Hostname: page-component-78c5997874-lj6df Total loading time: 0 Render date: 2024-11-05T16:10:39.008Z Has data issue: false hasContentIssue false
  • English
  • Français

What Determines the Future Value of an Icon Wine? New Evidence from Australia*

Published online by Cambridge University Press:  08 June 2012

Danielle Wood  and
Kym Anderson
Danielle Wood
Affiliation:
Productivity Commission, Melbourne, Australia. Email: [email protected].
Kym Anderson
Affiliation:
World Bank, University of Adelaide and CEPR, Washington DC. Email: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

To what extent can the future price of icon wines be anticipated from information available at the time of their initial sale by wineries? Using a seemingly unrelated regression model we show that weather variables and changes in production techniques, along with the age of the wine, have significant power in explaining the secondary market price variation across different vintages of each of three icon Australian red wines. The results have implications for winemakers in determining the prices they pay for grapes and charge for their wines, and for consumers/wine investors as a guide to the prospective quality of immature icon wines. (JEL codes: C23, D12, D44, D80, G12)

Type
Articles
Information
Journal of Wine Economics , Volume 1 , Issue 2 , Fall 2006 , pp. 141 - 161
Copyright
Copyright © American Association of Wine Economists 2006

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ashenfelter, O. (1997). A hedonic approach to vineyard site selection. Presentation to Fifth Annual Meeting of the Vineyard Data Quantifi cation Society.Google Scholar
Ashenfelter, O., Ashmore, D., and Lalonde, R. (1995). Bordeaux wine vintage quality and the weather. Chance, 8(4), 7–14.CrossRefGoogle Scholar
Byron, R.P. and Ashenfelter, O. (1995). Predicting the quality of an unborn Grange. Economic Record, 71, 400–414.CrossRefGoogle Scholar
Fogarty, J. (2000). Prices, age and weather. Unpublished Honours thesis, School of Economics, University of Western Australia, Perth.Google Scholar
Gladstones, J. (1992). Viticulture and the environment. Adelaide: Winetitles.Google Scholar
Golan, A. and Shalit, H. (1993). Wine quality differentials in hedonic grape pricing. Journal of Agricultural Economics, 44, 311–321.CrossRefGoogle Scholar
Grape and Wine Research and Development Corporation (GWRDC) (2001). R&D highlights. Adelaide: GWRDC.Google Scholar
Greene, W.H. (2002). Econometric Analysis, Prentice Hall, 5th edition.Google Scholar
Halliday, J. (1998). Classic Wines of Australia. Sydney: Harper Collins, 2nd edition.Google Scholar
Hamilton, R.P. (1988). Wind effects on grape vines. In: Proceedings of the Second International Symposium for Cool Climate Viticulture and Oeneology, Auckland. pp. 65–68.Google Scholar
Jones, G.V. and Storchmann, K.H. (2001). Wine market prices and investment under uncertainty: an econometric model for Bordeaux Crus Classés. Agricultural Economics, 26(2), 115–133.CrossRefGoogle Scholar
Langton, S. (2001). Fine wine buying and investment guide. Sydney: Media 21 Publishing Pty Ltd, 4th edition.Google Scholar
Oczkowski, E. (2001). Hedonic wine price functions and measurement error. Economic Record, 77(239), 374–382.CrossRefGoogle Scholar
Read, A. and Caillard, A. (2000). The rewards of patience: a drinking and cellaring guide to Penfolds wines. 4th edition. Sydney: Penfolds Wines.Google Scholar
Schamel, G. and Anderson, K. (2003). Wine quality and varietal, regional and winery reputations: hedonic prices for Australia and New Zealand. Economic Record, 79(246), 357–369CrossRefGoogle Scholar
Smart, R. (2001). Where to plant and what to plant. ANZ Wine Industry Journal, 16(4), 48–50.Google Scholar
White, H. (1980). A heteroskedastic-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 21, 149–170.Google Scholar