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Expert Opinion and Bordeaux Wine Prices: An Attempt to Correct Biases in Subjective Judgments*

Published online by Cambridge University Press:  03 November 2014

Jean-Marie Cardebat ,
Jean-Marc Figuet  and
Emmanuel Paroissien
Jean-Marie Cardebat*
Affiliation:
Larefi and Bordeaux Wine Economics, Economics Department, Bordeaux University, Avenue Léon Duguit, 33608 PESSAC cedex, France
Jean-Marc Figuet
Affiliation:
Larefi and Bordeaux Wine Economics, Economics Department, Bordeaux University, Avenue Léon Duguit, 33608 PESSAC cedex, France; e-mail: [email protected].
Emmanuel Paroissien
Affiliation:
Larefi and Bordeaux Wine Economics, Economics Department, Bordeaux University, Avenue Léon Duguit, 33608 PESSAC cedex, France; e-mail: [email protected].
*
(corresponding author) e-mail: [email protected]
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Abstract

The purpose of this paper is to assess the role of expert opinion on the pricing of Bordeaux wines. To this end, we compile an original dataset including (1) retail prices, (2) scores attributed to wines from France, Spain, and the United States by nine experts from 2000 to 2010, and (3) the meteorological conditions under which the grapes were produced. With this dataset, we aim to determine the presence of bias rooted in the subjectivity of the experts. We assume that the expert wine scores have two main components: (1) an objective one that is driven by the fundamentals of wine production (the quality of soil, producers' skills, and climate conditions) and (2) a subjective one that is determined by the individual opinion of the experts. We use control function techniques to compare the respective impacts of these two factors and find that prices are influenced more deeply by the fundamental quality of the wine than they are by the judge's subjectivity. Furthermore, we notice the great impact of “highest ratings” on pricing, which we interpret as a “marketing effect”: the most favorable score is likely to be the most publicized, which influences the price of the respective wine. (JEL Classifications: C21, D89, L15)

Keywords

Bordeaux wineexpert opinionprice
Type
Articles
Information
Journal of Wine Economics , Volume 9 , Issue 3 , December 2014 , pp. 282 - 303
Copyright
Copyright © American Association of Wine Economists 2014 

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Footnotes

*

We thank Victor Ginsburgh and Michael Visser for their comments on an earlier version of this paper. We are also indebted to an anonymous referee for many helpful suggestions.

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