The market structure and recipes for beer has been rapidly changing with craft beers attracting more consumers. Perceived hops quality (hoppiness) is one of the main attributes that microbrewers alter to differentiate their products to satisfy consumers’ changing tastes and preferences. We hypothesize that, in addition to manipulating beer-processing conditions, the conditions under which the hops are grown may also influence the final sensory properties of the beer. Using hops from a field experiment coupled with sensory attributes and sociodemographic characteristics from a contingent valuation survey, we analyzed the impact of under-fertilized hop treatments during the growing season on consumers’ willingness to pay for beer. The results indicate that uninformed consumers in a blind tasting could identify the differences in beer made from hops across the fertilization treatments and, thus, implying that all else equal sufficient fertilizer is required to achieve satisfactory hoppiness for which consumers are willing to pay. (JEL Classifications: C91, D12, L66, Q11)

As microbrew beers have become more popular, the intrinsic characteristics of beer have become more important in consumer purchasing decisions. We identify sensory properties that influence consumers' willingness to pay for beer using a contingent valuation model that includes subjective sensory evaluations and socio-demographic characteristics of consumers. We find that overall taste and hoppiness of a beer have a significant and positive impact on willingness to pay.

We conducted a blind tasting sensory evaluation experiment and a chemical analysis of four craft hard apple ciders from the Pacific Northwest of the USA. Using the sensory and demographic data collected during the experiment, we estimated the consumer willingness-to-pay (WTP), using a contingent valuation model. Overall liking, taste, and aroma, from the sensory evaluation, as well as age of the sampler and if the sampler was a cider drinker, contributed positively to the WTP. In contrast, if the subject was a beer drinker this reduced their WTP. From the chemical analysis we found that tannin level had a positive effect on WTP, but an increased level of sweetness, as part of a ratio of specific gravity to acid, decreased consumer WTP. (JEL Classifications: C91, D12, L66, Q13)