On May 24, 1976, a wine tasting took place in Paris at the InterContinental Hotel that wine-and-food critic Anthony Dias Blue has called the most important in the 20th century. Englishman Steven Spurrier, who owned a wine shop and wine school in Paris called Caves de la Madeleine, staged the event. He was in his 30s and regularly did things that the French wine establishment never thought of trying. His wine school, for example, was the first ever in Paris. Once he had a comparative tasting of the five famous French First Growths, something the masters of French wines never did.

Wine tastings inevitably involve some form of grading or ranking the wines, since the objective of tastings is to determine which wine is best, second best, etc., at least among the tasters on that particular occasion. Much has been written about the care that has to be taken that judges are not influenced by extraneous and irrelevant factors and that they do not influence one another. Ultimately, of course, the views of the judges need to be congealed in a single ranking that expresses the “social preference” among the wines. And therein lies the rub: how to aggregate individual preferences into a social ranking.

The wine ratings from the a wine tasting comparing wines from a young wine region, New Jersey, to wines from Bordeaux was held June 8, 2012 in Princeton, NJ. Graphical analysis revealed substantial differences in the use of the rating scale between judges, both in the centroids of their scores and the variability in their scores. Analysis of variance failed to detect any significant differences in the white wines regardless of data transformation or statistical model. Analysis of raw data from the red wines suggested significant differences, but severely violated ANOVA model assumptions and was invalid. Rank transformation, standardization, a model with heterogeneous variances, and Friedman's test all indicated no significant differences among red wines. Based on the confidence interval on the difference between all New Jersey and all Bordeaux wines in each flight it was estimated that differences larger than 1.5 on the 20-point scale would have been declared significantly different for either white or red wines. Therefore, the tasting was powerful enough that any meaningful differences between the wines from the two origins would have been detected. (JEL Classification: C19, Q19)

We suggest a new game-theory-based ranking method for wines, in which the Shapley Value of each wine is computed, and wines are ranked according to their Shapley Values. Judges should find it simpler to use, since they are not required to rank order or grade all the wines, but merely to choose the group of those that they find meritorious. Our ranking method is based on the set of reasonable axioms that determine the Shapley Value as the unique solution of an underlying cooperative game. Unlike in the general case, where computing the Shapley Value could be complex, here the Shapley Value and hence the final ranking, are straightforward to compute. (JEL Classification: C71, D71, D78)

Results for a total of 804 double-blind tastes by experienced tasters during nine tasting events are reported. T-test results reject the hypothesis that flight-position bias affects results. The distribution of ranks for a wine is a mixture distribution, and tests concerning the variance of that mixture distribution do not isolate the variance due to the randomness mixture component alone. T-statistics for the mean ranks of high- and low-ranking wines are over several standard deviations from a random expectation. T-tests show that the statistical significance of the difference between wine ranks is positively related to the difference in their mean ranks. At a 95% level of significance, the difference in ranks between the first- and second-place wines appears to be significant in 33% of tastings. At 95%, the difference in ranks between the first- and last-place wines appears to be significant in 100% of tastings. Monte Carlo simulation shows that much of those differences could be illusory and due to ranking procedures that lead to Type I errors. While the mean correlation coefficient between price per bottle and mean preference is a weakly positive 0.23, this may not indicate an inefficient market. (JEL Classifications: A10, C00, C12, D12)

Wine grapes contribute significantly to the economy of California, with a gross production value of more than $2 billion in 2010. Studies on economic issues in the industry require measures of demand response to price, but despite the economic importance of this industry, estimates of elasticities of demand for wine grapes have not been published. We use a flexible-form inverse demand system model to estimate elasticities of demand for wine grapes from three grape-growing regions in California, representing three different quality (price) categories. The resulting estimates of own-price elasticities are high, ranging from −2.6 for grapes in the low-price region to −9.5 for grapes in the high-price region. Such high elasticities are plausible given the role of international trade in wine, and they are consistent with synthetic estimates that we computed based on a combination of economic theory, data on market shares, estimates of some pertinent parameters in the literature, and informed guesstimates of values for other parameters. (JEL Classification: Q11, Q12, Q13)

This paper introduces the role wine has played as a central factor in the history of economic thought. The focus is on an examination of documented sources that connect wine and its viticulture and enology with the evolution of economic concepts. Works by Adam Smith, David Ricardo, Karl Marx, John Stuart Mill, Léon Walras, Alfred Marshall, and others are examined, as well as wine economic ideas postulated by Greek and Roman thinkers. (JEL Classification: A1, B1, B3, N00)

The behavior of the macro or mass-production segment of the U.S. brewing industry appears to be paradoxical. Since the end of Prohibition in 1934, the number of independent brewers has continuously declined while the major national brewers, such as Anheuser-Busch, Miller, and Coors, have gained market share. In spite of this decline in the number of competitors, profits and market power have remained low in brewing. Iwasaki et al. (2008) explain this result by providing evidence that changes in marketing and production technologies favored larger brewers and forced the industry into a war of attrition, in which only a handful of firms could survive. This led to fierce competition, especially from the 1960s through the mid 1980s. Since the late 1990s, the war appears to have subsided. Thus, the purpose of this study is to determine whether price competition diminished after the mid-1990s. We find evidence that competition has diminished but not enough to substantially increase market power. (JEL Classification: D22, L11, L66)

Issues with the Cordorcet method used in the subject paper to aggregate rankings are presented. These arise because critical information contained in each voter's ranking is ignored. The mathematically superior Borda Count, which uses the complete information provided by each voter, is used to aggregate the rankings and the results are compared.

In response to the work of Borges et al. (2012), Hulkower (2012) poses questions regarding the relative merits of the Condorcet and the Borda methods; a topic which has been taking place in socio-political studies for a very long time. While both approaches have their supporters and their detractors (Young, 1988; Risse, 2005; Saari, 2006), below we present the reasons for choosing Condorcet's method to obtain a consensus ranking of a region's vintage quality (Borges et al., 2012).