Drinking Wine at Home: Hedonic Analysis of Sicilian Wines Using Quantile Regression

Abstract

In recent decades, the Sicilian wine industry has experienced a booming expansion because of the growing preferences of Italian consumers for Sicilian wines, especially in extra-regional markets. These consumers have been paying closer attention to Sicilian premium wines. For this reason, the objective of this study is to inform professional investors and wine managers about the consumer preferences with respect to the most important segment categories of domestically consumed Sicilian wines. Using the quantile regression technique, we analyzed the role of wine attributes and prices as an information tool in order to value for each wine segment the implicit price of the attributes affecting wine consumers’ choices. The results indicate that Protected Designation of Origin (PDO) and Geographical Indication (PGI) certification is the main determinant in the wine price mechanisms and certified wines achieve premium prices that are progressively higher as the price level of the wine increases. Furthermore the effect of the brand on price formation seems to have a significant impact for low-end wines, whereas it has no specific impact on the price mechanism for high-end wines.