In early 2003, France actively tried to thwart the plans of the Bush administration to build international support for a war to depose Iraqi ruler Saddam Hussein. In response, calls in the United States for a boycott of French products, wine in particular, rebounded through all forms of media. In the spring of 2003, French business people even reported that the boycott calls were hurting their U.S. sales. Using a dataset of sales of nearly 4,700 individual wine brands, we show that there actually was no boycott effect. Rather, sales of French wine dipped for two reasons. First, they experience a cyclical peak at holiday time, from November through early January, and the boycott was called during the February to May period. Second, sales of French wine have been in a secular decline in the United States. Sales in February through May 2003 merely stayed on trend. We contrast our results with other recent work that has found evidence of a boycott effect but that omits the holiday effect from several specifications. French wine producers may be having economic problems, but it is not because of their government's foreign policy. (JEL classification: D12, F14, L66, Q17)

An analysis of over 4000 wines entered in 13 U.S. wine competitions shows little concordance among the venues in awarding Gold medals. Of the 2,440 wines entered in more than three competitions, 47 percent received Gold medals, but 84 percent of these same wines also received no award in another competition. Thus, many wines that are viewed as extraordinarily good at some competitions are viewed as below average at others. An analysis of the number of Gold medals received in multiple competitions indicates that the probability of winning a Gold medal at one competition is stochastically independent of the probability of receiving a Gold at another competition, indicating that winning a Gold medal is greatly influenced by chance alone. (JEL Classification: D02, Q19)

The existing literature on the return to wine is mixed. Some studies have found wine to be an unattractive investment option and others have found wine to be an investment class that provides excess risk adjusted returns. However, provided the return to wine does not have a strong positive correlation with standard financial assets, even if the return to wine is low, it is possible that including wine in an investment portfolio will provide a diversification benefit. Here the repeat sales regression methodology is used to estimate the return to Australian wine, and the return is shown to be lower than for standard financial assets. Several measures are then used to show that despite the return to Australian wine being lower than the return to standard financial assets, wine does provide a modest diversification benefit. (JEL Classification: G11, G12)

We conducted a blind tasting sensory evaluation experiment and a chemical analysis of four craft hard apple ciders from the Pacific Northwest of the USA. Using the sensory and demographic data collected during the experiment, we estimated the consumer willingness-to-pay (WTP), using a contingent valuation model. Overall liking, taste, and aroma, from the sensory evaluation, as well as age of the sampler and if the sampler was a cider drinker, contributed positively to the WTP. In contrast, if the subject was a beer drinker this reduced their WTP. From the chemical analysis we found that tannin level had a positive effect on WTP, but an increased level of sweetness, as part of a ratio of specific gravity to acid, decreased consumer WTP. (JEL Classifications: C91, D12, L66, Q13)

This paper examines the ratings of 12 influential wine critics on the Bordeaux en primeur market over the vintages 2003–2012. We hypothesize that wine experts differ significantly in their rating approach and influence on prices. We find that European critics are less transparent and in general more severe in their scoring than their American counterparts. Experts also appear to reach a relatively strong consensus on overall wine quality but have more diverse opinions on wines that achieve a surprising level of quality given the vintage, the ranking, or the appellation from which they originate. Our evidence also suggests that Robert Parker and Jean-Marc Quarin are the most influential critics, as a 10% surprise in their scores leads to a price increase of around 7%. We further find that their impact is higher for appellations and estates that are not covered by the official 1855 classification and for the best vintages. (JEL Classifications: C60, G11, Q11)

The sugar content of California wine grapes has increased significantly over the past 10–20 years, and this implies a corresponding increase in the alcohol content of wine made with those grapes. In this paper we develop a simple model of winegrape production and quality, including sugar content and other characteristics as choice variables along with yield. Using this model we derive hypotheses about alternative theoretical explanations for the phenomenon of rising sugar content of grapes, including effects of changes in climate and producer responses to changes in consumer demand. We analyze detailed data on changes in the sugar content of California wine grapes at crush to obtain insight into the relative importance of the different influences. We buttress this analysis of sugar content of wine grapes with data on the alcohol content of wine. (JEL Classification: Q54, Q19, D12, D22)

The inspiration for the exegesis that follows comes directly from Harry G. Frankfurt, distinguished emeritus professor of philosophy at Princeton University, who recently published an enormously successful essay on the subject of bullshit (Frankfurt, 2005). In the author's view,

“One of the most salient features of our culture is that there is so much bullshit. Everyone knows this. Each of us contributes his share. But we tend to take the situation for granted. Most people are rather confident of their ability to recognize bullshit and to avoid being taken in by it. So the phenomenon has not aroused much deliberate concern. We have no clear understanding of what bullshit is, why there is so much of it, or what functions it serves.” (Frankfurt, 2005, p. 1)

A fine philosophical insight into bullshit is provided by Bernie Laplante, played by Dustin Hoffman in the movie “Hero.”

Notwithstanding the observed positive correlations between critics' quality ratings and wine prices, the range of these correlations is quite high. In light of this, researchers must consider the factors that either strengthen or weaken the association between quality ratings and prices. In this paper, we propose that the slope of the relationship between quality ratings and wine prices is moderated by the amount of attention that producers receive. Because attention increases with a producer's critical exposure (i.e., its history of critical coverage), price-quality relationships will be steeper for producers with more critical exposure. This prediction is confirmed in an analysis of New World wines selling into the U.S. market over the 1987 to 2001 period. While a wine's price is a positive function of its own quality rating, the strength of the price-quality relationship increases with a producer's critical exposure (JEL classifications: L11, L13, L15).

In markets for experience goods, publications exist to help consumers decide which products to purchase. However, in most cases these publications accept advertising from the very firms whose products they review, raising the possibility that they bias product reviews to favor advertisers. To test for biased product reviews, I exploit the fact that, of the two major U.S. wine publications, only Wine Spectator accepts advertising. Although the average Wine Spectator ratings earned by advertisers and non-advertisers are similar, I find that advertisers earn just less than one point higher Wine Spectator ratings than non-advertisers when I use Wine Advocate ratings to adjust for differences in quality. However, 1 find only weak evidence that the selective retasting of advertisers' wines contributes to the higher ratings. Moreover, conditional on published ratings, Wine Spectator is no more likely to bestow awards upon advertisers. I conclude that while advertising may influence ratings on the margin, Wine Spectator appears largely to insulate reviewers from the influence of advertisers. (JEL Classification: L15, M37)

Bordeaux wines have been made in much the same way for centuries. This article shows that the variability in the quality and prices of Bordeaux vintages is predicted by the weather that created the grapes. The price equation provides a measure of the real rate of return to holding wines (about 2–3% per annum) and implies far greater variability in the early or ‘en primeur’ wine prices than is observed. The analysis provides a useful basis for assessing market inefficiency, the effect of climate change on the wine industry and the role of expert opinion in determining wine prices. (JEL Classification: D43, Q11)

The purpose of this paper is to study the impact of weather conditions on prices of Bordeaux wines. Unlike previous studies (based on data from the main weather station in Mérignac), we use climatological variables from many local stations. Two models are compared: one where prices are related to Mérignac weather conditions, and one where prices are related to local conditions (weather variables measured in the station the nearest to the château). Although a (non-nested) test suggests that the model based on local data is better, the two specifi cations lead to very similar results. This is reassuring news for researchers interested in the relationship between weather and prices, but who do not have access to spatial variations in climate. (JEL Classification: Q19)

We designed an experiment that examines how knowledge about the price of a good, and the time at which the information is received, affects how the good is experienced. The good in question was wine, and the price was either high or low. Our results suggest that hosts offering wine to guests can safely reveal the price: much is gained if the wine is expensive, and little is lost if it is cheap. Disclosing a high price before tasting the wine produces considerably higher ratings, although only from women. Disclosing a low price, by contrast, does not result in lower ratings. Our finding supports the notion that price not only serves to clear markets, it also influences expectations that in turn shape a consumer's experience. In addition, our results suggest that men and women respond differently to attribute information concerning wine. (JEL Classification: C91, D03, D83, M31)

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)

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)

This paper examines the level of consensus, or agreement, among the wine quality ratings of six prominent wine critics for seven consecutive vintages of red Bordeaux. Consensus, a critical component of expertise in wine evaluation, has important implications for consumers' reliance on critics' ratings in deciding which wines to purchase or consume. The principal analyses focus on a core set of wines in each year that were rated by all six critics. Additional analyses concern differences in agreement for classified growths vs. nonclassified growths and for critics of different nationalities (American, British, and French). The level of consensus among these prominent critics is contrasted with that among both wine professionals who are not prominent critics and professionals from several other fields. (JEL Classification: C93)

In the context of the important implications of climate change, this paper analyzes the impact of weather on wine quality and prices for Australian premium wines. Motivated by a recognition of consumers’ accessed information sets, the impact of temperature and rainfall on retail wine prices is assessed through their relation with quality ratings from a high-profile wine guide and then on prices. For a broad spectrum of different quality wines from a cross section of wines available in 2014 and a separate analysis of eight wine varieties, the indirect approach to modeling weather effects through wine quality is found to be superior than assuming weather impacts directly on retail prices. The results also demonstrate the importance of regional variations in weather conditions in influencing prices and identify the optimal season growing temperatures for different grape varieties. (JEL Classifications: Q13, Q54)

We use experimental data to disentangle the signaling and budgetary effects of price on wine demand. The experimental design allows us to isolate the two effects in a simple and intuitive way. The signaling effect is present and nonlinear: it is strongly positive between 3 euros and 5 euros and undetectable between 5 euros and 8 euros. We find a similar nonlinear price–quality relationship in a large sample of wine ratings from the same price segment, supporting the hypothesis that taster behavior in the experiment is consistent with rationally using prices as signals of quality. Price signals also have greater importance for inexperienced (young) consumers. (JEL Classification: D11, D12, D82)

The objective of the present study is to analyze the overall trajectory of Spanish table wine exports during the period 1871–1935 and provide convincing explanations of the pattern. Thus, we employ an approach that takes all of the possible explanatory factors into account, instead of adopting a narrower approach which focuses on a single principal factor. The methodology employed consists of using a gravity model to explain trade flows in Spanish table wine. Our results highlight the key role of trade policies in the determination of export possibilities and the difficulties derived from the export of products which are characterized by the low or non-existent change in demand when income changes. These results may shed a little more light on the determinants of trade in the first phase of globalization. (JEL Classification: F14, N73, N74, Q17)

Recent papers by Hodgson (2008) and Gawel and Godden (2008) have questioned the consistency of expert wine judges in a wine competition setting. In the latter paper, a methodology introduced in psychometric research to measure judge reliability corrected for chance was used to quantify judge consistency (Cohen, 1968). This paper extends that notion, suggesting a value of 0.7 for Cohen's weighted kappa might be used to define an expert wine judge. With that criterion, less than 30% of judges who participated in either of the two studies would be considered “expert.” (JEL Classification: C1, L15)

Plant adaptation to global climate change has become one of the most pressing and important topics in biology. Changes in climate that lead to increased crop water use or decreases in water availability will increase the frequency and magnitude of plant water stress. Water stress reduces plant growth and crop yield, and for perennial crops like grape, there is an added consideration: their long-term ability to tolerate and recover from this stress. This primer introduces plant water relations basics, explaining how grape physiology is affected by water stress and discussing the physiological foundations for the development of drought-tolerant cultivars and rootstocks. (JEL Classifications: Q13, Q54)