Journal of Wine Economics Volume 12 | 2017 | No. 4
Selected Proceedings

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 devel- oped 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.

A substantial oenological literature exists on opinions of experts and neophytes as they relate to opinions about the quality of wines (Ashenfelter and Quandt, 1998; Cicchetti, 2004; Lindley, 2006). These opinions can be contrasted with factual binary questions about wine: Is it oaked? Does it contain sulfites? Is it filtered? Is the grape varietal Cabernet Sauvignon or Cabernet Franc? Syrah or Grenache? Pinot Noir or Gamay? Such factual binary issues are examined within the broader context of the various measures of factual judgment: Overall Accuracy (OA), Sensitivity (Se), Specificity (Sp), Predicted Positive Accuracy (PPA), and Predicted Negative Accuracy (PNA). The resulting biostatistical methodology derives from bio- behavioral diagnostic research investigations. The purpose of this report is to apply this meth- odology to the discipline of oenology to compare wine judgments with wine facts. Using hypothetical examples, wine judges’ classifications of wines as oaked or unoaked were analyzed for their degree of accuracy. The results show that OA is a poor measure of the accuracy of binary judgments relative to Se, Sp, PPA, or PNA. The biostatistics of the problem could have wide-ranging applications in the design of future oenological research investigations, and in scientific research more broadly.

The inability of many wine judges to achieve perfect consistency by assigning the same rating to the same wine in a blind tasting is well established. Results for four wine tastings that include blind replicates are examined in this article. Although perfection is rare, the probability distri- butions of those results show that wine judges do tend to assign closer ratings to replicates than is likely due to chance alone. Approximately one-third of judges assign ratings that are within one rank of perfect consistency, and two-thirds assign ratings within two ranks of perfect con- sistency. This finding is sensitive to judges’ capabilities, the mechanics of the tasting protocol, and the extent to which the replicate is different from other wines in the tasting. Much wine- related research to date takes judges’ individual ratings as deterministic, yet these results show that those ratings are stochastic. These results yield a probability distribution that may guide future research concerning the uses and economic implications of wine ratings.

We measure the effects of consumer-perceived regional brand equity on future intentions toward regional wine purchases and winery visits for U.S.-based North Carolina (NC) wines. Visitor data were collected at 23 regional wineries, including demographics, motives, and perceptions of and intentions toward NC wines. SPSSTM and SmartPLSTM were employed in analyzing the model presented. Knowledge and regional wine brand equity influence wine consumer motives, which in turn affect intentions. Product-centered motives were more important than experience motives for visiting regional wineries.

This paper examines the branding and marketing techniques used to develop the British cham- pagne market in the nineteenth century. It draws upon the archives of the major French cham- pagne houses and the extensive collection of price lists and marketing material in the scattered archives of W. & A. Gilbey, the dominant wine distributor in nineteenth-century Britain, to focus on the period from 1850 to the early 1900s. This period saw the creation of a powerful mar- keting template centered on a group of premium brands that endured for well over a century and influenced champagne marketing worldwide. Contemporary commentators saw a “cult” of famous brands, which disadvantaged consumers and merchants. Looking back at this period through the lens of a century of marketing history, we can clearly see a different picture: one of astute marketing (although that term was not then in use) that exploited selective distribution and created the concept of vintage-dated wine (what we would today call “limited-edition” product lines), making the champagne houses and their agents early exponents of Jean-Noël Kapferer’s twenty-first-century “anti-laws” of luxury marketing.

Although they have often been found to be technically inefficient, cooperatives not only have survived in the wine industry but continue to play major roles in most European countries. Because the specific advantages of their “organizational architecture” (resource pooling and decentralization) seem to outweigh the disadvantages (vaguely defined property rights and high monitoring costs), this paper discusses organizational measures to improve the perfor- mance of cooperatives by addressing three different aspects of “organizational design” (man- aging entry and exit, motivating members, and investing in corporate culture).

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 ques- tioned 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 rel- evance 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 competi- tions may be more relevant than others.

The objective of this article is to estimate the spatial structure of the collective economic con- ceptualization of strategic actions by cidermakers in Québec. It employs group concept mapping, a mixed methods–based approach. Given the limited research on the economic con- ceptualization of horizontal coordination for guiding collective strategic action orientations, this contribution is threefold: methodological, empirical, and practical. Methodologically, the results show the perspective of horizontally coordinated cidermakers and use statistical estimates and retroduction as an inference mode to produce and structure the concept map. Empirically, the spatial economic conceptualization consists of a concept map with seven stra- tegic action clusters organized around the notions of product supply and demand and high- lights tensions between individual and collective strategic actions. Practically, measures of relative importance and relative feasibility are obtained for each cluster on the map, and impli- cations are discussed.

Mid-Atlantic wine consumers participated in an Internet survey to determine which of three attributes (retail base prices, Botrytis cinerea [bunch rot] control measure, or weed-control strategy) and attribute levels (e.g., a retail base price of $12, $16, $22, or $26) were the most important factors in their decisions to purchase 750mL glass bottles of wine. Conjoint analysis was used to calculate average importance for the three attributes. Based on these cal- culations, the base retail price attribute had the greatest impact on participants’ decision to purchase the wine (57.40%), followed by bunch rot control measure (20.76%) and weed control strategy (21.49%). Participants were also asked to indicate how interested (not at all interested to extremely interested) they were in purchasing wines produced from grapes grown using minimal pesticides or with cover crops to control weeds. Separate conjoint anal- yses were then performed based on participants’ level of interest in the two sustainable produc- tion methods. In both instances, the average importance values for retail base price were still higher than the values for either bunch rot or weed control strategies. Average importance values for price were lower for participants who responded that they were “very” or “extremely interested” in purchasing wine produced with minimal pesticides or with cover crops than for participants who were “not all interested” in purchasing such wines.

This paper examines the evolution of champagne prices in New York City from 1948 to 2013 by determining how many hours one must work, using after-tax income, to purchase a bottle of champagne. Each of the three brands analyzed—Bollinger, Louis Roederer, and Moët & Chandon—was divided into three tiers of nonvintage, vintage, and flagship champagne. The results indicated that all income groups worked fewer hours for entry-level nonvintage bottles of champagne, whereas the number of hours required to purchase flagship bottles gen- erally increased.

This paper analyzes the impact of annual weather fluctuations on the total output of wine and on the share of output of different wine-quality categories in Germany, using a set of wine data from all thirteen German wine regions and daily weather data taken from regional weather stations. The empirical analysis suggests that rising average temperatures have a significantly positive impact on the total output of wine as well as on the output shares of wine in higher- quality categories. The number of freezing days appears to be detrimental to overall produc- tion; precipitation during the growing season impairs higher-quality wines in particular.

This paper analyzes wine price dispersion in the United Kingdom. In particular, we are inter- ested in examining whether Fairtrade wines are different from non-Fairtrade wines. Because Fairtrade wines serve an additional social purpose, one may think that consumers search less aggressively for the outlet with the lowest price, thus allowing for a larger price dispersion than for regular wines. We draw on data for about seven thousand wines from South Africa, Fairtrade and non-Fairtrade, sold in the United Kingdom between 2007 and 2012. In a first step, we run a hedonic regression model explaining the wine prices using Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) Instrumental Variable (IV) approaches. In the next step, we regress the squared residuals from the first step on a Fairtrade 0-1 dummy-variable. When using the squared residuals from the OLS model, we find that Fairtrade is a negative determinant of price dispersion. Therefore, Fairtrade wines exhibit a sig- nificant lower price dispersion than the comparison group. When using the squared residuals from the IV model, we find mixed results and suspect the presence of a substantial bias due to weak instruments. Finally, in order to avoid IV pitfalls, we ran Fairtrade and Non- Fairtrade wines in separate equations. We find support for the OLS results, i.e., Fairtrade wines appear to exhibit lower price dispersion than their non-Fairtrade counterparts. Whether this is due to consumer search is a priori unclear.