Does the environment matter on the wine market: An analysis of the wine market in Austria

Abstract

The main aim of the paper is the estimation of regional and environmental values capitalized in the wine market. By means of hedonic regression analysis, possible premiums attached to nonmarket characteristics such as geographical designations and regional qualities are deferred from the Austrian wine market prices. Moreover, the relation between land values and wine prices is addressed. In the introductory section the main legal changes in the Austrian wine market are pointed out. Afterwards, the variable selection of perceived price signals on the basis of the assumption of homogeneity of wine consumers' preferences of regulations underlying the model is performed. Finally, the hedonic regressions display the consumers 'willingness to pay for various wine characteristics, whereby the relevance of geographical designations and other regional criteria reflected in the land values are investigated. Finally, possible future implications of the results are highlighted. © 2013 WIT Press.