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Price and Quality in the California Wine Industry: An Empirical Investigation*

Published online by Cambridge University Press:  08 June 2012

Tony Lima
Tony Lima
Affiliation:
California State University, East Bay, 25800 Carlos Bee Boulevard,Hayward, CA 94542. Email: [email protected].
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Abstract

This paper examines price and quality in the California wine industry using medals won in nine tasting events in 1995 as indexes of quality. For each tasting event, there were four possible medals: double gold, gold, silver, and bronze. Using stepwise least squares regression analysis, we estimate hedonic price functions for the 1884 wines in our sample treating quality as exogenous to price. We also look at results for some wine types, including chardonnay and cabernet sauvignon. The results are largely as expected. The San Francisco Wine Competition appears to be the best predictor of quality with the Orange County and Sacramento (California State Fair) competitions the second best predictors of quality. (JEL Classifi cation: D4, L6)

Type
Articles
Information
Journal of Wine Economics , Volume 1 , Issue 2 , Fall 2006 , pp. 176 - 190
Copyright
Copyright © American Association of Wine Economists 2006

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