AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

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The Mendoza 2015 Conference Poster

The Mendoza 2015 Conference Poster

Artwork: www.renatawur.com Download the Poster here: AAWE-Poster-2015

AAWE Working Paper No. 178 – Economics

AAWE Working Paper No. 178 – Economics

Women are a powerful economic force in the world’s wine market, with marketing of wines made by women to female consumers increasingly important. It is widely assumed that women winemakers in California have shattered the glass ceiling, but few studies have addressed their progress in what remains a male-dominated field. This paper reports on three separate studies assessing their progress. Study 1 assessed the perception that women winemakers have shattered the glass ceiling. Results showed that only 9.8% of California wineries have a woman as the lead winemaker, illuminating a discrepancy between perception and fact. Study 2 investigated whether winery acclaim was associated with this discrepancy. Coding of winery data in Opus Vino (2010) provided support for the hypothesis of proportionally greater acclaim for wineries having women as their lead winemakers. Study 3 tested the hypothesis that the recent increased recognition and visibility received by lead women winemakers is opening doors for other well-qualified women. Using the wineries included in Wine Spectator’s California Wine (1999) for a case study, the same set of major wineries was investigated at two times—1999 and 2014. Two approaches were taken to assessing progress: comparing the percentage of wineries with lead women winemakers at both times, and comparing the percentage, taking into account position availability and pattern of gender hiring into available positions. Results showed some increase, 10% in 1999 to 14.7% in 2014 overall, and 20.5% when considering only available positions. Progress appears steady but slow.

AAWE Working Paper No. 177 – Business

AAWE Working Paper No. 177 – Business

This document presents the current state of the brewing industry in Latin America with special attention given to micro brewing firms. We find that the market conditions in Latin America are favorable to significant growth in the brewing industry and particularly for craft and specialty beers. This study draws on a general overview of the industry in the region as well on five different countries.

AAWE Working Paper No. 176 – Economics

AAWE Working Paper No. 176 – Economics

In 2008, the EU voted to liberalize its system of planting rights which has strictly regulated vine plantings in the EU. However, after an intense lobbying campaign the liberalization of the planting right system was overturned in 2013 and new regulations created an even more restrictive system. European wine associations complained about the detrimental effects of the new regulations. There is a precedent in history. In 1726, the French political philosopher and landowner Montesquieu complained to the French King about the prohibition on planting new vines. Montesquieu was not successful in his demands to remove the planting rights. Old and recent history suggests that political forces against liberalization of planting rights are very strong. Only the French Revolution in 1789 led to a fundamental liberalization of planting rights. The “liberal period” of the 19th century was sustained by the combination of the French Revolution’s liberal ideology, the thirst for wine of Napoleon’s armies and diseases that wiped out most of the French vineyards.
That said, in the past and the present, enforcement of planting rights is a major problem. In fact, despite the official restrictions, Montesquieu managed to plant his vines, allowing him to become a successful wine producer and merchant and to travel and to spend time thinking, discussing and ultimately writing up his ideas which influenced much of the Western world’s constitutions.

AAWE Working Paper No. 175 – Business

AAWE Working Paper No. 175 – Business

Research by many scholars studying consumer behavior has determined that choice overload can be a demotivating characteristic for consumers faced with a broad array of options. However this has yet to be studied at the wine retail level. Wine is unlike most consumer goods due to the large number of intrinsic characteristics relative to extrinsic ones, and the sheer number of choices in the category a consumer must choose from. Also salient is the general concept that as a wine consumer grows in experience they desire a broader range of choices.

A three-part study was designed to test for the existence of the choice overload effect: first a qualitative survey was sent to 4000 wine consumers (from a retailer’s email database) in order to establish a baseline of self- reported behavior in a wine shop environment. Next over 100 customers were observed as they shopped in a group of wine stores. Finally those same customers were interviewed post-purchase about their satisfaction with the wines they purchased.

Analysis of the data generated showed no evidence of the choice overload effect in any of the three phases of the study. An examination of how this retailer was able to mitigate and even eliminate the impact of choice overload was discussed, and points to future research in this field.Drowning in the Wine Lake:
Does Choice Overload Exist in Wine Retail?

Mendoza 2015

Mendoza 2015

Information regarding the 9th Annual Conference of the American Association of Wine Economists AAWE in Mendoza (May 26-30, 2015). The first specimens of Vitis vinifera were introduced in Argentina by Spanish colonists in the 16th century. The soil and weather conditions favored the growth of the Vitis vinifera, especially in regions in the vicinity of…

AAWE Working Paper No. 174 – Economics

AAWE Working Paper No. 174 – Economics

Despite the growing importance of geographical indications (GI) for wines, cheeses, etc., relatively little attention has been devoted to studying the optimal size of a GI region, as well as how lobbying by interest groups may affect the actual size. We develop a political economy model of the size of geographical indications, taking into account possible effects on perceived quality as well as on cost sharing among producers. We show that the political process may result in a GI area that is smaller or larger than the social optimum, not just depending on the relative political influence of existing and potential producers, but also on how changes in quality affect consumer welfare.

AAWE Working Paper No. 173 – Economics

AAWE Working Paper No. 173 – Economics

The United States and the European Union (EU) have embarked on ambitious negotiations to create a comprehensive free trade agreement known as the Transatlantic Trade and Investment Partnership (TTIP). Agricultural markets receive relatively high levels of support and protection in both regions, and therefore are sensitive to the discussions surrounding the TTIP. Wine is the highest valued agricultural product traded between the United States and the EU, and any reduction in trade barriers resulting from the TTIP has the capacity to generate additional trade in this sector. We carefully develop parameters to characterize the effects of tariffs and domestic regulations that affect production and consumption of wine in these two regions. Results show that reductions in tariffs would have relatively small effects in these wine markets, whereas reductions in EU domestic policies that affect wine grape production would have much larger trade and welfare implications.

AAWE Working Paper No. 172 – Economics

AAWE Working Paper No. 172 – Economics

From nuclear power to food safety, many regulations mandate that government employees inspect economic entities on a regular basis. Such an inspection introduces a classical double-moral-hazard problem: on the inspector side, government employed inspectors may not detect or report every violation as the principal desires; on the inspectee side, regulated firms may not comply with every rule set by the principal; their degree of compliance depends on the inspector’s ability to detect violations and the subsequent punishment for reported violations. Many a suggestions have been made to alleviate the inspector moral hazard, including outcome-based contracts,1 targeted auditing, reduction of information rents, high penalties for corrupt inspectors, or intentional selection of biased employees.2 However, these “optimal” solutions – often made in a theoretical framework – are difficult to implement in reality because bureaucratic agencies are subject to rigid compensation schemes and limited resources.

AAWE Working Paper No. 171 – Economics

AAWE Working Paper No. 171 – Economics

Firms are inspected on a regular basis when their products or production processes involve potential environmental, public health, or safety hazards. However, little is known of the effectiveness of such inspections, mainly because inspection outcomes, which are often reported in terms of the number of violations, reflect both detection and compliance. While efforts to detect violations are costly, this detection is never perfect, and separating detection from compliance poses a real empirical challenge. In this article, we overcome this problem by exploiting a change in detection technology for restaurant hygiene inspections in Florida.

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