CONICET | Buscador de Institutos y Recursos Humanos

PurposeThe purpose of the study sought toinvestigate micro determinants for dynamic wine pricing in Argentina. We testwhether attributes and time affect the price rate of change. The rate of changeis selected given the inflationary context of the country. The analysisprovides valuable information for wine marketing decisions.Design/methodology/approachThe modeling approach relies on panel dataanalysis for exploiting the data cross-section and time dimension. Thecontribution explores a massive price dataset at a weekly frequency. Thedependent variable is the weekly price variation rate for product/wine and ascovariates are attributes, time, and nominal variables. Given that endogeneityissues arose, the estimations rely on a two-stage least squares andinstrumental variables with cluster-robust errors.FindingsEstimations show that attributes, time, andcost variables are statistically significant, with clear seasonal patterns andquality segmentation affecting pricing: wines made out of specific grapes suchas Chenin, Merlot, and Seedling or composing a broad category such as red wine,exhibit price undershooting (price rate of change below average). On the otherhand, wines out of grapes such as Bonarda, Margaux, Mistela, Moscatel, Oporto,Tannat, and Sauvignon Blanc show price overshooting (rate of change aboveaverage). In summary, wine made from determined grapes and specific wineriesshow divergent pricing.Research limitations/implicationsCovariates such as alcohol content, labeldescriptor information, winery history, substitute competition, and vintage,among others, have not been considered given that the research analyzes morethan 750 wine products. Another limitation is that the work does not exploremany time-series covariates, such as promotions and idiosyncratic shocks. Practical implicationsThe contribution presents new information on winepricing patterns affected by weeks, months, and years, including the effect ofthe prolonged 2020 Argentine lockdown. It also analyzes estimations on pricingat the level of grape/blend and wineries previously unknown in this market. Theinformation can influence inventory decisions on the side of the sellers andpurchase decisions on the side of consumers. Social implicationsThe analysis includes fine but also low-cost wines thatform part of the diet of low-income families in the country. The work detects adivergent pattern in pricing divided by the quality/price of the wine. It alsopresents information on price timing that may help consumers in the best momentto buy.Originality/valueThe contributionanalyzes unprecedented information on weekly wine prices and presents evidenceof pricing tactics from a point-of-sale perspective: It identifies differentadjustment speeds related to product features and time effects.

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