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Vintners quality alliance and the demand for British Columbia wine Rabkin, Danielle

Abstract

The Vintners Quality Alliance (VQA) program was established in British Columbia in 1990 in response to a series of trade agreements that opened the BC wine market to direct foreign competition. The VQA program aimed at improving the quality of British Columbia produced wines by outlining standards and regulations for wine produced from 100% BC grown grapes. Wine sales in British Columbia are rapidly increasing with domestically produced Canadian wines’ having the largest market share. This research examines consumers’ valuation of VQA certification using a hedonic price analysis. Results show that consumers are willing to pay a premium for VQA red and white wines however a quantile regression reveals that VQA certification is less important for high-priced wines, while the premium is largest for low priced wines. An almost ideal demand system for British Columbia VQA and non-VQA wine is estimated and own- and cross-price elasticities are calculated and discussed.

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