The implicit value of chemical and sensorial quality in the hedonic analysis of low-priced Italian red wines

The hedonic price analysis presented in this paper is carried out on a dataset containing observable, sensory and chemical characteristics of a sample of low-priced Italian red wines. The study starts for the commonly observed evidence that in general the market price can be explained by the objective characteristics appearing on the label of the bottle and not by the wine's quality. The aim of the analysis is to discover how quality matters. The objective is pursued by means of the construction of latent sensorial and chemical factors, whose implicit price, quantified using Random Forest variable importance measures, turns out to be appreciably high.