Status, image and customer satisfaction
- According to research by Chistian Barrere, Veronique Chossat and Florine Livat, prices for Parisian meals defined by the Michelin guide as "very comfortable" to "luxury" rose 217% in real terms, while nonluxury food became cheaper during that period.
- Researchers Olivier Gergaud and Vincenzo Verardi created a value index of Parisian food, which compares price with customer satisfaction as measured by the Parisian Zagat Survey. Many prestigious restaurants faired badly.
- Research by Sebastian Lecocq and Michael Visser finds that wine consumers pay similar premiums for status and prestige. Their study of Bordeaux and Burgundy vintages found that prices reflect professional ratings and label information more than customer satisfaction (as measured by subjective taste tests).
These studies seem to show that expert opinion correlates with price more than consumer opinion. This probably means that, from a taste perspective, it doesn't sense for an average guy like myself to stock up on Chateau Mouton-Rothschild. But if you happen to have "expert" taste buds, it may be worth it to spend the extra money. Alternatively, some people undoubtedly go to fancy restaurants and by expensive wines precisely for the prestige and image.
By the way, the wine research appeared in the brand spankin’ new Journal of Wine Economics. Cool, an entire journal devoted to the allocation of scarce wine resources (hopefully bearing in mind that "There ain’t no such thing as a free lunch")!