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American Economic Review Vol. 101 No. 3 2011

Wine Retail Price Dispersion in the United States: Searching for Expensive Wines?

David A. Jaeger1; Karl Storchmann2

1 Center for Macroeconomic Research, University of Cologne, Albertus-Magnus-Platz, 50923 Cologne, Germany, and CUNY Graduate Center. · 2 Economics Department, New York University, 19 W. 4th St., 6FL, New York, NY 10012.

Abstract

Similar to other markets in which deviations from Jevons' “law of one price” is the norm rather than the exception, the retail wine market in the United States is characterized by large price dispersions. Drawing on a large sample of retail prices from wine-searcher.com we find an average per-wine coefficient of variation of 23 percent. Some of this is due to differential market conditions, especially state regulations. Our evidence suggests that dispersion also depends positively on price levels, after controlling for consumer, market, and state heterogeneity.

DOI
10.1257/aer.101.3.136
Volume
101
Issue
3
Pages
136-141
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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