Private vs. Collective Wine Reputation

Using a hedonic pricing model, this paper investigates the pricing implications of two broadly defined wine reputation strategies: private and collective. While the former consists of an individual quality differentiation strategy relying on an individual wine producer's own reputation, the latter mainly relies on the reputation of a group of wineries belonging to a particular geographic denomination. To this aim, wine purchases made by a nationally representative panel of Italian households were analyzed. Estimates based on quantile regression reveal that the effects of the two reputation strategies (private and collective) have a different weight according to the price segment of the wines in question. While private reputation plays a major role in both low and high priced wines, collective reputation in terms of geographical designations seems especially important for high priced wines.