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)

We empirically examine the strategic importance of the choices of the first person ordering, that is, the leader, for the decisions made and money spent by other commensals at a restaurant table. Our aim is to study the similarity of orders—in terms of dishes, drinks, and prices—among the table leader and the other commensals. The empirical results reveal that table leaders, both male and female, exert a considerable influence on the choices made by other diners. We analyze the differences arising when males and females act as table leaders. (JEL Classifications: D12, D91)

Two randomly sampled groups of subjects were endowed with real budgets and placed in 5 different budget/price situations. In each situation they had to evaluate 6 orange juices and complete a demand table. At the end of the experiment, one demand table was randomly selected and participants had to buy the corresponding products. In one group, participants choose after looking at the packaging in the other they could also taste the products. Results show that participants who chose without tasting, made quicker decisions, selected a larger number of variants and were more influenced by prices than those who could taste the products. Although choices appeared very heterogeneous, most participants exhibit coherent behaviors. (JEL classification: C91, D12)

China has been one of the most important sources of growth in global wine demand this century, accounting for 7% of the world's wine consumption and imports by 2017, or four times its 2005 shares. But China's per capita wine consumption peaked in 2012, has fallen every year since 2017, and in 2022 was one-third of its peak, and its imports have more than halved since 2017. Certainly, the COVID-19 disruption and associated slowdown in China's income growth would account for some of that. However, the fall in China's alcohol consumption began three years earlier, and between 2019 and 2022, the fall was considerably larger for wine (47%) than for spirits (17%) and beer (3%). Thus, wine's share of alcohol consumption in China fell by two-fifths over those three years. The article speculates on the reasons behind the dramatic downturn in this globally important market and finishes by imagining future trends and drawing implications for wine-exporting countries.

Spirits represent around 50% of global alcohol consumption. This sector is much less studied than other alcoholic beverages such as wine or beer. This paper reviews the economic history of spirits and analyzes recent trends in the spirits markets. The technology to produce spirits is more complex than for wine or beer. Distillation was known in ancient Chinese, Indian, Greek, and Egyptian societies, but it took innovations by the Arabs to distill alcohol. Initially, this alcohol was used for medicinal purposes. Only in the Middle Ages did spirits become a widespread drink. The Industrial Revolution created a large consumer market and reduced the cost of spirits, contributing to excess consumption and alcoholism. Governments have intervened extensively in spirits markets to reduce excessive consumption and to raise taxes. There have been significant changes in spirits consumption and trade over time. Over the past 50 years, the share of spirits in global alcohol consumption increased from around 30% to around 50%. In the past decades, there was strong growth in emerging markets, including in China and India. Recent developments in the spirits industry include premiumization, the growth of craft spirits, and the introduction of terroir for spirits. (JEL Classifications: L51, L66, N40, Q11, Q18)

We present a framework for measuring the information content or, more subjectively, the meaningfulness of wine tasting notes. Our analysis is based on developing a summary statistic related to Theil's uncertainty coefficient. The methods we develop can be used for the comparative analysis of tasting notes against a benchmark tasting system. An analysis of the examples of real and “fake” tasting notes in Quandt (2007) illustrates the method. We argue that the categorization of wine jargon leads to informative tasting notes. (JEL Classification: A12, C65, C83, D83)

American Viticultural Areas (AVAs) are descriptors of where wine grapes are grown that are designed to capture qualities unique to the wine and to influence its price. Sub-AVAs are sub-divisions of well-known AVAs designed to have the same effect. In this paper, I study the impact of the Napa Valley Sub-AVA system on the pricing and rating of Napa Valley wines. The analysis utilizes a primary hedonic pricing model to isolate both the individual Sub-AVA's price effect and the system's cumulative price effect. This study uses a unique dataset of 5,017 Napa Valley wines reviewed by the Connoisseurs’ Guide to California Wine over the 10-year period from 2004–2013. Estimated price effects persist even after controlling for rating differences, implying that consumers value the wines of sub-AVA's independently of critics’ ratings. These results indicate that Sub-AVAs deliver a more substantial price effect than previous literature has suggested. (JEL Classifications: C01, L10, L66, O13)

Competition medals are one of the most readily available sources of expert opinion to wine consumers, yet the “expertise” of competition judges and efficacy of medals have been questioned in the literature. This paper reevaluates the relevance of gold medals using data from ten competitions and scores from two leading wine publications. The analysis begins by exploring differences in gold medal award rates across competitions while holding wine quality constant through paired comparisons, which are found to be substantial. Next, the relevance of gold medals as indicators of wine quality is assessed, using the average scores from Wine Enthusiast and Wine Spectator as surrogates for quality. By itself, knowledge that a wine is a gold medal winner appears to have little relevance, as these wines do not score significantly higher than other medal winners. However, evidence suggests that golds from some competitions may be more relevant than others. (JEL Classifications: L15, L66)

This paper examines ratings of Bordeaux wines from vintages spanning 1970 to 2005. We use ratings from three popular rating sources – Robert Parker (The Wine Advocate), Stephen Tanzer (International Wine Cellar), and Wine Spectator – to examine differences and consistencies in ratings. Our study is based on over 3, 100 ratings for château/vintage/rater combinations for the “classified growths” as identified in the 1855 Classification. We developed a regression model with rating scores as the depending variable and independent variables for raters, vintages, châteaux and rater-vintage. This model explains 64.6% of the variation in rating scores. We identify the performance of individual châteaux and use our findings to propose an update to the 1885 classification. Based on the ratings we examined, more than half of the 61 classified growths are misclassified, with some châteaux moving as many as three tiers upward or downward compared to the historical classification. While we believe it is unlikely that the classification will be changed, we believe that our proposed classification update (and our rank-ordering of the châteaux, particularly in relation to price-based orderings) can help guide wine purchase decisions of consumers and the restaurant industry. (JEL Classification: L66, C22, Q12, L10)

The impact of product ratings is significant in the experience goods market, whose intangible products are difficult to evaluate before consumption. Product ratings can reduce information asymmetries because they represent a credible signal of quality and thus positively affect product sales. In this study, we shed light on how professional critics behave by focusing on the influence of product characteristics and former reviews on rating behavior and market prices as additional quality signals in wine markets. Using 13,911 observations from professional wine tastings, we analyze 8,444 worldwide-produced wines and their ratings over 20 years. We find clear evidence to suggest that prices and product ratings are significantly related. Finally, the results suggest that review consistency evolves and determines current ratings.

The California Grape Crush Report (Crush Report) is an authoritative source of information on production and returns per ton by variety of wine grapes that includes summaries of quantities produced and estimates of the average prices and value of wine grapes crushed in California. The data provided in the Crush Report are used to calculate the total value of wine grape production as reported in the annual Agricultural Statistics reports published by the U.S. Department of Agriculture and in major industry publications. We use the differences among crush districts in the shares of production crushed to growers’ accounts to show that the current mechanism of calculating average statewide returns per ton understates the true total value of the crush by 14 to 20 percent. We show that a more accurate estimate of the total value and average price can be obtained if the prices of the wine grapes that are sold are used to infer the prices of wine grapes that are not sold before computing the weighted averages. (JEL Classifications: Q20, Q11, Q13, Q19)

Changes in winery ratings in leading wine guides, that is, improvements as well as deteriorations, are typically attributed to corresponding changes in the quality of the wines produced by the respective winery. What remains unexplored in this context is changes in editorship and/or changes in the composition of the wine tasting teams working for the respective guide. Using data from two particularly prestigious German wine guides (Gault Millau and Vinum), this paper shows that these latter changes have a rather small, yet statistically significant impact on changes in winery ratings. Thus, consumers are well-advised to consider these changes before making their purchasing decision. (JEL Classifications: L21, M30, Q13)

Mendoza is the main wine-producing province of Argentina, and the government is currently implementing a range of policies that seek to improve grape grower profitability, including a vineyard replanting program. This study uses a dataset of all grape sales recorded in Mendoza from 2007 to 2018, totaling 90,910 observations, to investigate the determinants of grape prices. Key findings include: smaller volume transactions receive lower-average prices per kilogram sold; the discount for cash payments is higher in less-profitable regions; and the effect of wine stock levels on prices is substantial for all varieties. Long-run predicted prices are also estimated for each variety, and region; and these results suggest that policymakers should review some of the varieties currently used in the vineyard replanting program. (JEL Classifications: Q12, Q13, Q18)

This special symposium focuses on the analysis of climate change impacts on the spatial dimension of vineyard land use. This includes the analysis of projections of current vineyard areas that are lost due to climate change, those that are retained despite climate change, and new vineyard areas that are created due to climate change. The analysis explores the use of GIS over regional and global scales. Furthermore, this symposium sheds light on the socioeconomic dimension of climate change impacts on the wine industry and viticulture by exploring the use of an ecosystem service approach. Such an economic sector is responsible for the provision of a wide range of cobenefits in addition to wine products. These include biodiversity protection and cultural services, including landscape values and ecotourism benefits (see Nunes and Loureiro, forthcoming). In this context, this symposium endorses the ecosystem service approach to the management of vineyards as a regional strategic plan to promote sustainable development. This embraces a broad range of issues including (1) the improvement of people's quality of life; (2) the increase of prospects for more jobs in rural areas; and (3) the protection of regional commons, including both biodiversity and cultural heritage–oriented commons.

This paper reports a use of the real-options valuation methodology to analyze wine grape vineyard investment under price and yield uncertainty. Threshold annual rates of revenue per hectare to trigger entry and exit, respectively, were calculated for three different sizes of wine grape vineyards in northwest Victoria, Australia. The modeling identified lower exit and higher entry triggers than would be indicated by a conventional approach that ignores the uncertainty underpinning adaptive investment decisions. Between these triggers is a relatively wide gap of estimated indeterminacy in vineyard investment that highlights the intertwined influence of numerous economic factors—cost structure, economies of scale, market volatility, transaction costs, and sunk and salvaged asset valuation. Drawing on these determinants of vineyard investment and disinvestment, the paper discusses the role of investment incentives in affecting industry transformation and the scope for policy intervention to assist structural adjustment of the wine grape sector. (JEL Classification: C61, G11, I25, Q12)

This paper analyzes stock market reaction to court decisions related to the differential treatment of in-state and out-of-state internet wine sales. Several states had differential laws governing internet sales of wine directly to consumers for in-state and out-of-state wineries. These laws were possibly more harmful to small wine producers as their products are less likely to be carried by retailers. In May of 2005, The Supreme Court of the United States declared these practices unconstitutional. Prior to the Supreme Court granting the writ of certiorari there was a circuit split on the issue. Our study seeks to measure the impact of the Courts' decisions on the stock returns of wineries using standard event study methodology. The results show a negative stock market reaction to publically traded large wineries to the Supreme Court ruling. It appears that differential treatment laws were, indeed, beneficial to the large wineries. (JEL Classification: G18, Q28)