Market Penetration of Imported Agricultural Products: A Hedonic Analysis of the Japanese Table Wine Market

42 Pages Posted: 9 Sep 2014

See all articles by Vincent Hoang

Vincent Hoang

Queensland University of Technology

Takao Iida

Sapporo University

Shigeru Matsumoto

Tokyo Center for Economic Research (TCER)

Natsuki Watanabe

University of Tokyo

Clevo Wilson

Queensland University of Technology

Date Written: September 1, 2014

Abstract

Although hundreds of thousands of agricultural products are traded on a daily basis, it is less known how imported agricultural products gain consumer acceptance and penetrate a domestic market. This paper analyzes Japanese wine point of sale (POS) data and examines how consumer valuation of imported wines changes with their market penetration. Although there is a considerable variation in sales of wines, previous papers have not accounted for it in their hedonic analyses. The wine hedonic analysis accounted for the variation in sales shows that the retail sales prices of imported wine decreases with their market penetration. The analysis also shows that although consumers pay a premium for wine with a long sales history, this premium is not large enough to compensate for the price reduction brought about by sales expansion. Many exporting counties promote organic farming for environmental conservation. The paper further examines whether consumers in an importing country differentiate between local and imported organic products. The result shows that the premium for imported organic red (white) wines is about 42.996% (8.872%) while that for domestic red (white) organic wines is about 6.440% (1.214%), implying that Japanese consumers pay higher premiums for imported organic agricultural products than for those produced in Japan.

Suggested Citation

Hoang, Vincent and Iida, Takao and Matsumoto, Shigeru and Watanabe, Natsuki and Wilson, Clevo, Market Penetration of Imported Agricultural Products: A Hedonic Analysis of the Japanese Table Wine Market (September 1, 2014). Tokyo Center for Economic Research (TCER) Paper No. E-83, Available at SSRN: https://ssrn.com/abstract=2493621

Vincent Hoang

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia
+61 7 331 84325 (Phone)
+61 31381500 (Fax)

Takao Iida

Sapporo University ( email )

United States

Shigeru Matsumoto (Contact Author)

Tokyo Center for Economic Research (TCER) ( email )

Sankyo Building
Room 703, Main Building
Chiyoda-ku, Tokyo, 1-7-10
Japan

Natsuki Watanabe

University of Tokyo ( email )

Yayoi 1-1-1
Bunkyo-ku
Tokyo, Tokyo 113-8657
Japan

Clevo Wilson

Queensland University of Technology ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

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