Products and Prejudice: Measuring Country-of-Origin Bias in U.S. Wine Imports
UC Santa Cruz Center for International Economics Working Paper No. 03-10
22 Pages Posted: 30 Jul 2003
Date Written: June 2003
Should exporters worry about country-of-origin bias? Although the pervasiveness of country-level product advertising suggests that they do, lack of data has limited the empirical study of subjective bias toward products from a specific country. Using data from the U.S. wine industry, including numerical blind tasting evaluations, this paper directly computes the impact of country-of-origin bias upon wine import prices. A hedonic pricing framework is used to control for vintage, blind-tasted quality, varietals, production costs and quantities. Cross-country comparisons of price residuals suggest that "Product of Italy" on the label can raise the price of a bottle by more than fifty percent.
Keywords: International trade, hedonic pricing, wine
JEL Classification: F13, L11, L15, Q11, Q17
Suggested Citation: Suggested Citation