4.5 Article

Price determinants in top-quality e-auctioned specialty coffees

Journal

AGRICULTURAL ECONOMICS
Volume 38, Issue 3, Pages 267-276

Publisher

WILEY
DOI: 10.1111/j.1574-0862.2008.00298.x

Keywords

specialty coffee; hedonic price analysis; differentiated food pricing; sensory attributes; reputation attributes

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We analyze the price determinants of specialty coffees traded at e-auctions. We hypothesize that since specialty coffees are a highly differentiated product, prices will be determined by both sensory and reputation attributes. To test our hypotheses, we estimate a hedonic price function using data from Central and South American e-auctions and calculate the implicit prices of sensory and reputation attributes. The results show that market clearing prices are a function of sensory characteristics and reputation variables including third-party quality ranking, country of origin, coffee variety, and quantity. The additional attribute information disclosed at e-auctions results in substantially higher prices relative to conventional commodity coffee market prices.

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