Semiparametric versus parametric hedonic wine price models: an empirical investigation

Abstract

In this article, we conduct formal statistical tests to compare a semiparametric hedonic wine price model with its parametric counterpart using a Canadian data set. The relevant test results turn out to be overwhelmingly in favour of the semiparametric specification. The estimated semiparametric model also provides clear evidence of nonlinearity between wine prices and quality when other wine attributes are controlled for.