We estimate the effect of revealing expert opinion labels on wine product purchases by labelling a random subset of wine products within the consumers' retail shelf choice faced in a treated store. We use a detailed weekly product level panel scanner data set for labeled and unlabeled wines in the treated and comparable control stores before and after the implementation of a shelf labeling field experiment. We then combine the scanner data with additional information on the characteristics of each product, such as brand, varietal, region of production, and price point relative to other wines, to estimate the average and heterogeneous effects of the field experiment on wine consumption, shedding light into possible mechanisms behind those effects. First, we find there to be a positive and significant overall average effect and that demand increases more for higher score wines than for lower score wines. Additionally, we find that high scores matter more for prices in the lower quartile of the overall wine price distributions, which does not align with previous beliefs of consumers perceiving low price as signaling high quality. Our findings are instead consistent with pre treatment consumer behavior where consumers infer high quality for high prices, once quality is revealed. We find that demand does not move for these higher priced wine quartiles. We also estimate positive spillover effects of this experimental treatment within brand for untreated wines as the displayed average score of the wine brand increases. However, we find negative spillover effects for untreated wines that belong to intensively treated brands.
Field experiment; Labels; information; expert opinion; wine; product attributes;
- C23: Panel Data Models • Spatio-temporal Models
- D12: Consumer Economics: Empirical Analysis
- H20: General
Céline Bonnet, James Hilger, and Sofia B. Villas-Boas, “Reduced Form Evidence on Belief Updating under Asymmetric Information - The Case of Wine Expert Opinions”, TSE Working Paper, n. 17-834, August 2017.
TSE Working Paper, n. 17-834, August 2017