Wine Prices Research Articles

The Effect of Weather on Wine Quality and Prices: An Australian Spatial Analysis

AbstractIn 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)

Exogenous application of pectin-derived oligosaccharides to grape berries modifies anthocyanin accumulation, composition and gene expression

Anthocyanins are secondary metabolites synthesized in grape berry skins via the phenylpropanoid pathway, with functions ranging from skin coloration to protection against pathogens or UV light. Accumulation of these compounds is highly variable depending on genetics, environmental factors and viticultural practices. Besides their biological functions, anthocyanins improve wine quality, as a high anthocyanin content in berries has a positive impact on the color, total phenolic concentration and, ultimately, the price of wine. The present work studies the effect of the pre-veraison application of pectin derived oligosaccharides (PDO) on the synthesis and accumulation of these compounds, and associates the changes observed with the expression of key genes in the phenylpropanoid pathways. To this end, pre-veraison Cabernet Sauvignon bunches were treated with PDO to subsequently determine total anthocyanin content, the anthocyanin profile (by HPLC-DAD) and gene expression (by qRT-PCR), using Ethrel and water treatments for comparison. The results show that PDO were as efficient as Ethrel in generating a significant rise in total anthocyanin content at 30 days after treatment (dat), compared with water treatments (1.32, 1.48 and 1.02 mg e.Mv-3G/g FW respectively) without any undesirable effect on berry size, soluble solids, tartaric acid concentration or pH. In addition, a significant alteration in the anthocyanin profile was observed. Specifically, a significant increase in the relative concentration of malvidin was observed for both PDO and Ethrel treatments, compared with water controls (52.8; 55.0 and 48.3%, respectively), with a significant rise in tri-hydroxylated forms and a fall in di-hydroxylated anthocyanins. The results of gene expression analyses suggest that the increment in total anthocyanin content is related to a short term increase in phenylalanine ammonia-lyase (PAL) expression, mediated by a decrease in MYB4A expression. A longer term increase in UDP-glucose flavonoid 3-O-glucosyltransferase (UFGT) expression, probably mediated by a rise in MYBA1 was also observed. Regarding the anthocyanin profile, despite the increase observed in MYB5A expression in PDO and Ethrel treatments, no changes in flavonoid 3′-hydroxylase (F-3′-H); flavonoid 3′5′-hydroxylase (F-3′5′-H) or O-methyltransferase (OMT) could be related with the profile modifications described. Overall, this study highlights that application of PDO is a novel means of altering specific grape berry anthocyanins, and could be a means of positively influencing wine quality without the addition of agrochemicals.

Exploring environmental consciousness and consumer preferences for organic wines without sulfites

In recent years, owing to increasing interest in health in relation for food quality, consumer preference for organic products has gradually been moving from an elitist behavior to quite widespread consumption. This trend is also apparent for the wine industry, which has gradually been adopting organic production methods. Motivated by the increasing importance of consumer health protection, this paper analyzes consumer interest in buying organic wines with no additives, evaluating whether and to what extent consumers are willing to pay a higher price for organic wine with no added sulfites. With the aim to gain detailed knowledge about issues related to consumer health an ordered logit model was used to investigate the probability of achieving a premium prices as a function of the socioeconomic characteristics of consumers and the product attributes. Results indicate that environmental consciousness, and curiosity lead consumers to pay a higher price for these wines while naturalness and designation of origin are the attributes of organic wines positively related to the probability of paying a premium price for wine with no added sulfites. The results also show that inappropriate information discourage consumers from paying a price differential for wine without sulfites. The scientific value and originality of the paper include consumer perception of the health benefits of organic wines without additives. The outcomes confirm that consumers who are sensitive to environmental and quality issues are willing to pay a premium for quality food, and that wider information about wine with no added sulfites is required for effective price differentiation. Being Sulfite addition to food is an issue of increasing relevance in the agro-food sector, this study analyzes for the first time the consumer preference for organic wines by considering how the presence of additives in wine affect the purchasing behavior of consumers.

Analysis of Total Arsenic Content in California Wines and Comparison to Various Health Risk Criteria

Concerns have recently been raised regarding the presence of arsenic in California wine. Total arsenic concentrations in 101 wines produced or bottled in California were characterized using inductively coupled plasma mass spectrometry. Of these wines, 28 were wines identified in media reports as containing arsenic concentrations greater than the U.S. Environmental Protection Agency Maximum Contaminant Level for drinking water of 10 μg/L. The remaining 73 wines were randomly purchased at local retailers. Blush wines were found to contain the greatest total arsenic concentration (mean = 27.2 μg/L; SD = 16.9 μg/L) regardless of sampling group, followed by white wines (mean = 10.9 μg/L; SD = 11.0 μg/L) and red wines (mean = 6.75 μg/L; SD = 7.33 μg/L). Moreover, the publicized group of wines was found to have significantly (<i>p</i> &lt; 0.05) greater total arsenic concentrations (mean = 25.6 μg/L; SD = 12.0 μg/L) than the random wines (mean = 7.42 μg/L; SD = 10.2 μg/L). The concentrations of total arsenic in all wines evaluated in this analysis were less than the two currently used arsenic guidelines for wine of 100 μg/L and 200 μg/L. Results from the statistical analysis suggest that no more than 0.3% of California wines (if any) may contain arsenic concentrations greater than the 100 μg/L guideline. A significant inverse association between total arsenic concentration and unit wine price was also identified in this analysis. Chronic daily intake of arsenic as a result of wine consumption was estimated to account for a small fraction (&lt;8.3%) of a typical adult’s dietary arsenic intake, indicating that wine consumption is not a significant source of total arsenic exposure. These results indicate that the presence of arsenic in wine does not represent a health risk for consumers.

A study of the performance of fine wine on the Swiss market

This paper studies the price evolution and the performance of an investment in fine wine on the Swiss market over the period 2002-2012. Using a repeat-sales-regression approach we calculate different wine indices based on auction hammer prices obtained by Steinfels Weinauktionen. Our results show that different fine wines followed a similar evolution across the sample period but that the amplitude of returns strongly depended on wine regions and types. While Bordeaux and Burgundy wines performed well, wines from the Rhône valley and Italy show a poorer performance. Compared to financial assets wine has significantly outperformed stocks, but not bonds. We further find that the Swiss franc appreciation has had a significant impact on wine prices.

A study of the performance of fine wine on the Swiss market

This paper studies the price evolution and the performance of an investment in fine wine on the Swiss market over the period 2002-2012. Using a repeat-sales-regression approach we calculate different wine indices based on auction hammer prices obtained by Steinfels Weinauktionen. Our results show that different fine wines followed a similar evolution across the sample period but that the amplitude of returns strongly depended on wine regions and types. While Bordeaux and Burgundy wines performed well, wines from the Rhone valley and Italy show a poorer performance. Compared to financial assets wine has significantly outperformed stocks, but not bonds. We further find that the Swiss franc appreciation has had a significant impact on wine prices.

Would you Pay a Price Premium for a Sustainable Wine? The Voice of the Spanish Consumer

Abstract Sustainability has become one of the most important challenges for wineries over the last decade. From a marketing point of view sustainability can be considered as a way to differentiate wines to meet some market segment demands. Furthermore, this strategy can be also considered necessary to guarantee the future development of the wine sector. Given that some wineries have stated that production costs are higher for sustainable wines than for conventional wines, the goal of this paper is to analyze the premium price that consumers are willing to pay for a sustainable wine with respect to the price of a conventional wine with similar characteristics. Contingent valuation has been used to test the differences in the willingness to pay for sustainable wines among the main Spanish wine market segments. Results reveal that most Spanish consumers are willing to pay a higher price for sustainable wines, and that there are differences among the main market segments.

Consumer preferences for red wine in the Spanish market

Consumers are the core of wine marketing. Identifying their preferences, socioeconomic characteristics and behaviour is a key to designing actions for the wine sector which result in marketing opportunities for wine companies. To answer these questions 800 personal surveys were taken of wine consumers in Madrid and Barcelona. These two cities are characterized as large consumption and business centres and showcases for wine promotion in Spain. The conjoint analysis technique was used to identify wine consumers’ preferences and for their characterization, we used socioeconomic analysis and the identification of their ethnocentric tendencies (CETSCALE). The results show that the most highly-valued elements are price and type of wine, in that order. Consumers prefer wine which offers a good price-quality ratio. The origin of the wine does not seem to be an especially important element although wine consumers from Barcelona present more ethnocentric behaviour than those from Madrid, tending to consume wines produced in their own region.

Revisiting the declining price anomaly in wine auctions

This paper investigates the declining price anomaly in wine auctions. The anomaly refers to the observation that when identical lots of wine are sold sequentially in a single auction, prices are more likely to decrease with later lots. Using The Chicago Wine Company's auction data, we find no evidence of declining prices in sequential wine auctions. The results are robust and consistent across wine price ranges.

Inwestycja w wino – ocena sommelierów, rocznik i liczba punktów dystrybucji a wycena

The paper uses Pearson correlation coefficients to analyze strength and directionof the interaction between: price of the wine and the vintage, the evaluationmade by sommeliers and wine price, price of wine and number of distributionpoints. Eight wine strains from the region of Bordeaux were analyzed. The strongestassociation was observed between the price of wine and vintage. The articlealso presents selected descriptive statistics for the price of wine, the assessmentprovided by sommeliers and the number of distribution points. On average, winecalled Petrus / Pomerol enjoys the highest recognition of sommeliers. Furthermore,estimated econometric models indicate that the average price of the analyzedstrains increased by 2.46% a year while the change in the evaluation of wine byone point affects the average change in price by 6.01%.

The demand for Turkish wine: estimates of the wine price elasticities

This article examines the impacts of the recent high taxation policy on Anatolian wine demand and wine price elasticities. This article uses quarterly data between 1997 and 2013 to estimate key elasticities of the Turkish demand for wine. No prior study has estimated specific elasticities for wine consumption and the results also indicate that the high taxation policy is significantly reducing the wine demand and production in Turkey.

Estimating class-specific parametric models using finite mixtures: an application to a hedonic model of wine prices

Hedonic price models are commonly used in the study of markets for various goods, most notably those for wine, art, and jewelry. These models were developed to estimate implicit prices of product attributes within a given product class, where in the case of some goods, such as wine, substantial product differentiation exists. To address this issue, recent research on wine prices employs local polynomial regression clustering (LPRC) for estimating regression models under class uncertainty. This study demonstrates that a superior empirical approach – estimation of a mixture model – is applicable to a hedonic model of wine prices, provided only that the dependent variable in the model is rescaled. The present study also catalogues several of the advantages over LPRC modeling of estimating mixture models.

Relating off-premises alcohol outlet density to intentional and unintentional injuries.

This study investigated the hypotheses that (i) intentional and unintentional injuries occur more frequently in areas with greater density of off-premises alcohol outlets; and (ii) larger and chain outlets selling cheaper alcohol contribute more substantially to injury risk than smaller and independent outlets. Ecological cross-sectional. From the 256 Statistical Area level 2 (SA2) census units in Melbourne, Australia, we selected a random sample of 62 units. There were 2119 Statistical Area level 1 (SA1) units nested within the selected SA2 units. The selected units contained 295 off-premises outlets. Two independent observers conducted premises assessments in all off-premises outlets, assessing the volume of alcohol available for sale (paces of shelf space), price (least wine price) and other operating characteristics (chain versus independent, drive-through). Outlet counts, assessed outlet characteristics and other area characteristics (population density, median age, median income, retail zoning) were aggregated within SA1 units. Dependent variables were counts of ambulance attended intentional injuries (assaults, stabbings, shootings) and unintentional injuries (falls, crush injuries and object strikes). In univariable analyses, chain outlets were larger (r = 0.383; P < 0.001) and sold cheaper alcohol (r = -0.484; P < 0.001) compared with independent outlets. In Bayesian spatial Poisson models, off-premises outlet density was positively related to both intentional [incidence rate ratio (IRR) = 1.38; 95% credible interval (CI) = 1.19, 1.60] and unintentional injuries (IRR = 1.18; 95% CI = 1.06, 1.30). After disaggregation by outlet characteristics, chain outlet density was also related to both intentional (IRR = 1.35; 95% CI = 1.11, 1.64) and unintentional injuries (IRR = 1.20; 95% CI = 1.08, 1.38). Greater off-premises outlet density is related to greater incidence of traumatic injury, and chain outlets appear to contribute most substantially to traumatic injury risk.

Drinking Wine at Home: Hedonic Analysis of Sicilian Wines Using Quantile Regression

In recent decades, the Sicilian wine industry has experienced a booming expansion because of the growing preferences of Italian consumers for Sicilian wines, especially in extra-regional markets. These consumers have been paying closer attention to Sicilian premium wines. For this reason, the objective of this study is to inform professional investors and wine managers about the consumer preferences with respect to the most important segment categories of domestically consumed Sicilian wines. Using the quantile regression technique, we analyzed the role of wine attributes and prices as an information tool in order to value for each wine segment the implicit price of the attributes affecting wine consumers’ choices. The results indicate that Protected Designation of Origin (PDO) and Geographical Indication (PGI) certification is the main determinant in the wine price mechanisms and certified wines achieve premium prices that are progressively higher as the price level of the wine increases. Furthermore the effect of the brand on price formation seems to have a significant impact for low-end wines, whereas it has no specific impact on the price mechanism for high-end wines.

Fair Revaluation of Wine as an Investment

AbstractThe price of wine is a key topic among market participants interested in valuing their stock, including dealers and restaurants, and consumers who may be interested in optimizing their purchases. A closely related issue, revaluation is the need to regularly update the value of a stock. This need is especially acute in the growing industry of wine as an investment. In this case, fair-value measurement is compulsory by law. We briefly review methods available to funds and introduce a new quantitative method aimed at achieving compliance with IFRS (International Financial Reporting Standard) 13 for fair valuation. Using auction data on 26,640 lots, we apply this method to compute the current fair value of a basket of 232 different wines. (JEL Classifications: C14, C43, Z11)

The price of wine

Using historical price records for Bordeaux Premiers Crus, we examine the impact of aging on wine prices and the long-term investment performance of fine wine. In line with the predictions of an illustrative model, young maturing wines from high-quality vintages provide the highest financial returns. Past maturity, famous châteaus deliver growing non-pecuniary benefits to their owners. Using an arithmetic repeat-sales regression over 1900–2012, we estimate a real financial return to wine investment (net of storage costs) of 4.1%, which exceeds bonds, art, and stamps. Returns to wine and equities are positively correlated. Finally, we find evidence of in-sample return predictability.

Machine Learning in Fine Wine Price Prediction

AbstractAdvanced machine learning techniques like Gaussian process regression and multi-task learning are novel in the area of wine price prediction; previous research in this area being restricted to parametric linear regression models when predicting wine prices. Using historical price data of the 100 wines in the Liv-Ex 100 index, the main contributions of this paper to the field are, firstly, a clustering of the wines into two distinct clusters based on autocorrelation. Secondly, an implementation of Gaussian process regression on these wines with predictive accuracy surpassing both the trivial and simple ARMA and GARCH time series prediction benchmarks. Lastly, an implementation of an algorithm which performs multi-task feature learning with kernels on the wine returns as an extension to our optimal Gaussian process regression model. Using the optimal covariance kernel from Gaussian process regression, we achieve predictive results which are comparable to that of Gaussian process regression. Altogether, our research suggests that there is potential in using advanced machine learning techniques in wine price prediction. (JEL Classifications: C6, G12)

The value of added sulfur dioxide in French organic wine

The addition of sulfur dioxide is a longstanding and common practice in the winemaking industry. Sulfur dioxide preserves wine, preventing oxidation and browning. However, in the U.S., wine labeled as organic cannot contain added sulfur dioxide. A petition put forth to the National Organic Standards Board for the allowance of added sulfur dioxide in organic wine was recently rejected. In France, added sulfur dioxide is allowed in organic wine, but not used in all organic wine. This variation in use allows the estimation of the value of added sulfur dioxide in French organic wine, which sheds light on the possible benefits of a policy change in the U.S. For red wines, the addition of sulfur dioxide reduces the suggested retail price of wines to be consumed immediately after purchase, but the effect becomes positive for wines that are intended to be cellared for at least one to three years before consumption. The effect for most white wines is neutral to positive. The magnitude of the effect for both red and white wines varies by eco-certification type.

The Dynamic Effects of Changes in Prices and Affordability on Alcohol Consumption: An Impulse Response Analysis.

To investigate how changes in alcohol price and affordability are related to aggregate level alcohol consumption in Australia to help to inform effective price and tax policy to influence consumption. Annual time series data between 1974 and 2012 on price and per-capita consumption for beer, wine and spirits and average weekly income were collected from the Australian Bureau of Statistics. Using a Vector Autoregressive model and impulse response analysis, the dynamic responses of alcohol consumption to changes in alcohol prices and affordability were estimated. Alcohol consumption in Australia was negatively associated with alcohol price and positively associated with the affordability of alcohol. The results of the impulse response analysis suggest that a 10% increase in the alcohol price was associated with a 2% decrease in the population-level alcohol consumption in the following year, with further, diminishing, effects up to year 8, leading to an overall 6% reduction in total consumption. In contrast, when alcohol affordability increased, per-capita alcohol consumption increased over the following 6 years. Our findings suggest that increasing alcohol prices or taxes can help to reduce alcohol consumption at the population level in Australia. However, the impact of affordability in our findings highlights that pricing policies need to consider increases in income to ensure effectiveness. Alcohol price policy should only cautiously focus on individual beverage types, because increasing the price of one beverage generally leads to an increase in consumption of substitutes.

The influence of experts' positive word-of-mouth on a wine's perceived quality and value: the moderator role of consumers' expertise

This study examines the effects of positive word-of-mouth from a knowledgeable source on quality and value perceptions of wine. These effects were analyzed considering the potential differences produced by a wine's price and participants' level of expertise on the category. Data were collected using an experimental design in which price and positive word-of-mouth were manipulated, consumer expertise on the category was controlled, and perceptions of quality and value were measured. Results suggest that positive word-of-mouth from a knowledgeable source positively affects quality and value perceptions, but those effects are contingent on the price of the wine under evaluation and the level of consumer expertise. For a low-priced wine, the effect of positive word-of-mouth on perceived quality is greater for expert consumers than for novice consumers, whereas for a high-priced wine this increase of perceived quality is observed only for novice consumers. Results also revealed a significant increase on perceived value for both novice and expert consumers, but only for the low-priced wine.