Introduction to the Issue
(FULL TEXT PDF)
This issue of the Journal of Wine Economics opens with a paper by Magali Delmas, Olivier Gergaud, and Jinghui Lim entitled “Does Organic Wine Taste Better? An Analysis of Experts’ Ratings” (Delmas, Gergaud, and Lim, 2016). They analyze whether ecocertified wines are of better quality than their conventional counterparts by drawing on data for more than 74,000 Californian wines produced by 3,842 win- eries between 1998 to 2009. The authors refer to scaled scores of Wine Advocate, Wine Enthusiast, and Wine Spectator and find that ecocertified wines exhibit statisti- cally significantly higher quality ratings than their non-certified wines.
In the next paper, Eric Le Fur, Hachmi Ben Ameur, and Benoit Faye examine “Time-Varying Risk Premiums in the Framework of Wine Investment” (Le Fur et al., 2016). They analyze the volatility of fine wine prices for growths from various regions during the financial crisis and non-crisis time periods. Employing a conditional capital asset pricing model and a multivariate generalized autoregres- sive conditional heteroskedasticity model they find that fine wines from Bordeaux, and to some extent also from Burgundy, were more volatile during the financial crisis and less so in non-crisis periods. In contrast, fine wines from Australia, Italy, and the U.S. exhibit volatility trends that are inverse to French wines.
The third paper of this issue deals with “The Political and Economic History of Vineyard Planting Rights in Europe: From Montesquieu to the European Union” (Meloni and Swinnen, 2016). Against the background of the ongoing vineyard planting rights discussion in the European Union, Giulia Meloni and Johan Swinnen report that the French political philosopher and landowner Montesquieu complained to the French king about the prohibition on planting new vines as early as 1726. “Old and recent history suggests that political forces against the liber- alization of planting rights are very strong. Only the French Revolution in 1789 led to a fundamental liberalization of planting rights.” The current relaxation of the European vineyard planting regulation stipulates that new plantings must not exceed 1% of a Member State’s existing vineyard area, a rate that may not be suffi- cient to meet future challenges such as increasing global temperatures or global com- petition. Will we need another “French Revolution”?
In her paper “Demand for Wine and Alcoholic Beverages in the European Union: A Monolithic Market?” Lorraine Mitchell analyzes consumption patterns for wine, beer and spirits in all EU countries (Mitchell, 2016). She employs a first-differences linear almost ideal demand system model (L-AIDS) to identify four separate subgroups within the EU with different characteristics and calculates wine, beer and spirits price and income elasticities for each country. She finds that “changing tastes over time turn out to be important in determining demand.”
The last paper of this issue deals with “Beer-Purchasing Behavior, Dietary Quality, and Health Outcomes among U.S. Adults” (Volpe et al., 2016). Richard Volpe, Michael McCullough, Michael K. Adjemian, and Timothy Park draw on IRI house- hold- and individual-level data sets to examine the relationships between heart disease and type 2 diabetes with alcohol consumption. After controlling for various potentially confounding variables such as diet quality and lifestyle choices, their results suggest that most alcohol types could have protective effects against heart disease and diabetes. The analysis finds the strongest positive effects occurring for craft beer and wine. Another conclusion of this paper is that “treating beer as a single, homogenous category in health studies likely leads to measurement error.”
New York University
Does Organic Wine Taste Better? An Analysis of Experts Ratings
(FULL TEXT PDF)
Magali A. Delmas, Olivier Gergaud & Jinghui Lim
Ecolabels are part of a new wave of environmental policy that emphasizes information disclo- sure as a tool to induce environmentally friendly behavior by both firms and consumers. Little consensus exists as to whether ecocertified products are actually better than their conventional counterparts. This study seeks to understand the link between ecocertification and product quality. We use data from three leading wine-rating publications (the Wine Advocate, Wine Enthusiast, and Wine Spectator) to assess quality for 74,148 wines produced in California between 1998 and 2009. Our results indicate that ecocertification is associated with a statisti- cally significant increase in wine quality rating. Being ecocertified increases the scaled score of the wine by 4.1 points on average. (JEL Classifications: L15, L66, Q13, Q21, Q56)
Time-Varying Risk Premiums in the Framework of Wine Investment
Eric Le Fur, Hachmi Ben Ameur & Benoit Faye
The Political and Economic History of Vineyard Planting Rights in Europe: From Montesquieu to the European Union
(FULL TEXT PDF)
Giulia Meloni & Johan Swinnen
In 2008, the European Union (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 rights system was overturned in 2013, and new regulations could create an even more restrictive system. European wine associations have 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 system of 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 nineteenth century was sustained by the combination of the French Revolution’s liberal ideology, the thirst of Napoleon’s armies for wine, 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, to travel, and to spend time thinking, dis- cussing, and ultimately writing up his ideas that influenced much of the Western world’s con- stitutions. (JEL Classifications: K23, L51, N43, N54, Q18)
Demand for Wine and Alcoholic Beverages in the European Union-A Monolithic Market?
Beer-Purchasing Behavior, Dietary Quality, and Health Outcomes among US Adults
Richard Volpe, Michael McCullough, Michael K. Adjemian & Timothy Park
HENRY H. WORK
Wood, Whiskey and Wine: A History of Barrels
Reviewed by Nick Vink
Pages 465 – 466
MARK E. RICARDO
Simply Burgundy: A Practical Guide to Understanding the Wines of Burgundy
Reviewed by Christian G.E. Schiller
Pages 466 – 469
Shadows in the Vineyard: The True Story of the Plot to Poison the World’s Greatest Wine
Reviewed by Neal D. Hulkower
Pages 469 – 471
MARA P. SQUICCIARINI & JOHAN SWINNEN
The Economics of Chocolate
Reviewed by Howard-Yana Shapiro
Pages 471 – 475
JEFFREY L. LAMY
The Business of Wine Making
Reviewed by Karl Storchmann
Pages 476 – 478