dEjournals Home Page
Competitio
Online ready Current Most Read Archives Search
Register Login

Competitio

Vol. 19 No. 1-2 (2020)
PhD student papers

The Determinants of Wine Prices: A Systematic Literature Review

Published:
2020-12-14
DOI Linkhttps://doi.org/10.21845/comp/2020/1-2/1
Author
Peter Gal
View
PDF
Keywords
determinants wine price review
License

Copyright (c) 2020 Péter Gál

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How To Cite
Selected Style: APA
Gal, P. (2020). The Determinants of Wine Prices: A Systematic Literature Review. Competitio, 19(1-2), 84-101. https://doi.org/10.21845/comp/2020/1-2/1
Abstract

Wine is a highly differentiated product sold at a wide range of different prices. This article aims to provide a systematic review of the literature written on the determinants of wine prices globally. The article runs a search on the combination of keywords “wine”, “price”, “determinant” in the Web of Science, Scopus, JSTOR, ProQuest, and Science Direct databases. Based on a final set of 46 articles written between 1998 and 2018, results suggest that terroir and quality ratings are the most significant determinants of wine prices, while objective quality and label data also determines wine prices, though to a different extent and with a different sign in some cases. The hedonic pricing method was the most common way of analyzing the relationship between wines prices and their determinants, and results are similar for most regions and varieties. We believe that our results can be useful for researchers, stakeholders, and even for decision-makers in better understanding the factors lying behind wine prices.

Journal of Economic Literature (JEL) codes: D12, D40 Q11

References
  1. Abraben, L.A., Grogan, K.A., Gao, Z. (2017): Organic price premium or penalty? A comparative market analysis of organic wines from Tuscany. Food Policy, 69(5): 154–165.
  2. Ali, H.H. – Nauges, C. (2007): The Pricing of Experience Goods: The Example of en primeur Wine. American Journal of Agricultural Economics, 89(1): 91–103.
  3. Ali, H.H., Lecocq, S., Visser, M. (2008): The Impact of Gurus: Parker Grades and En Primeur Wine Prices. The Economic Journal, 118(529): 158–173.
  4. Angulo, A.M., Gil, J.M., Gracia, A., Sánchez, M. (2000): Hedonic prices for Spanish red quality wine. 102(7): 481–493.
  5. Arancibia, R.G., Rossini, G., Guiguet, E.D. (2015): Wine Label Descriptors and Shelf Price Paid by Argentine Consumers. American Economic Review, 16(2): 56–72.
  6. Arias-Bolzmann, L., Sak, O., Musalem, A., Lodish, L., Báez R.K., De Sousa, L.J. (2003): Wine Pricing: The Influence of Country of Origin, Variety, and Wine Magazine Ratings. International Journal of Wine Marketing, 15(2): 47–57.
  7. Ashenfelter, O. (2008): Predicting the quality and prices of Bordeaux wine. The Economic Journal, 118, 174–184.
  8. Ashton, R. (2012): Reliability and Consensus of Experienced Wine Judges: Expertise Within and Between? Journal of Wine Economics, 7(1): 70-87. doi:10.1017/jwe.2012.6
  9. Ashton, R.H. (2016): The value of expert opinion in the pricing of Bordeaux wine futures. Journal of Wine Economics, 11(2): 261–288.
  10. Benfratello, L., Piacenza, M., Sacchetto, S. (2009): Taste or Reputation? What Drives Market Prices in the Wine Industry? Estimation of a Hedonic Model for Italian Premium Wines. Applied Economics, 41(17): 2197–2209.
  11. Blair, A.J., Atanasova, C., Pitt, L., Chan, A., Wallstrom, A. (2017): Assessing brand equity in the luxury wine market by exploiting tastemaker scores. Journal of Product & Brand Management, 26(5): 447–452.
  12. Cardebat, J-M. – Figuet, J-M. (2004): What explains Bordeaux wine prices? Applied Economics Letters, 11(5): 293–296.
  13. Cardebat, J-M. – Figuet, J-M. (2009): Estimation of a hedonic price equation for Alsace, Beaujolais and Provence wines. Applied Economics Letters, 16(9): 921–927.
  14. Carew, R. – Florkowski, W.J. (2010): The Importance of GeographicWine Appellations: Hedonic Pricing of Burgundy Wines in the British Columbia Wine Market. Canadian Journal of Agricultural Economics, 58, 93–108.
  15. Chevet, J.M., Lecocq, S., Visser, M. (2011): Climate, Grapevine Phenology, Wine Production, and Prices: Pauillac (1800–2009). American Economic Review, 101(3): 142–146.
  16. Combris, P., Lecocq, S., Visser, M. (2000): Estimation of a hedonic price equation for Burgundy wine. Applied Economics, 32(8): 961–967.
  17. Di Vita, G., Caracciolo, F., Cembalo, L., Pomarici, E., D’Amico, M. (2015): Drinking Wine at Home: Hedonic Analysis of Sicilian Wines Using Quantile Regression. American Journal of Applied Sciences, 12(10): 679–688.
  18. Ferro, G. – Amaro, I.B. (2018): What factors explain the price of top quality wines? International Journal of Wine Business Research, 30(1): 117–134.
  19. Frick, B. – Simmons, R. (2013): The impact of individual and collective reputation on wine prices: empirical evidence from the Mosel valley. Journal of Business Economics, 83, 101–119.
  20. Goldstein, R., Almenberg, J., Dreber, A., Emerson, J. W., Herschkowitsch, A., Katz, J. (2008): Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings. Journal of Wine Economics, 3(1): 1–9.
  21. Haeger, J.W. – Storchmann, K. (2006): Prices of American Pinot Noir wines: climate, craftsmanship, critics. Agricultural Economics, 35, 67–78.
  22. Hoang, V., Iida, T., Matsumoto, S., Watanabe, N., Wilson, C. (2016): Consumer’s comparison between local and imported organic products: a hedonic analysis of the Japanese table wine market. Eurasian Business Review, 6, 405–415.
  23. Hodgson, R. (2009): How Expert are “Expert” Wine Judges? Journal of Wine Economics, 4(2): 233-241. doi:10.1017/S1931436100000821
  24. Jiao, L. (2017): Macroeconomic determinants of wine prices. International Journal of Wine Business Research, 29(3): 234–250.
  25. Jones, G.V. – Storchmann, K-H. (2001): Wine market prices and investment under uncertainty: an econometric model for Bordeaux Crus Classés. Agricultural Economics, 26, 115–133.
  26. Kwong, L.M.K. Ogwang, T., Sun, L. (2017): Semiparametric versus parametric hedonic wine price models: an empirical investigation. Applied Economics Letters, 24(13): 897–901.
  27. Landon, S. – Smith, C. E. (1997): The Use of Quality and Reputation Indicators by Consumers: The Case of Bordeaux Wine. Journal of Consumer Policy, 20(3), 289–323.
  28. Landon, S. – Smith, C.E. (1998): Quality expectations, reputation, and price. Southern Economic Journal, 64(3): 628–647.
  29. Levaggi, R. – Brentari, E. (2014): The Hedonic Price for Italian Red Wine: Do Chemical and Sensory Characteristics Matter? Agribusiness, 30(4): 385–397.
  30. Ling, B-H. – Lockshin, L. (2003): Components of Wine Prices for Australian Wine: How Winery Reputation, Wine Quality, Region, Vintage, and Winery Size Contribute to the Price of Varietal Wines. Australasian Marketing Journal 11(3): 19–32.
  31. Masset, P., Weisskopf, J-P., Faye, B., Le Fur, E. (2016): Red obsession: The ascent of fine wine in China. Emerging Markets Review, 29, 200–225.
  32. Michis, A.A. – Markidou, A.G. (2013): Determinants of retail wine prices: evidence from Cyprus. Empirical Economics, 45, 267–280.
  33. Noev, N. (2005): Wine Quality and Regional Reputation: Hedonic Analysis of the Bulgarian Wine Market. Eastern European Economics, 43(6): 5–30.
  34. Oczkowski, E. (2001): Hedonic wine price functions and measurement error. The Economic Record, 77(239): 374–382.
  35. Oczkowski, E. (2016): Analysing firm-level price effects for differentiated products: the case of Australian wine producers. Australian Economic Papers, 55(1): 43–62.
  36. Pucci, T., Casprini, E., Rabino, S., Zanni, L. (2017): Place branding-exploring knowledge and positioning choices across national boundaries: The case of an Italian superbrand wine. British Food Journal, 119(8): 1915–1932.
  37. Roma, P., Di Martino, G., Perrone, G. (2013): What to show on the wine labels: a hedonic analysis of price drivers of Sicilian wines. Applied Economics, 45(19): 2765–2778.
  38. Rosen, S. (1974): Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition. Journal of Political Economy, 82(1): 34–55.
  39. San Martín, G.J., Troncoso, J.L., Brümmer, B. (2008): Determinants of Argentinean Wine Prices in the U.S. Journal of Wine Economics, 3(1): 72–84.
  40. Schamel, G.H. (2014): Wine quality, reputation, denominations: How cooperatives and private wineries compete? Bio Web of Conferences 3, 03008, 1–7.
  41. Schamel, G. – Anderson, K. (2003): Wine Quality and Varietal, Regional and Winery Reputations: Hedonic Prices for Australia and New Zealand. The Economic Record, 79(246): 357–369.
  42. Shane, E., Wahid Murad, M.D., Freeman, S. (2018): Factors influencing price premiums of Australian wine in the UK market. International Journal of Wine Business Research, 30(1): 96–116.
  43. Thrane, C. (2004): In defence of the price hedonic model in wine research. Journal of Wine Research, 15, 123–34.
  44. Thrane, C. (2009): Explaining variation in wine prices: the battle between objective and sensory attributes revisited. Applied Economics Letters, 16(13): 1383–1386.
  45. Troncoso, J.L. – Aguirre, M. (2006): Short communication. Price determinants of Chilean wines in the US market: a hedonic approach. Spanish Journal of Agricultural Research, 4(2): 124–129.
  46. Unwin, T. (1999): Hedonic price indexes and the qualities of wines. Journal of Wine Research, 10(2): 95–104.
  47. Veale, R. – Quester, P. (2008): Consumer Sensory Evaluations of Wine Quality: The Respective Influence of Price and Country of Origin. Journal of Wine Economics, 3(1): 10–29.
  48. Viana, R.C. – Rodrigues, L.L. (2007): What determines port wine prices? Journal of Wine Economics, 2(2): 203–212.
  49. Weil, R. (2007): Debunking Critics' Wine Words: Can Amateurs Distinguish the Smell of Asphalt from the Taste of Cherries? Journal of Wine Economics, 2(2): 136-144. doi:10.1017/S1931436100000390