A Hedonic Price Analysis of GrapeWines fromNashik & Pune Districts inMaharashtra, India

Abstract

A good product can be considered as bundle of different characteristics/ attributes. Differentiated products attract a wide range of prices in the competitive market like grape wines from Nashik and Pune District of State of Maharashtra which is a subject for hedonic pricing analysis. Grape Wines from these regions are considered for such an analysis because the wine industry in this region is young and it is still unknown that what affects the price. In the effort to create new opportunities to the grape producers in India and specifically in the State of Maharashtra, The Govt. of India and the Govt. of Maharashtra have amended the concerned laws related to wine production helping the existing and new wine producers. During the last few years the wine market is changing dramatically. Wine consumption is increasing in our country that historically did not have any tradition to drink grape wine. Accordingly, new wineries and vineyards are established around the grape producing areas. Grape supplies which are key raw material for wineries, holding up their cyclical process of shortages and surplus. At the same time more new wine products have appeared. This article reports results from hedonic price analysis of wines from Nashik and Pune Districts. The study which is based on primary and secondary data sources as well, finds significant price premiums and discounts for different explanatory variables such as label information, bottle closure and presence and absence of front label information, maturation of wine, grape varietal, etc. which give potential entrepreneurs some valuable strategic insights about grape wine products and their pricing to match expectations for different price tiers.