Department of Agricultural and Resource Economics
Expert Opinion and the Demand for Experience Goods: An Experimental Approach in the Retail Wine Market
- Author(s): Hilger, James
- Rafert, Greg
- Villas-Boas, Sofia B
- et al.
The effect of expert opinion on demand for experience goods is difficult to quantify, as the relationship between purchases and reviews may be driven by product quality. Further, it is unclear whether a review-based demand effect is due to providing quality or existence information. Utilizing a retail field experiment to overcome these obstacles, we find a significant positive average consumer response to expert opinion labels for wine. Demand decreases for low scoring wines and demand increases for wines scoring average or higher. Results indicate that expert opinion labels transmit quality information as opposed to solely shelf visibility.