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Identifying the Effects of Objective and Subjective Quality on Wine Prices*

Published online by Cambridge University Press:  19 October 2016

Edward Oczkowski
Edward Oczkowski*
Affiliation:
National Wine and Grape Industry Centre and School of Accounting and Finance, Charles Sturt University, P.O. Box 588, Wagga Wagga, New South Wales, 2678, Australia; e-mail: [email protected].
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Abstract

This study examines a framework developed by Cardebat, Figuet, and Paroissien in a 2014 Journal of Wine Economics article for identifying the impacts of both objective and subjective quality on wine prices. We recognize how various specifications are observationally equivalent and that the interpretation of model estimates depends crucially on the posited assumption for the relation between price and objective and subjective quality. The proposed framework is applied to Australian premium wines. Results indicate that the price impact of expert personal opinions is similar to the impact of objective quality as estimated via weather, vintage, and producer fixed effects. The relative importance of objective quality compared with subjective quality depends crucially on the ability of expert scores to accurately reflect objective quality. (JEL Classifications: C21, Q11, Q54)

Keywords

wine priceswine qualityexpert ratings
Type
Articles
Information
Journal of Wine Economics , Volume 11 , Issue 2 , August 2016 , pp. 249 - 260
Copyright
Copyright © American Association of Wine Economists 2016 

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Footnotes

*

Comments from an anonymous referee and communications with Jean-Marie Cardebat and Emmanuel Paroissien clarifying aspects of their article are gratefully acknowledged.

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