Work

The effect of South African wine certifications on price premiums and marginal costs: A two-stage hedonic approach

Year: 2024

Type: article

Abstract: This paper analyses whether there are price premiums for certified and black economic empowerment (BEE) South African wines in the domestic market and the major export markets (Germany, United Kingdom, the Netherlands, and Belgium) and estimates what (marginal) costs are related to supplying these certifications. The results suggest price premiums for BEE wines, while for certified wines price premiums only apply in some markets and especially for those certifications that focus on the environment and organic production, but not for those that focus on fair trade or labor. The results for marginal costs suggest that subsidized BEE wines sell lower quantities but gain access to higher price segments, while the opposite holds true for certified wines. Additionally, for certified wines (except Fairtrade), younger and private producers have a comparative cost advantage.

Source: Economic Modelling

DOI: 10.1016/j.econmod.2024.106650

Author: Britta Niklas

Institution: Ruhr University Bochum

Language: English

Topic: Wine Industry and Tourism

Subfield: Tourism, Leisure and Hospitality Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Zero hunger, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,140