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French Wine and the U.S. Boycott of 2003: Does Politics Really Affect Commerce?*

Published online by Cambridge University Press:  08 June 2012

Orley Ashenfelter ,
Stephen Ciccarella  and
Howard J. Shatz
Orley Ashenfelter
Affiliation:
Economics Department, Industrial Relations Section, Princeton University, Princeton,New Jersey 08544–2098, Tel (609) 258–4040, Fax (609) 258–2907, email: [email protected]
Stephen Ciccarella
Affiliation:
Economics Department, Cornell University, Ithaca, NY 14850, Tel (607) 232–2147, Fax (607) 255–2818, email: [email protected]
Howard J. Shatz
Affiliation:
RAND Corporation, 1200 South Hayes Street, Arlington, VA 22202–5050, Tel (703) 413–1100 x5184, Fax (703) 413–8111, email: [email protected]
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Abstract

In early 2003, France actively tried to thwart the plans of the Bush administration to build international support for a war to depose Iraqi ruler Saddam Hussein. In response, calls in the United States for a boycott of French products, wine in particular, rebounded through all forms of media. In the spring of 2003, French business people even reported that the boycott calls were hurting their U.S. sales. Using a dataset of sales of nearly 4,700 individual wine brands, we show that there actually was no boycott effect. Rather, sales of French wine dipped for two reasons. First, they experience a cyclical peak at holiday time, from November through early January, and the boycott was called during the February to May period. Second, sales of French wine have been in a secular decline in the United States. Sales in February through May 2003 merely stayed on trend. We contrast our results with other recent work that has found evidence of a boycott effect but that omits the holiday effect from several specifications. French wine producers may be having economic problems, but it is not because of their government's foreign policy. (JEL classification: D12, F14, L66, Q17)

Type
Articles
Information
Journal of Wine Economics , Volume 2 , Issue 1 , Spring 2007 , pp. 55 - 74
Copyright
Copyright © American Association of Wine Economists 2007

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