Does living close to a vineyard increase the willingness-to-pay for organic and local wine?

Abstract

This paper investigates how the residents of a French wine-producing region value the attributes of wine. We elicit the willingness-to-pay for organic/non-organic and local/nonlocal wines when providing different informations about the impacts of agricultural practices. Organic and local premiums are estimated using robust M-regressions with clustered standard errors. The analysis shows that there is a significant organic premium associated with local and non-local wines, increasing with information level and decreasing with distance between participants’ dwellings and vineyards. We also ran some policy simulations to compare the welfare effects of regulatory instruments aimed at internalizing the attributes valued by consumers in possession of information.

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