Journal of Wine Economics
Volume 3 | 2008 | No. 1
Do More Expensive Wines Taste Better?
Evidence from a Large Sample of Blind Tastings (FULL TEXT PDF)
Robin Goldstein, Johan Almenberg, Anna Dreber, John W. Emerson, Alexis Herschkowitsch, and Jacob Katz
ABSTRACT | Pages 1-9
Individuals who are unaware of the price do not derive more enjoyment from more expensive wine. In a sample of more than 6,000 blind tastings, we find that the correlation between price and overall rating is small and negative, suggesting that individuals on average enjoy more expensive wines slightly less. For individuals with wine training, however, we find indications of a non-negative relationship between price and enjoyment. Our results are robust to the inclusion of individual fixed effects, and are not driven by outliers: when omitting the top and bottom deciles of the price distribution, our qualitative results are strengthened, and the statistical significance is improved further. These findings suggest that non-expert wine consumers should not anticipate greater enjoyment of the intrinsic qualities of a wine simply because it is expensive or is appreciated by experts.
Consumer Sensory Evaluations of Wine Quality:
The Respective Influence of Price and Country of Origin
Roberta Veale and Pascale Quester
ABSTRACT | Pages 10-29
The purpose of the study was to investigate the respective influences of price and country of origin as extrinsic cues on consumer evaluations of wine quality when all intrinsic cues are experienced through sensory perception. Taste testing experiments were conducted (N =263) using Chardonnay as the test product and a 3 (country of origin, COO) x 3 (price) x 3 (acid level) conjoint analysis fractional factorial design. Price and COO were both found to be more important contributors to perception of wine quality than taste. Reliance on extrinsic cues was found to remain extremely robust even when all intrinsic cues were available through sensory experience for respondent evaluation. T he research demonstrated that even when evaluating a product through consumption, consumer belief in the price/value schema dominates quality assessment. These findings mean that marketers cannot assume that intrinsic product attributes, even when experienced, will be weighted and interpreted accurately by consumers. The research significantly advances our understanding of consumers’ use of extrinsic cues (price and COO specifically), and their respective influence in their determination of both expected and experienced quality.
Analyzing Wine Demand with Artificial Neural Networks
Margherita Gerolimetto, Christine Mauracher, and Isabella Procidano
ABSTRACT | Pages 30-50
In this paper we analyse wine demand in Italy with microdata. Instead of estimating a parametric model, we study the demand following a non parametric approach by means of Artificial Neural Networks. The input set includes the usual economic variables (price and income) and some socio-demographic factors that are also shown to be relevant for demand analysis. We compute price elasticities using two different nonparametric procedures.
Bordeaux Wine as a Financial Investment
Lee W. Sanning, Sherrill Shaffer, and Jo Marie Sharratt
ABSTRACT | Pages 51-71
For repeat transactions data from monthly auction hammer prices, we analyze the level and quality of Bordeaux wine returns using the Fama-French Three-Factor Model and the Capital Asset Pricing Model. Returns average up to 0.75% per month above those predicted by these models. Further, investment grade wines benefit from low exposure to market risk factors, thus offering a valuable dimension of portfolio diversification. These findings are consistent with simple theoretical considerations and support a documented growing interest in wine investments.
Determinants of Argentinean Wine Prices in the U.S.
Guillermo J. San Martín, Javier L. Troncoso, and Bernhard Brümmer
ABSTRACT | Pages 72-84
A hedonic price function for Argentinean wines in the U.S market is estimated in order to evaluate the effect of the most important attributes of wine on price. Results show that labeling practices and the choice of the right wine quality attributes are far more influential on price than expert panel opinions or oenological wine improvements such as age.
The Wines of West Africa: History, Technology and Tasting Notes
Roger G. Noll
ABSTRACT | Pages 85-94
For centuries West Africans have made wines from palm sap, and hard liquor (“gin”) from palm wine. This essay describes the role of palm wine in West African society, attempts to regulate its production and consumption since colonial times, the basics of the production process, and the appearance, bouquet and flavor of unpasteurized palm wine as it ages through its useful life of a day or two.
Book & Film Reviews
BARRY C. SMITH
Questions of Taste: The Philosophy of Wine
Reviewed by David J. Hoaas
MICHELIN GUIDE TOKYO 2008
Selection of Restaurants and Hotels
Reviewed by Peter Musolf
JOHN V.C. NYE
War, Wine, and Taxes:
The Political Economy of Anglo-French Trade, 1689-1900*
Reviewed by James Shepherd