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Why you might like expensive beer more

Expensive beerNow some Monday afternoon musing (because I just came across this).

This is how the Times Online leads the story: “Restaurants charging inflated prices for wine could be doing their customers a favour. A study has found that people who pay more for a product do enjoy it more.”

This was in fact serious research at the California Institute of Technology in which scientists tested how marketing shapes consumers’ perceptions and whether it also enhances their enjoyment of a product.

They asked 21 volunteers to sample five different bottles of cabernet sauvignon and rate their taste preferences. Without telling the volunteers, the researchers presented two of the wines twice, once with the true price tag, and again with a fake one. They passed off a $90 bottle of cabernet sauvignon as a $10 bottle, and presented a $5 bottle as one worth $45.

Here’s the science part: The volunteers’ brains were scanned to monitor the neural activity in the medial orbitofrontal cortex – the area of the brain associated with decision-making and pleasure in terms of flavor. Researchers found “expensive” wines made the cortex more active.

Antonio Rangel, who led the research team, told the BBC News website that the experiment showed how “expectation can affect the actual encoding of the pleasantness of the experience.”

The BBC expanded on the story:

Wine expert Jancis Robinson says she was not surprised to see that the research was carried out in California.

She argues that American attitudes to wine can be very different to those of the British wine-buying public.

“At least seven years ago, I was told by a sommelier at a top restaurant in California that he couldn’t sell wine that was priced at under $100 at bottle,” she says. “He was able to sell the same wine when he raised the price to more than $100.”

And back to the Times Online:

Other researchers point out that the subjects in the study were not paying for the wine. The pleasure they derived from the belief that they were drinking expensive wine might have been diluted if they had been picking up the bill.

Scott Rick, a researcher in neuroeconomics at Carnegie Mellon University in Pittsburgh, Pennsylvania, said: “There are people who derive pleasure from spending, and those for whom it is painful. In a study of 13,000 people it emerged that 15% were spendthrifts to whom spending gave pleasure and 25% were tight-wads to whom it gave pain, and the remaining 60% fell in between the two.”

For the record, this is not why we should be paying more for some beers. We should because they are worth more (though not necessarily nine or ten fold more).

Your turn, Alan.

7 Responses to Why you might like expensive beer more

  1. Alan January 14, 2008 at 5:58 pm #

    Isn’t this merely scientific proof of the principle that there is a sucker born every minute?

    And I would see your “We should because they are worth more” and raise you “We should only when they are worth, in our personal estimation, relatively more compared to our other procurements and not when someone uses puff words like ‘character’ and ‘art.'”

  2. Stan Hieronymus January 14, 2008 at 6:42 pm #

    Alan, I’m OK with ““We should only when they are worth, in our personal estimation, relatively more compared to our other procurements.”

    But if I judge for myself that a beer has character then I’m going to pay more for it. I wouldn’t call it a puff word.

  3. Alan January 14, 2008 at 7:17 pm #

    Well, I mean “puff” as in puffery not in the journalistic “puff piece”. “Puff” is an entirely good legal term for pre-contractual communications never intended to be taken as representations: http://en.wikipedia.org/wiki/Puffery

    And (going on and on because I know we share this interest) I have no problem with anyone saying something has “character” but as that is a non-descriptive general phrase which really means “I like it because…umm…I like it.” After all “je ne sais quoi” just means I know not what but it’s still useful as it means you can’t yet put your finger on it. But “character can also have sort of a passive aggressive aspect, too, when used not as you describe but as in the phrase “people should learn to pay for character” that challenges you to accept something has a characteristic that you can’t see but they can which is in excess of your perceived estimation of its worth. The cousin of snobbery.

  4. Stan Hieronymus January 15, 2008 at 6:13 am #

    I think the issue is the difference between speaking in general and speaking specifically.

    When I write about an individual beer (say Cambridge Cerise Cassée if you pick up DRAFT) then I can write about what I perceive as character, and why it is there.

    But the character of Cerise Cassée si different than the character of Russian River Blind Pig IPA.

  5. Jeff January 15, 2008 at 6:17 am #

    While the discussion is interesting, I think the most important part of the story is being overlooked: “At least seven years ago, I was told by a sommelier at a top restaurant in California that he couldn’t sell wine that was priced at under $100 at bottle,” she says. “He was able to sell the same wine when he raised the price to more than $100.”

    People would rather drink an expensive wine than a cheap wine. It’s nothing more than a way to show one’s social status. Or, in my case, I don’t buy Natty Light but I wouldn’t hesitate for a moment to pick up the latest brew from Real Ale Brewing Company at twice the price.

    And it’s not like this is news. When I was in high school, Shiner Bock was a cheap beer sold mostly in cans. When the current owners took over the brewery the first thing they did was raise the price to match premium beers, and switch over to Longnecks. Sales went up.

  6. Stan Hieronymus January 15, 2008 at 6:27 am #

    Jeff – I thought the comments from Jancis Robinson and the neuroeconomics were both telling.

    One about spending as a manner of showing off, the other about how the acting of spending brings pleasure to some and pain to others.

    I’m probably not in the 25% tight-wad group (though some would disagree) but I do think before I spend. Beer makes a much better fit than wine.

  7. Alan January 15, 2008 at 9:09 am #

    Jeff, that is right [and it is also right to dissuade Stan and I from our generic theme #1 discussion ;-)]. Once as a young lawyer I was dscribing to a more senior guy from another firm how a client was not taking my advice and he said to fix that I should charge more.

    Generally, people like to think they are getting something more than they are getting and are even willing to pay for it to provide themselves with the proof.

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