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

AAWE Working Paper No. 86 – Economics


Does the bottle size matter? An investigation into
differences between posted and market prices

J. François Outreville


What determines wine prices? The question is obviously not new but the most recent papers dealing with this subject tend to go beyond a simple competitive market where the prices are the result of supply and demand. There is more than the price of wine in a bottle. The decision to market wine in a different bottle size is considered to have more to do with the judgment of taste and the feeling of pleasure than other factors. Does size matter? In this short paper we investigate the relationship between price and the size of the bottle for the same wine. We find that in the case of Champagne, the posted price of wine increases more than proportionally with the size of the bottle. However, this result does not fully hold for Bordeaux wines when we consider auction prices for large bottles.

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