Hostname: page-component-78c5997874-dh8gc Total loading time: 0 Render date: 2024-11-15T11:15:15.244Z Has data issue: false hasContentIssue false
  • English
  • Français

Drink Beer for Science: An Experiment on Consumer Preferences for Local Craft Beer

Published online by Cambridge University Press:  20 November 2018

Jarrett Hart
Jarrett Hart*
Affiliation:
Department of Agricultural and Resource Economics, University of California-Davis, One Shields Avenue, Davis, CA 95616; e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

The U.S. and global beer industries include a great many smaller-scale craft breweries supplying numerous differentiated products as well as a few macro-breweries with less diverse beer portfolios. The craft and macro segments of this industry have become quite distinct, with little substitutability between the two types of beer. Furthermore, since the early 2000s the craft segment has realized consistent growth whereas large breweries have seen a steady decline in sales. Macro-breweries have responded by acquiring smaller breweries to capture a share of the craft market. This study implements an experimental approach to measure consumers’ willingness to pay (WTP) for locally produced and independently owned beer. Regression analysis clearly indicates that consumers prefer locally owned and independently produced beer, and how much they are willing to pay for those attributes. (JEL Classifications: D12, L66)

Keywords

acquisitionbeercraftlocalWTP
Type
Articles
Information
Journal of Wine Economics , Volume 13 , Issue 4 , November 2018 , pp. 429 - 441
Copyright
Copyright © American Association of Wine Economists 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I am grateful to an anonymous reviewer for his/her expeditious review. I also thank Julian Alston, Kevin Novan, Charles Bamforth, Aaron Smith, and participants of the 12th Annual AAWE Conference in Ithaca, NY, for their comments and support.

References

Ariely, D., Bracha, A., and Meier, S. (2009). Doing good or doing well? Image motivation and monetary incentives in behaving prosocially. American Economic Review, 99(1), 544–555.Google Scholar
Becker, G., DeGroot, M., and Marschak, J. (1964). Measuring utility by a single response sequential method. Behavioral Science, 9(3), 226–236.Google Scholar
Brewers Association. (2018a). National Beer Sales & Production Data. Accessed October 1, 2018, https://www.brewersassociation.org/statistics/national-beer-sales-production-data/.Google Scholar
Brewers Association. (2018b). Brewers publications presents brewing eclectic IPA: Pushing the boundaries of India pale ale. Accessed May 14, 2018, https://www.brewersassociation.org/press-releases/brewers-publications-brewing-eclectic-ipa/.Google Scholar
Gustafson, C. R., Lybbert, T. J., and Sumner, D. A. (2016). Consumer sorting and hedonic valuation of wine attributes: Exploiting data from a field experiment. Agricultural Economics, 47(1), 91–103.Google Scholar
Heyman, J., and Ariely, D. (2004). Effort for payment: A tale of two markets. Psychological Science, 15(11), 787–793.Google Scholar
Levitt, S. D., and List, J. A. (2007). What do laboratory experiments measuring social preferences reveal about the real world? Journal of Economic Perspectives, 21(2), 153–174.Google Scholar
Smith, V. L., and Walker, J. M. (1993). Monetary rewards and decision cost in experimental economics. Economic Inquiry, 31(2), 245–261.Google Scholar