When cultural style outweighs territorial origin: evidence on origin premiums in the rum market

This paper examines whether cultural origin can sustain price premiums independently of institutional certification in spirits pricing. Using a dataset of 4,048 rums from the RumX platform, we employ a layered hedonic approach introducing intrinsic attributes (age, distillation method, raw materials, ABV, packaging), community ratings, and organoleptic perceptions, before adding origin signals across three geographical scales: cultural style (French, English, Spanish), country, and distillery. Hierarchical fixed effects and Ridge regression isolate direct and interaction effects of each layer. Unsupervised Finite Mixture Model clustering validates the cultural taxonomy, recovering latent segments consistent with cultural categories. Results show that cultural style generates significant specific price premiums, outweighing sub-national geographical layers, particularly for French and English styles. Cultural style, derived from the country’s official language, is quasi-exogenous, and its premium survives attribute controls, confirming genuine consumer valuation of symbolic origin rather than correlated production choices. These findings indicate that origin-based price premiums do not rest exclusively on formal certification: cultural style, a broad, legible provenance signal, sustains premiums even where formal certification is limited or absent. Expanding formal geographical-indication schemes may therefore carry risks of rigidity and proliferation without being a prerequisite for origin premiums, a consideration for the design of such schemes.