Hedonic price analysis of Central American specialty coffee auctions from 2016 to 2024

Resumen

This study analyzes the factors that determine the price per pound of coffee in the Cup of Excellence® auctions across five Central American countries during the period 2016– 2024. A hedonic pricing model was applied to estimate the effect of variables such as variety, quality score, processing method, producing country, and year of participation on the final price. The estimated model explained 66.8% of the variability in the logarithmic price per pound. The results indicate that a higher cupping score significantly increases the price per pound by 35.80%. Geisha coffee showed the smallest decrease of 0.90% in price compared to the reference variety (Bourbon). Regarding processing methods, natural processing showed the smallest price reduction of 4.40%, while washed and honey processing reflected larger decreases. Guatemala stood out with a 41.20% price increase compared to El Salvador, while Nicaragua showed a reduction of 10.60%. The study also found an upward trend in prices over time, with an average annual increase of 1.11%. It is concluded that the perceived quality of coffee, measured by attributes such as cupping score and country of origin, significantly influences price formation in the specialty coffee market and contributes to narrowing an academic gap on the subject.