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Drink Beer for Science: An Experiment on Consumer Preferences for Local Craft Beer

Published online by Cambridge University Press:  20 November 2018

Jarrett Hart
Jarrett Hart*
Affiliation:
Department of Agricultural and Resource Economics, University of California-Davis, One Shields Avenue, Davis, CA 95616; e-mail: jdhart@ucdavis.edu.
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Abstract

The U.S. and global beer industries include a great many smaller-scale craft breweries supplying numerous differentiated products as well as a few macro-breweries with less diverse beer portfolios. The craft and macro segments of this industry have become quite distinct, with little substitutability between the two types of beer. Furthermore, since the early 2000s the craft segment has realized consistent growth whereas large breweries have seen a steady decline in sales. Macro-breweries have responded by acquiring smaller breweries to capture a share of the craft market. This study implements an experimental approach to measure consumers’ willingness to pay (WTP) for locally produced and independently owned beer. Regression analysis clearly indicates that consumers prefer locally owned and independently produced beer, and how much they are willing to pay for those attributes. (JEL Classifications: D12, L66)

Keywords

acquisitionbeercraftlocalWTP
Type
Articles
Information
Journal of Wine Economics , Volume 13 , Issue 4 , November 2018 , pp. 429 - 441
Copyright
Copyright © American Association of Wine Economists 2018 

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Footnotes

I am grateful to an anonymous reviewer for his/her expeditious review. I also thank Julian Alston, Kevin Novan, Charles Bamforth, Aaron Smith, and participants of the 12th Annual AAWE Conference in Ithaca, NY, for their comments and support.

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