How Taste Quality and Roast Level Affect Coffee Prices

Abstract Research on the determinants of coffee prices is scarce. In this study, we examine how coffee prices are associated with two key coffee attributes – taste quality and roast level – within a price hedonic framework. We report three main findings. First, taste quality has a positive but non-linear effect on price: Among coffee types below the threshold for superior quality, an additional quality point has only a modest effect, whereas among superior-quality coffees, the same increase in quality results in a substantially larger price premium. Second, roast level has a positive and roughly linear effect on price, indicating that lighter roasts are more expensive than darker ones. Third, both the non-linear quality effect and the linear roast-level effect vary across the coffee price distribution, with substantially larger effects among the most expensive coffees than among the least expensive. Although these findings show how quality and roast level shape price formation in the specialty coffee market, their novel character also suggests that more research is needed on the determinants of coffee prices.