Abstract:
This paper adopts the hedonic price model to study the impact of attributes on beer prices in the U.S. beer market. The price of beer is modeled as a function of beer characteristics. Our primary purpose is to investigate the attributes that lead to premium beer prices. Understanding factors that influence the price of a particular commodity like beer provides important insights into price determination and the strategic interaction among firms. We hypothesize that beer prices are influenced by both physical and reputation attributes because beer is a highly differentiated product. Results show that consumers put a premium on the country of origin label as well as other characteristics of beer
