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 kilo- gram 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.
Persistent Patterns in the U.S. Alcohol Market: Looking at the Link between Demographics and Drinking
Global consumption patterns for alcoholic beverages are evolving, with some convergence in per capita consumption among nations, as traditionally beer-drinking nations increase their consumption of wine and, conversely, wine-consuming nations shift towards beer. In a forth- coming article (Hart and Alston, 2019), we explore regional patterns of alcoholic beverage consumption within the United States. One purpose is to see if similar patterns of spatial con- vergence in consumption patterns can be observed within countries as have been documented in international comparisons. A more fundamental purpose is to explore the converse question and seek to better understand the persistent differences in alcoholic beverage consumption among groups. These issues are addressed using annual U.S. national and state-level data over four decades and, for the more recent period, supermarket scanner data at finer scales of geopolitical aggregation. This proceedings article focuses on the analysis using supermarket scanner data. We find that socioeconomic and demographic variables appear to play signifi- cant roles in accounting for the spatial differences in consumption patterns.
Income Inequality and Status Symbols: The Case of Fine Wine Imports
Britta Niklas & Elkhan Richard Sadik-Zada
JEL Clasification: C19, D01, D12, D31, L66
This survey investigates the inequality-fine wine imports nexus. To this end, the study employs cointegration techniques to analyze two panel datasets, one of which will analyze data from 12 countries between 1871 and 2018, and another that analyzes data from 66 countries between 1995 and 2017. Estimations indicate that income inequality leads to more fine wine imports in the long run. Changes in income have only a short-term effect on fine wine imports. Nonlinear autoregressive distributed lag (NARDL) estimators reveal an asymmetric long-run relationship between income inequality and fine wine imports in the cases of Argentina and the United States.
The Role of Craft Breweries in Expanding (Local) Hop Production
Elizabeth A. Dobis, Neil Reid, Claudia Schmidt & Stephan J. Goetz
JEL Clasification: L66, Q11, R30
Hop production has expanded dramatically in recent years along with the number of local craft breweries, but to date the relationship between these two phenomena has not been explored systematically. Using a state-level pooled count data model with observations from 2007, 2012, and 2017, we examine the independent lagged effects of breweries on the number of hop farms and acres grown, holding constant fixed effects and key economic and geographic factors. Our results confirm that the number of breweries is associated with more hop production (farms and acres) five years later, while warmer temperatures and higher land prices discourage it.
Collective Economic Conceptualization of Cider and Wine Routes by Stakeholders
L. Martin Cloutier, Laurent Renard & Sébastien Arcand
JEL Clasification: D02, L23, L26, L66, Q18
The coherence and systemic strength of the collaborative process among thematic route stake- holders are key factors to economic success for individual businesses and regional economic development. The objective of this article is to identify the economic action set to rejuvenate the Cider Route and the Wine Route of the Montérégie region (Quebec, Canada). Group concept mapping is used to estimate the conceptualization and perceptions of stakeholders (cideries, wineries, tourism professionals, visitors) regarding the articulation of the action set. The contribution is threefold. Methodologically, the approach taken supports both the estimation of the concept map and associated perception measures. Empirically, eight action clusters are identified to articulate stakeholders’ “organizational” and “selling” dimen- sions of the routes. Practically, action priorities identified and feasibility constraints are helpful to target the capability development support needed by route stakeholders to collaborate.
Personality Traits and Consumption of Wine and Beer
Geir W. Gustavsen & Kyrre Rickertsen
JEL Clasification: D12, Q13
Little attention has been paid to the effects of personality traits on the consumption of wine and beer. We used a survey to investigate the associations between personality traits and the differences in expected consumption frequencies of wine and beer for 3,482 Norwegian respondents. High scores on extraversion and openness to experiences increased the expected frequency of wine consumption, high score on agreeableness reduced the frequency of wine consumption, while scores on conscientiousness and neuroticism had no effects. For beer, there were no significant effects between personality traits and the frequency of consumption.
On Pricing Unconventional Prepaid Forward Contracts: Evidence from en primeur Fine Wine
Marcin Czupryna, Michał Jakubczyk & Paweł Oleksy
JEL Clasification: G12, G15, L66, Q02
An en primeur agreement is an unconventional forward contract. In this article, we provide a new conceptual framework for analyzing the properties of en primeur prices based on the cost of carry approach. The results, based upon Bayesian modeling, indicate that the cost of carry increases up to 0.9598 when en primeur and bottled wines are traded in parallel. Moreover, our findings confirm that price dispersion around the mean value is greater for en primeur wines (22.42%) than for standard bottled wines (8.2%) traded after the sale of en primeur wines has ended.
Spanish Wine Cooperatives’ Business Performance: Innovation Capabilities and Miles and Snow Strategies
Juan-Ramón Ferrer, Silvia Abella-Garcés & María-Teresa Maza
JEL Clasification: L66, M10, P13, Q13
Agricultural cooperatives’ economic performance and efficiency today have great economic and social relevance. Consistent with the recent literature, this article examines wine cooper- atives and compares them with wine investor-owned firms, studying their innovation capabil- ities, Miles and Snow strategies, and performance. A survey was conducted in all the wineries in Spain, with 339 responses. The interactions between the independent variables and the dependent variable were analyzed using the logit regression model. The study points out that cooperatives do not have fewer innovation capabilities, nor are they more inefficient, than investor-owned firms, although the factors that modulate their economic performance are different.
The Role of Individual Risk Attitudes on Old Wine Valuations
Nikolaos Georgantzís & Jean-Christian Tisserand
JEL Clasification: C91, D44, L66
In this article, we report the results of an experiment designed to address the effect of risk atti- tudes on valuations of aged wines. We find that higher risk taking in the economic domain is associated with a significantly higher willingness to pay for an old wine. Given the increasing interest of consumers and investors in old wines, our results are applicable to the pricing of old wines and to the use of auctions as an efficient willingness to pay elicitation mechanism.