Crowdfunding has recently emerged as a novel way of financing new ventures. It coincides with a growing interest in wine as an investment good and with a search for new funding opportunities by wine makers. In this study, we examine potential investors willing to engage in wine crowdfunded projects and the kind of revenue that would attract them. We presented an original survey where respondents were asked about their wine consumption and purchase, their knowledge about crowdfunding, their relation to the internet, their investment and project related to wine crowdfunding, and their expectations concerning the returns from this type of contribution. Our results suggest that among all forms of crowdfunding, the donation/voluntary contribution side driven by intrinsic motivation is likely to remain marginal compared to crowdfunding as an investment or a form of early purchase. (JEL Classifications: G11, G12, G21, L17, L66)

Information conveyed on the price tag or label of a consumable packaged good is widely thought to change the consumer's sensory experience of consuming the good. Can the positive “placebo” effects of high prices and negative “nocebo” effects of low prices on consumer experience be isolated and observed in a controlled experiment without using deception? In a pilot wine experiment using a method I call “half-blind tasting,” I observe that the nocebo response to a $5 price tag is stronger than the placebo response to a $50 price tag. To interpret these preliminary results, I borrow some insights from prospect theory. (JEL Classifications: C91, D81, L66, M31, Q11)

This paper investigates reversals in wine auction prices following a series of strong positive and negative returns. Using the Chicago Wine Company's auction data, we find evidence of reversals after extreme wine price changes. There is a clear asymmetry in the market reaction to wine price increases and declines. Wine price declines after strong price increases are not, in general, as significant as wine price increases after strong price declines. The strongest reversal occurs for wines that have declined in price by more than 30 percent. (JEL Classifications: D44, G14)

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.

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)

Judges confer various awards on wines entered in dozens of wine competitions each year. This article employs data on blind replicates to show that those awards are based on one instance of stochastic ratings assigned by wine judges; awards based on the expected values of those stochastic ratings would be different. This article recognizes the stochastic nature of ratings and builds on the work of many others to propose and test a conditional-probability model that yields maximum-likelihood estimates of judges’ latent consensus, idiosyncratic, and random assignments of scores to wines. The exact p-value for a likelihood test of the null hypothesis that the model's results are random is less than 0.001. Applying the notion of conditional probability may lead to better methods of assigning awards to entries in wine competitions and of assessing the capabilities of wine judges. (JEL Classifications: A10, C10, C00, C12, D12)

Firms rely on brand names to market goods to consumers, and consumers rely on brand names to locate goods that satisfy their preferences. If multiple firms are using the same or similar names, consumers may be confused about which product to buy, and firms may not obtain the benefits of their investments in quality. Recently, both firms and scholars in a number of industries have expressed concern about brand name congestion—too many firms clustering around too few terms. This paper applies computational linguistic analysis to chateau names in the Bordeaux wine region to study the degree of brand congestion within a mature, traditional, and high-value market. We find that Bordeaux producers have highly similar names to one another, far more than in comparable wine regions such as California and Alsace. More than a quarter of all Bordeaux producers have a name that is identical or nearly so to at least one other producer, and many terms are claimed by dozens of different producers. Interestingly, however, we find that the most famous and renowned producers have names that tend to be more distinctive than their less famous brethren. (JEL Classifications: C88, D83, L66, O34)

The creation of new sub-divisions within Oregon's Willamette Valley American Viticultural Area (AVA) may indicate a desire on the part of well-established wineries to “split” or separate their social groupings from those with lesser qualifications. Once their social clusters have been differentiated, we theorize that these wineries would be able to capitalize on their newly developed distinctiveness and collect larger regional reputation premiums. Based on 2,221 Wine Spectator–rated pinot noirs from between 1984 and 2008, regression analyses demonstrate that regional reputation premiums have significantly increased with the creation of sub-AVAs and that the price-quality ratio gap between sub-AVAs and the rest of Willamette has widened. (JEL Classifications: D22, Q12, L14)

An unrestricted source differentiated LA/AIDS model was used to estimate Korean wine demand. In doing so, this study tested the null hypotheses of product aggregation, block separability and substitutability. The test results show that the unrestricted source differentiated model is significantly different from the aggregated model, separated model, and restricted source differentiated model at the conventional level. By using this system-wide model, this study estimated price and expenditure elasticities to identify the price effect on Korean wine consumption. (JEL Classification: F10, F11, F13)

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)

In this article, we investigate a possible conflict between two core objectives of cooperatives, members’ income, and continuity, by examining the link between debt and the price paid to producers for Bordeaux wine cooperatives, according to their downstream strategies: (1) the traditional strategy, which is to sell wine in bulk to négociants; (2) joining a federation of cooperatives which blends and puts the wine in the retail market; and (3) vertical integration. We show that downstream strategies are related to different lending regimes, making the relationship between banks and cooperatives a key issue for the lifecycle of cooperatives. (JEL Classifications: D230, G320, Q130)

Rank preference and mixture models have been employed to evaluate the ranks assigned by consumers in taste tests of beans, cheese, crackers, salad dressings, soft drinks, sushi, animal feed, and wine. In many wine tastings, including the famous 1976 Judgment of Paris and the 2012 Judgment of Princeton, judges assign scores rather than ranks, and those scores often include ties. This article advances the application of ranking and mixture models to wine-tasting results by modifying the established use of a Plackett-Luce rank preference model to accommodate scores and ties. The modified model is tested and then employed to evaluate the Paris and Princeton wine-tasting results. Test results show that the mixture model is an accurate predictor of observed rank densities. Results for Paris and Princeton show that the group preference orders implied by the mixture model are highly correlated with the orders implied by widely employed rank-sum methods. However, the mixture model satisfies choice axioms that rank-sum methods do not, it yields an estimate of the proportion of scores that appear to be assigned randomly, and it also yields a preference order based on nonrandom preferences that tasters appear to hold in common. (JEL Classifications: A10, C00, C10, C12, D12)

The United States wine industry has experienced tremendous growth in the past twenty-five years. The number of wineries in the United States has grown to almost 5000, located in all fifty states, and creating over a million full time jobs. Alcohol distribution laws that hinge on the Supreme Court's reconciliation of the Twenty-first Amendment and the Commerce Clause have significantly hindered the industry's ability to expand. Current interpretations of the 21st Amendment give states unprecedented freedom to regulate interstate commerce in alcoholic beverages. The resulting regulatory diversity presents problems both domestically and internationally. (JEL Classification: K2, L5, N4)

This paper examines the effect of the movie Sideways on US wine consumption. Specifically, we examine the affects of the movie on the consumption of Merlot, which is derided in the movie and the affect on Pinot Noir, which is praised. We examine the trends in consumption before and after the movie and perform statistical tests for structural changes in consumption. We also test for changes in consumption of each varietal by price point. (JEL Classification: C22)

The public opinion in the US turned against France and to some extent Germany for not supporting the armed intervention in Iraq. From early 2003 a boycott of French goods, especially wines, by American consumers became an issue which affected sales of French wines in the US. This paper analyses how the boycott affected the demand for French wine on the American market using international trade data. The effect may have been only temporary. We estimate it at some 120 million US dollars. (JEL classification: C22, D12)

Given the growing importance of the wine industry in the United States, wine special interests are on the rise. Data shows that campaign contributions from the wine industry to officials running for state offices have increased over time. Given this reality, one can expect wine excise tax to remain low in states that receive higher campaign contributions. In addition, there are theoretical and empirical reasons to believe that these tax rates are interdependent based on Tiebout competition and yardstick competition. Based on this reasoning, one can hypothesize wine excise tax rates to be spatially dependent. In this study, I test this hypothesis using state-level campaign contributions data from the National Institute on Money in State Politics and Distilled Spirits Council of the United States, Inc. and find that there is strong statistical evidence of spatial dependence between state wine excise tax rates. (JEL Classifications: C12, C23, H71)

As part of a classic article in this journal, Richard Quandt identified 123 wine descriptors that he deemed to be bullshit. In this paper, I examine whether wine consumers are willing to pay any more (or less) for wine if it is described by one of those “bullshit” descriptors. I use three methods to examine that. The first method involves applying a hedonic regression to a dataset of prices and expert descriptions for about 50,000 wines. The second method involves applying a matching estimator to the same dataset. The third method involves a stated-preference survey of about 500 wine consumers. The three methods suggest that for most of the descriptors Quandt deemed to be bullshit, most consumers’ marginal willingness to pay for a descriptor is zero or near-zero. Yet, for some of the descriptors, some consumers do seem to have a non-zero marginal willingness to pay, perhaps because the descriptors shape a consumer's subjective experience or because they signal objective aspects of wine. (JEL Classifications: D12, D83, L66)

This paper presents a theory of price determination for winegrapes in California. As the California wine economy developed, winegrape contracts took on a role as one of the centerpieces of this transformation. The theory is presented and it is shown how two important factors, weather and fi nancial uncertainty, served to shape the contracts. Hence, long term planting contracts for new vineyards, specifying the price, helped ameliorate the uncertainty to growers. Similarly, shorter contracts played a similar role for established vintners. The model deals with two types of growers: those with contracts made well before the year in question and those who will sign a contract in the Spring of the year of harvest. This paper hopes to illuminate these elements and their interaction. The model is then empirically estimated and tested. (JEL classifi cation: K12, Q11)

A recent study in the Journal of Wine Economics presented forecasts of future alcohol consumption derived using the ARIMA (Box–Jenkins) method. Alcohol consumption forecasts can be developed using many different methodologies. In this Note we highlight the value of using multiple methods to develop alcohol consumption forecasts, and demonstrate the capability of the R software platform as a general forecasting tool. (JEL Classifications: D12, C53)

A study entitled “Does Blind Tasting Work? Investigating the Impact of Training on Blind Tasting Accuracy and Wine Preference,” published in the Proceedings issues of this journal, analyzed the effects of training on blind wine tasting accuracy (Wang and Prešern, 2018). I point out two issues with that study and reanalyze their data. I find that the effects of training on accuracy are small, even without controlling for self-selection bias that may produce upwardly biased estimates. To the extent training works, it does not seem to work well and it may only work as a selection device. (JEL Classifications: C91, D83, L66)