Increase Profit Margins for Bulls**t?

Set higher profit margins on items for which shoppers find higher value. It’s a fundamental rule of behavioral economics. Yet, does that apply when the additional value attributed has no objective rationale?
     Researchers from Stanford University and Emory University analyzed the attributed value and objective quality of wines produced under organic or biodynamic standards in France’s Alsace region.
     Organic winemaking means using minimal chemicals and allowing the soil to replenish nutrients naturally. Organic winemaking is defined by what not to do.
     Biodynamic vintners instead say what to do, and some of the instructions are out of the ordinary: Bury in the vineyards cow horns filled with the manure of lactating cows. (Okay, so it’s cow s**t, not bulls**t, but I figured my title for this post captured the flavor well enough.)
     The horns go into the soil on the autumnal equinox, and they are removed on the first day of spring. Next you combine cured manure with water and spray the mixture on the vines.
     There’s more, involving phases of the moon, a stag’s bladder, yarrow flowers, and valerian flower juice. Biodynamic winemaking standards were articulated in 1924 by Rudolph Steiner, who a couple of years earlier had laid out the rationale for the Waldorf principles of children’s education.
     Is biodynamic wine any better than organic wine? Is there an advantage that would allow a wine retailer to set a higher profit margin on a biodynamic swig?
     The Stanford/Emory researchers report that in the prestigious Robert Parker’s Wine Buyer’s Guide ratings of the top ten Alsace wines, six were biodynamic and only two were organic. When tasters saw a label indicating organic or biodynamic, the biodynamic wines prevailed.
     In blind taste tests, though, the results were mixed. The perceived advantage may be illusory.
     Still, illusion is of value, so a biodynamic certification might rightfully command an additional price. And that’s where the tale takes another twist. Biodynamic wines do not yield significantly higher profits at retail than organic wines. The researchers found the biodynamic vintners have been reluctant to label their wines as such. One is quoted as saying, “Come to me because I have good products and, on top of that, I'll give you a present: They're biodynamic.”
     Or perhaps there’s another explanation for the reluctance to label with a biodynamic certification: Considering the distinctive cultivation measures, would the labeling need to include an E. coli warning?

Click below for more: 
Use Value Added by Third-Party Certifications 
Level with Clients about Placebos