven by product quality. Further, it is unclear whether a review-based demand effect is due to the provision of quality or existence information. Utilizing a field experiment in the retail wine market to overcome these obstacles, we find that there is a significant positive average consumer response to expert opinion labels for wine. We also find that demand decreases for wines that receive low scores, while the demand for average and higher than average scored wines increases. The results indicate that expert opinion labels transmit quality information that has a demand effect as opposed to solely increasing the wine's shelf visibility to the consumer.

SUGGESTED CITATION:
James Hilger, Greg Rafert, and Sofia B. Villas-Boas, "Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market" (March 6, 2009). Department of Agricultural & Resource Economics, UCB. CUDARE Working Paper 1049.
http://repositories.cdlib.org/are_ucb/1049