Does Expensive Beer Taste Better?

Some time ago, we discussed the economic principle behind charging more for a product as a "signifier" of quality. The case in that point was Rogue, who seems to charge more for their beer than other local brands. I was reminded of that discussion when I read a report about how it works for college pricing:

For liberal arts schools, tuition makes a big difference.

Traditional economics would suggest that raising the price of an item (such as a college education) would reduce demand for it. But instead this study found that raising tuition — as well as instructional expenditures — actually improves the demand to attend liberal arts schools and schools in the bottom half of the top 50. For example, for liberal arts colleges ranked 26th to 50th, a $1,000 increase in tuition and fees was associated with a 12.9-point increase in SAT scores and a 3.5 percent increase in the proportion of top freshmen admitted.

This is because such costs “serve as markers of institutional quality and prestige,” the authors write.

This got me thinking. Last night I sampled a Stumptown Tart (finally!). Stumptown is a part of BridgePort's "big brews" lineup and a 22-ounce bottle sells for a modest five bucks. This is comparable to Full Sail's"Brewmaster Reserve" lineup, but quite a lot cheaper than Deschutes "Reserve Series," where bottles regularly are priced at north of $10. And Deschutes is cheaper than other national micros that sell special beers for twenty backs or more.

Here's what's odd. Take these contrasting examples: BridgePort Raven Mad and Full Sail Black Gold Bourbon Imperial Stout on the one hand; Deschutes The Abyss and Allagash Interlude. All four are world-class beers, and all four have different price points. The Raven Mad is the cheapie in the group--five bucks. I can't recall exactly what I paid for the Full Sail, but it was between five and ten bucks. Abyss, when you can get it, generally runs about eleven or twelve bucks. And I paid something like twenty bucks for the Allagash when I was at the brewery last year.

Preferences vary, so calling these beers comparable will provoke dissent. (My least favorite among them is the Abyss, at least when it's less than two years old. Though after that....) Yet the Abyss has a kind of stature that compels people refer to it sotto voce, as if in a cathedral. It sells out almost before it hits the stores. Raven Mad, on the other hand, was on shelves forever (and at five bucks, I kept stocking up). What role did pricing have? Had BridgePort taken the same beer, bottled it in a jet black label with a name weighted with gravitas ("Molten" or "Chasm" or "Oracle"), and priced it at twelve bucks, would it now be selling on eBay for $112?

This is where signifiers seem very important. High-gravity beers are generally rated for the intensity. If you look at the big beer ratings on BeerAdvocate and Rate Beer, they're uniformly the highest scores. (Though BeerAdvocates raters are far more subtle and nuanced.) The intensity actually makes judgment more difficult: there's so many very strong flavors that you're left with an impressionistic reaction to the overall force of the beer. Factors a drinker might easily take in include bottle presentation and price. I wouldn't be at all surprised to learn that drinkers responded more positively to more expensive beer because, seeing the price, they assume it must be rarer and more sublime. As with liberal arts tuition, the way to sell expensive beer may be to make it more expensive.

(A final parenthetical. Wouldn't it be wonderful if a brewery secretly ran this experiment? Divide a batch of very good beer into two bottlings, one cheaper and more downscale-looking, one austere and expensive, and see which sells best? No brewery would risk this, because it's a PR catastrophe waiting to happen. But wouldn't it be fascinating?)