Perceived Value of Precision Agriculture in the Vineyard: Combining the van Westendorp Pricing Analysis and Experimental Auctions

Abstract

The wine market is increasingly sensitive to sustainability issues, thus calling for the use of environment-friendly productive processes. What is the willingness of consumers to pay for such products? This work aims to investigate how consumers perceive the value of a “precision viticulture” with respect to Italian wine “Falanghina del Sannio” using a mix of hypothetical and real scenarios, that is, the hypothetical van Westendorp’s Price Sensitivity Meter (PSM) and real experimental auctions employing the Becker-deGroot-Marschak (BDM) mechanisms. The value of the attribute “precision viticulture” ranges between 19.86% and 24.51% (optimally 22.20%) of the total value of a hypothetical sustainable bottle of wine. In particular the attribute “precision viticulture” would maximize revenue if priced 2 Euros. A 1% increase in the price of the new wine associated with “precision viticulture” would lead to a 2.26% reduction in the quantity demanded. Finally, results suggest that the higher the value of a regular bottle of wine, the higher the consumer’s WTP for the “precision viticulture” attribute.