This paper investigates the determinants of home bias in consumption in the beer and wine markets across 15 ‘old’ member states of the European Union (EU) during the period 2000-2009. Two main results are obtained using a theory-driven gravity equation . Firstly, the home bias in beer consumption is several orders of magnitude higher than that of wine. Secondly, and interestingly, consumer preferences seem to be driving the home bias in the wine sector. In contrast, the home bias in beer is widely attributable to the home market effect, namely firms tend to localize near the consumers in order to minimize the high trade costs associated with beer exports.

Home bias in consumption : A comparison between wine and beer / A. Olper, D. Curzi, D.G. Frisio, V. Raimondi. - In: GERMAN JOURNAL OF AGRICULTURAL ECONOMICS. - ISSN 2191-4028. - 61:4(2012 Nov), pp. 223-234. ((Intervento presentato al 2. convegno Beeronomics conference tenutosi a Munich nel 2011.

Home bias in consumption : A comparison between wine and beer

A. Olper
Primo
;
D. Curzi
Secondo
;
D.G. Frisio
Penultimo
;
V. Raimondi
Ultimo
2012

Abstract

This paper investigates the determinants of home bias in consumption in the beer and wine markets across 15 ‘old’ member states of the European Union (EU) during the period 2000-2009. Two main results are obtained using a theory-driven gravity equation . Firstly, the home bias in beer consumption is several orders of magnitude higher than that of wine. Secondly, and interestingly, consumer preferences seem to be driving the home bias in the wine sector. In contrast, the home bias in beer is widely attributable to the home market effect, namely firms tend to localize near the consumers in order to minimize the high trade costs associated with beer exports.
border effect; home market effect; preferences; wine and beer trade
Settore AGR/01 - Economia ed Estimo Rurale
Settore SECS-P/02 - Politica Economica
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/221900
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