Skip to content
Have an account?
Login
or
Register
  • About
    • People
    • Fellows
    • Tastings
    • In the News
    • Awards
      • Christophe Baron Prize
      • AAWE Scholarships
      • AAWE Awards of Merits
    • Downloads
    • Contacts & Copyright
  • Journal
    • Online Journal Member Access
    • Online Journal Library Access
    • Editors
    • JWE – All Issues
    • Submission Guidelines
  • Working Papers
  • Meetings
    • 2024 Lausanne
    • 2023 Stellenbosch
    • 2022 Tbilisi
    • 2019 Vienna
    • 2018 Ithaca
    • 2017 Padua
    • 2016 Bordeaux
    • 2015 Mendoza
    • 2014 Walla Walla
    • 2013 Stellenbosch
    • 2012 Princeton
    • 2011 Bolzano
    • 2010 Davis
    • 2009 Reims
    • 2008 Portland
    • 2007 Trier
  • Membership
Menu
  • About
    • People
    • Fellows
    • Tastings
    • In the News
    • Awards
      • Christophe Baron Prize
      • AAWE Scholarships
      • AAWE Awards of Merits
    • Downloads
    • Contacts & Copyright
  • Journal
    • Online Journal Member Access
    • Online Journal Library Access
    • Editors
    • JWE – All Issues
    • Submission Guidelines
  • Working Papers
  • Meetings
    • 2024 Lausanne
    • 2023 Stellenbosch
    • 2022 Tbilisi
    • 2019 Vienna
    • 2018 Ithaca
    • 2017 Padua
    • 2016 Bordeaux
    • 2015 Mendoza
    • 2014 Walla Walla
    • 2013 Stellenbosch
    • 2012 Princeton
    • 2011 Bolzano
    • 2010 Davis
    • 2009 Reims
    • 2008 Portland
    • 2007 Trier
  • Membership
DONATE
  • Data
  • Jobs & Programs
  • Data
  • Jobs & Programs
Home
»
Working Papers
»
Working Papers
»
Page 4

All Working Papers

More results...

Search in title
Search in content
Year of Publication
Filter by Working Paper Categories
Economics
Business
History
History & Politics
Law
Policy
Unkategorized

Working Paper No. 187

Published: 2015
Category:
Business

Word of Mouth Impulses. Evidence from Wines of Germany

Frank R. Schulz
Full Text PDF
Abstract
After decades of inflationary applied advertisement investments in tv-, print and online media, todays’ consumers are exhausted. They switch tv-channels when commercials are being broadcasted, they bin promotion material when checking the letter box, they erase online- newsletters without having read them. ‘Wines of Germany’ (Deutsches Weininstitut DWI) conquers the given situation with word-of-mouth (WOM) marketing and –communications work. Presentations, seminars, press-, online- and social media work as well as conceptual sales impulses for the on- and off trade or gastronomy all serve a common goal: credible WOM recommendations. Combined with innovative and emotional communications work, the WOM action led to an increase in public awareness for Wines of Germany. It correlates with a moderate but steady increase in domestic and export value in an extremely competitive market. On the long run, memorable encounters of real people in real life situations (WOM) play a more effective and therefore central role in the sought-after awareness upswing then solely advertisements.
It must be frustrating for marketing experts that it is increasingly difficult to actually reach people. Social media marketing (SMM) made us believe that there’s an easy way to consumer’s attention – but it turned out to be more complicated: first of all social media activities always ask for authenticity, it never works to simply utilize existing promotion posters vertically through all media channels. People are very sensitive when it comes to credibility. Secondly, e.g. Facebook posts are not automatically being projected in your peer’s timeline any more (without paying for it). The more effective way is to reach influencers and multipliers through memorable situations, in order to make them tell your story/ spread your word (WOM). Therefore, DWI focuses on “ambassadors” - internally within the branch as well as externally in relations to the public – in order to initiate as many WOM impulses as possible.

Working Paper No. 186

Published: 2015
Category:
Economics

Quality and the Great Trade Collapse

Natalie Chen & Luciana Juvenal
Full Text PDF
Abstract
We explore whether the global financial crisis has had heterogeneous e¤ects on traded goods di¤erentiated by quality. Combining a dataset of Argentinean firm-level destination-specific wine exports with quality ratings, we show that higher quality exports grew faster before the crisis, but this trend reversed during the recession. Quantitatively, the effect is large: up to nine percentage points difference in trade performance can be explained by the quality composition of exports. This fight from quality was triggered by a fall in aggregate demand, was more acute when households could substitute imports by domestic alternatives, and was stronger for smaller firms’ exports.

Working Paper No. 185

Published: 2015
Category:
Business

Strength and Governance: The Argentine Grape-Wine Industry at the Crossroads

Aldo Biondolillo & Juan Pedro Brandi
Full Text PDF
Abstract
Over the last years there has been a debate about the “structural change” in emerging economies and their impact on the understanding of development. New types of structuralisms are discussed using the concept of value chain in certain production sectors that have undergone significant changes.
The objective of this paper is to contribute to the debate about the structural change of the Argentine grape-wine growing sector using the dual analysis of “Strengths and Governance”.
First of all, we wish to point out that viticultural production is carried out in imperfect markets where prices are the result of an asymmetric negotiation between the purchasing power of a demand that is concentrated in a few firms and an atomized supply that is in the hands of thousands of producers. We analyze the strengths resulting from the interaction between the internal factors characteristic of the production unit and the external forces that operate within a given business organization. We describe the manner in which the supplier is related to the resources and the markets. We combine the above analysis with the governance approach, which refers to the manner in which the relationship among the several actors engaged in grape-wine growing is governed. We also analyze the relationships between firms and institutional mechanisms through which coordination actions are implemented outside the market. Emphasis is laid on the importance of explicitly incorporating institutionality into the analysis of the grape-wine growing sector chain so as to make sure that enforcement agencies comply with decisions reached by “consensus”.
One first conclusion of the study refers to the complementariness of both approaches and, in both cases, there is a continuous segment that spans from “decentralized coordination to a more centralized one”. By learning how value chains are governed, it is possible to know how they affect suppliers’ “upgrade” (increasing the added value of the chain through innovation). The upgrade is illustrated with a case study in which the knowledge acquired by the innovative firm is spread within the grape-wine growing sector, giving rise to a positive externality that may be internalized by means of suitable public policy instruments.

Working Paper No. 184

Published: 2015
Category:
Business

Over%Production or Recession? Causes of the Low Prices of Table Wine in Argentina

Jorge A. Day
Full Text PDF
Abstract

Table wines do not shine like Malbec does in Argentina's wine industry; nonetheless
they represent two thirds of the wine produced in this country. A key economic indicator of this product is the price of the "vino de traslado” (bulk wine). A grape% grower has two options with his grape: he can sell it or he can elaborate wine (the “bulk wine”) and sell it later to a large winery. Thus, the price of the “bulk wine” is a reference of the incomes of grape%growers and small wineries.

In the last five years, this price has been very low, and consequently governments of wine provinces are under social pressure to implement policies to raise it by restricting wine supply and/or by buying wine. Why is this price so low? From a sectorial perspective, there is overproduction, with the consequent increase in wine stocks. This hypothesis is strengthened by the declining domestic consumption of this wine in Argentina for several decades, as well as in other major wine producing countries.

However, there is another view, a crisis one. Over a period of more than three decades, this reference price reaches the minimum levels in each recession in Argentina. After a while, in every economic recovery, this price has increased very strongly. Macroeconomic impacts seem strong.
This study will show in numbers both impacts (of overproduction and recession) on the price of “bulk wine” in the Argentine case. Given the relevance of this price for the grape%grower, the study will analyze the evolution of the producer share in the final price of wine (paid by consumers). In these years of low prices, producers have complained of lower share and there is a question whether this phenomenon is a trend observed over time.

Working Paper No. 183

Published: 2015
Category:
Economics

Effect of Information on Consumer Perception: Evidence from Restaurant Hygiene Grade Cards in New York City

Danyang Kang
Full Text PDF
Abstract
This study examines the effects of increasing provision of hygiene quality information on consumer assessment of restaurant quality. In July 2010 New York City introduced mandatory hygiene grade cards to be displayed in restaurants. I show that both an A grade and better inspection scores are correlated with higher ratings in food, decor, service and price, with the former having a larger impact. These results suggest that consumers give much credence to the information provided byhygiene grade cards but the underlying scores might not reflect the true hygiene quality of restaurants.

Working Paper No. 182

Published: 2015
Category:
Business

Examination of the Capital Structure in the Hungarian and French Wine Industry

Daniel Boda & Gabor Szucs
Full Text PDF
Abstract
The aim of the study is to analyze the capital structure of the Hungarian and the French wine industries and to examine the funding models. First, the database and the applied methods will be described followed by the descriptive statistical analysis of the industry. The analysis indicates the capital structure policy applied in the industry and, at the same time, evaluates its performance in terms of profitability and efficiency. The analysis examines the differences between the funding policies applied in the two countries, especially those variables that are the basis for the separation of the two branches. This was carried out by means of discriminant analysis, which indicates the financing characteristics. The main conclusion of the study is that the behavior of the factors explaining the development of the capital structure is significantly different in the examined countries.

Working Paper No. 181

Published: 2015
Category:
Economics

Response to the risk of climate change: A case study of the wine industry

Jeremy Galbreath
Full Text PDF
Abstract
The wine industry faces significant risks climate change, such that the security of future production is under threat. To address this risk, in this paper, a framework is proposed to examine responses to climate change in the wine industry. Building upon the literature and relying on expert input, the framework takes into consideration mitigative and adaptive actions across market-based, regulatory/standards-based, and operational-based levels. To explore the framework, a case study is developed for Treasury Wine Estates (TWE), one of the world’s largest wine producers. The case study reveals verification of the framework, with TWE relying on several technologies and unique processes to engage in many mitigative and adaptive actions across the proposed levels. The findings suggest several opportunities for future study.

Working Paper No. 180

Published: 2015
Category:
Economics

Reducing Quality Uncertainty for Bordeaux en primeur Wines: A Uniform Wine Score

Jean-Marie Cardebat & Emmanuel Paroissien
Full Text PDF
Abstract
In this paper we provide a simple and transparent non parametric methodology to express the scores of each wine expert (15) on the same rating scale. We discuss the advantage of this methodology over a linear transformation. The non paramatric method ensures the comparability of scores among experts and allows for a relevant average calculation of available wine scores. This approach may be usefuel to wine professionals who seek to reduce uncertainties leading to improved market efficiency. Uniform scores for many Bordeaux en primeur wines can be freely accessed at globalwinescore.com.

Working Paper No. 179

Published: 2015
Category:
Economics

Entrepreneurship and entry of small firms into a mature industry: the case of microbreweries in Italy

Christian Garavaglia
Full Text PDF
Abstract

This paper investigates the motives behind the entrepreneurial activity in the Italian beer industry between the late 1980s and mid-1990s. The paper argues that the evolutionary dynamics of the new producers (microbreweries and brewpubs) must be connected to the dynamics of consumption, which have gradually changed consumer preferences and lifestyles since the 1980s. On the one hand, increasing revenues, growing interest in food knowledge, and the rise of new cultural and social meanings attached to food consumption generated a new demand for variety. On the other hand, international integration increased the knowledge of beer typologies and styles. These changes enabled new small firms to enter the market and produce differentiated specialised products. This paper suggests that more research is required on the role of demand to interpret the dynamics of industries. The argument and discussion are based on original in-depth interviews with the pioneering entrepreneurs in Italy’s craft beer segment.

Working Paper No. 178

Published: 2014
Category:
Economics

California Women Winemakers: Three Studies Assess their Progress and Prospects

Lucia Albino Gilbert & John Carl Gilbert
Full Text PDF
Abstract
Women are a powerful economic force in the world’s wine market, with marketing of wines made by women to female consumers increasingly important. It is widely assumed that women winemakers in California have shattered the glass ceiling, but few studies have addressed their progress in what remains a male-dominated field. This paper reports on three separate studies assessing their progress. Study 1 assessed the perception that women winemakers have shattered the glass ceiling. Results showed that only 9.8% of California wineries have a woman as the lead winemaker, illuminating a discrepancy between perception and fact. Study 2 investigated whether winery acclaim was associated with this discrepancy. Coding of winery data in Opus Vino (2010) provided support for the hypothesis of proportionally greater acclaim for wineries having women as their lead winemakers. Study 3 tested the hypothesis that the recent increased recognition and visibility received by lead women winemakers is opening doors for other well-qualified women. Using the wineries included in Wine Spectator's California Wine (1999) for a case study, the same set of major wineries was investigated at two times—1999 and 2014. Two approaches were taken to assessing progress: comparing the percentage of wineries with lead women winemakers at both times, and comparing the percentage, taking into account position availability and pattern of gender hiring into available positions. Results showed some increase, 10% in 1999 to 14.7% in 2014 overall, and 20.5% when considering only available positions. Progress appears steady but slow.

Working Paper No. 177

Published: 2015
Category:
Business

The Beer Industry in Latin America

Daniel Toro-Gonzalez
Full Text PDF
Abstract
This document presents the current state of the brewing industry in Latin America with special attention given to micro brewing firms. We find that the market conditions in Latin America are favorable to significant growth in the brewing industry and particularly for craft and specialty beers. This study draws on a general overview of the industry in the region as well on five different countries.

Working Paper No. 176

Published: 2015
Category:
Economics

Why the liberalization of the EU vineyard planting rights regime may require another French Revolution

Giulia Meloni & Johan Swinnen
Full Text PDF
Abstract

In 2008, the EU voted to liberalize its system of planting rights which has strictly regulated vine plantings in the EU. However, after an intense lobbying campaign the liberalization of the planting right system was overturned in 2013 and new regulations created an even more restrictive system. European wine associations complained about the detrimental effects of the new regulations. There is a precedent in history. In 1726, the French political philosopher and landowner Montesquieu complained to the French King about the prohibition on planting new vines. Montesquieu was not successful in his demands to remove the planting rights. Old and recent history suggests that political forces against liberalization of planting rights are very strong. Only the French Revolution in 1789 led to a fundamental liberalization of planting rights. The “liberal period” of the 19th century was sustained by the combination of the French Revolution’s liberal ideology, the thirst for wine of Napoleon’s armies and diseases that wiped out most of the French vineyards.
That said, in the past and the present, enforcement of planting rights is a major problem. In fact, despite the official restrictions, Montesquieu managed to plant his vines, allowing him to become a successful wine producer and merchant and to travel and to spend time thinking, discussing and ultimately writing up his ideas which influenced much of the Western world’s constitutions.

Working Paper No. 175

Published: 2014
Category:
Business

Drowning in the Wine Lake: Does Choice Overload Exist in Wine Retail?

Douglas Zucker
Full Text PDF
Abstract
Research by many scholars studying consumer behavior has determined that choice overload can be a demotivating characteristic for consumers faced with a broad array of options. However this has yet to be studied at the wine retail level. Wine is unlike most consumer goods due to the large number of intrinsic characteristics relative to extrinsic ones, and the sheer number of choices in the category a consumer must choose from. Also salient is the general concept that as a wine consumer grows in experience they desire a broader range of choices.
A three-part study was designed to test for the existence of the choice overload effect: first a qualitative survey was sent to 4000 wine consumers (from a retailer’s email database) in order to establish a baseline of self- reported behavior in a wine shop environment. Next over 100 customers were observed as they shopped in a group of wine stores. Finally those same customers were interviewed post-purchase about their satisfaction with the wines they purchased.
Analysis of the data generated showed no evidence of the choice overload effect in any of the three phases of the study. An examination of how this retailer was able to mitigate and even eliminate the impact of choice overload was discussed, and points to future research in this field.

Working Paper No. 174

Published: 2014
Category:
Economics

The Political Economy of Geographical Indications

Koen Deconinck & Johan Swinnen
Full Text PDF
Abstract
Despite the growing importance of geographical indications (GI) for wines, cheeses, etc., relatively little attention has been devoted to studying the optimal size of a GI region, as well as how lobbying by interest groups may affect the actual size. We develop a political economy model of the size of geographical indications, taking into account possible effects on perceived quality as well as on cost sharing among producers. We show that the political process may result in a GI area that is smaller or larger than the social optimum, not just depending on the relative political influence of existing and potential producers, but also on how changes in quality affect consumer welfare.

Working Paper No. 173

Published: 2014
Category:
Economics

Trade liberalization in the presence of domestic regulations: Impacts of the proposed EU-U.S. free trade agreement on wine markets

Bradley J. Rickard, Olivier Gergaud, Shuay-Tsyr Ho & Wenjing Hu
Full Text PDF
Abstract
The United States and the European Union (EU) have embarked on ambitious negotiations to create a comprehensive free trade agreement known as the Transatlantic Trade and Investment Partnership (TTIP). Agricultural markets receive relatively high levels of support and protection in both regions, and therefore are sensitive to the discussions surrounding the TTIP. Wine is the highest valued agricultural product traded between the United States and the EU, and any reduction in trade barriers resulting from the TTIP has the capacity to generate additional trade in this sector. We carefully develop parameters to characterize the effects of tariffs and domestic regulations that affect production and consumption of wine in these two regions. Results show that reductions in tariffs would have relatively small effects in these wine markets, whereas reductions in EU domestic policies that affect wine grape production would have much larger trade and welfare implications.

Working Paper No. 172

Published: 2014
Category:
Economics

A Tale of Repetition: Lessons from Florida Restaurant Inspections

Ginger Zhe Jin & Jungmin Lee
Full Text PDF
Abstract
We examine the role of repetition in government regulation. Using Florida restaurant inspection data from 2003 to 2010, we find that inspectors new to the inspected restaurant report 12.7-17.5% more violations than the second visit of a repeat inspector. This effect is even more pronounced if the previous inspector had inspected the restaurant more times. The difference between new and repeat inspectors is driven partly by inspector heterogeneity in inherent taste and stringency, and partly by new inspectors having fresher eyes in the first visit of a restaurant. These findings highlight the importance of inspector assignment in regulatory outcomes.

Working Paper No. 171

Published: 2014
Category:
Economics

Inspection Technology, Detection, and Compliance: Evidence from Florida Restaurant Inspections

Ginger Zhe Jin & Jungmin Lee
Full Text PDF
Abstract

In this article, we show that a small innovation in inspection technology can make substantial differences in inspection outcomes. For restaurant hygiene inspections, the state of Florida has introduced a handheld electronic device, the portable digital assistant (PDA), which reminds inspectors of 1,000 potential violations that may be checked for. Using inspection records from July 2003 to June 2009, we find that the adoption of PDA led to 11% more detected violations and subsequently restaurants may have gradually increased their compliance efforts. We also find that PDA use is significantly correlated with a reduction in restaurant-related foodborne disease outbreaks.

Working Paper No. 170

Published: 2014
Category:
Economics

Excise Taxes on Wines, Beers and Spirits: An Updated International Comparison

Kym Anderson
Full Text PDF
Abstract
This note seeks to compare across countries the various excise taxes that are applied to wholesale prices for wines and other alcohols. Many of those taxes are volumetric (x dollars per litre of product or of the alcohol therein) while only a few are ad valorem, such as Australia’s 29%. To make the specific taxes comparable with the ad valorem ones, it is necessary to nominate wholesale price points in a common currency (AUD) and average alcohol contents (12.5% for wines, 5% for beers, 40% for spirits).
We present two types of comparisons of what we call the consumer tax equivalent (both of which ignore the GST or VAT that might then also be added at the retail level). One is the percentage by which the tax raises the wholesale price at particular price points. The other is the number of cents by which the tax raises the wholesale price per standard drink (=0.0125 litres of pure alcohol).

Working Paper No. 169

Published: 2014
Category:
Economics

Structure and Performance of Ethiopia’s Coffee Export Sector

Bart Minten, Seneshaw Tamru, Tadesse Kuma & Yaw Nyarko
Full Text PDF
Abstract
We study the structure and performance of the coffee export sector in Ethiopia, Africa’s most important coffee producer, over the period 2003 to 2013. We find an evolving policy environ-
SUMMARY | APRIL 201
ment leading to structural changes in the export sector, including an elimination of vertical integration for most exporters. Ethiopia’s coffee export earnings improved dramatically over this period, i.e. a four-fold real increase. This has mostly been due to increases in international market prices. Quality improved only slightly over time, but the quantity exported increased by 50 percent, seemingly explained by increased domestic supplies as well as reduced local consumption. To further improve export performance, investments to increase the quantities produced and to improve quality are needed, including an increase in washing, certification, and traceability, as these characteristics are shown to be associated with significant quality premi- ums in international markets.

Working Paper No. 168

Published: 2014
Category:
Business

Whose Terroir is it anyway? Comparing Chinese FDI in the French and Australian Wine Sector

Louise Curran & Michael Thorpe
Full Text PDF
Abstract

This paper explores recent developments in outward Foreign Direct Investment (OFDI) from Chinese companies in the wine sector in the Bordeaux (France) and West Australia (WA) regions. The objective is to explore the extent of the phenomenon, which although widely mediatized, has not been the subject of academic scrutiny. As OFDI official figures provide little detail, we undertook primary research in the two regions, in addition to analysis of secondary trade data.
Results indicate that the level of Chinese OFDI is relatively low, although the number and speed of acquisitions, especially in Bordeaux, has attracted attention. The motivations of investors in both regions were: the exploitation of growth in the home market; security of supply; prestige and diversification of risk. In Bordeaux the ‘appellation’ was a clear motivation, as were the vineyards’ historic buildings. A final motivating factor was the wish to avoid the complex supply chains in Bordeaux, by bringing wine direct to the Chinese market. In Australia, cementing existing business relationships, as well as access to Australian residency were specific motivations. Both regions have a relatively open investment climate and no significant investment barriers were noted, although the potential exists, especially as evidence emerges of illegal funding of some investments. We conclude with some directions for future research.

Working Paper No. 167

Published: 2014
Category:
Economics

Wine Historical Statistics: A Quantitative Approach to its Consumption, Production and Trade, 1840-1938

Vicente Pinilla
Full Text PDF
Abstract
This working paper provides a compilation of statistics on international wine consumption, production and trade from the mid-nineteenth century until the beginning of the Second World War. The statistical data is structured in three parts dealing with consumption, production and trade both at the world level and for a broad sample of countries. The data presented for Spain, France and Italy, the leading three nations in the wine market, are especially wide-ranging.

Working Paper No. 166

Published: 2014
Category:
Business

Strategies of Argentinean Wineries in Export Markets 2009-2011

Xavier Brevet, Jimena Estrella Orrego & Alejandro Gennari
Full Text PDF
Abstract
Argentinean wineries experienced a tremendous 4-time growth in their export value between 2000 and 2012, while for the same period the average rise of world wine exports was around 70%. Today, Argentina is the 9th biggest wine exporter in the world. The country has succeeded in building ”king of Malbec” notoriety and many of its wines rank as best sellers in foreign markets. This impressive growth is the result of the winning strategies wineries implemented years ago. Indeed, in the late 90’s the industry changed its model to focus on the production of quality wines and the development of foreign markets. New marketing and communication tools were created and have strongly contributed to wineries ́ success. Two decades later, new challenges for this quality model appear. On the one hand, wineries ́ margins are threatened by high inflation in Argentina. On the other hand, higher buyers ́ concentration in foreign markets defines wineries ́ reduced bargaining power. A descriptive analysis, based on Argentina Customs Office data, was carried out to understand last years ́ performance and identify possible trends. Grape varieties, vintages, price, marketplaces and bottle sizes are described. Main differences between foreign markets are pointed out. Four different categories of wineries are described based on their export volume. Their specific strategies in terms of price segment are assessed allowing an identification of their different profiles. Results show the price upgrading strategy of the Argentinean industry. Cheap wines have traded up towards premium category as the only way to deal with inflation pressures. Whereas some expensive wine have traded down towards premium category in an attempt to conquer consumers threatened by the ongoing economic crisis.

Working Paper No. 165

Published: 2014
Category:
Economics

Hide the Label, Hide the Difference?

Johan Almenberg, Anna Dreber & Robin Goldstein
Full Text PDF
Abstract
Marketing and packaging are substantial expenditures in many consumer products industries. We look at one such industry, mass-market lager beer, and show that when consumers taste blind, they cannot distinguish between three major competing beer brands. Our results suggest that brand loyalty in this market is likely to be driven largely by marketing and packaging, and not by the underlying sensory properties of the competing products.

Working Paper No. 164

Published: 2014
Category:
Economics

Blind Tasting of South African Wines: A Tale of Two Methodologies

Domenic Cicchetti
Full Text PDF
Abstract
The author compared two methods for assessing the reliability of blind wine tastings of South African Sauvignon Blanc and Pinotage white and red wines.
The first method required the taster to rank each of the 8 white and red wines from 1 for the most preferred to 8 for the least preferred, with tied ranks permitted when 2 or more wines were equally preferred. The second used scores representing a taster’s perceived quality of wine as: 50%-69% =Poor/Unacceptable;
70%-79%= Fair/Mediocre; 80%-89%= Good/Above Average; and 90%-100%= Excellent to Superior. Results indicated that the two methods provided quite different results with respect to the critical issue of identifying replicate wines; while the identification of replicate white and red wines proved successful when wine scores were used, not a single wine taster could successfully identify replicate white or red wines when using ranking methods. This finding, plus the fact that very different scorings can produce the very same rankings, such as 1, 2, and 3 being given scores of 60, 64, 66 (Poor/Unacceptable); 70,72, 76 (Fair/Mediocre);
80, 83, 87 (Good/Above Average; and 90, 95, 98. (Excellent to Superior), led to the conclusion that such flaws in the ranking method render it of very limited usefulness in the evaluation of the results of blind wine tasting.

Working Paper No. 163

Published: 2014
Category:
Economics

Wine: To Drink or Invest In? A Study of Wine as a Financial Asset in French Portfolios

Beysül Aytac, Thi Hong Van Hoang & Cyrille Mandou
Full Text PDF
Abstract

This paper aims to assess the role of wine as a financial asset in the diversification of French investors’ portfolios. Our 2007-2013 monthly database is composed of Liv-ex indexes and the WineDex indexes from iDealwine, an online platform for wine investment in France. We also include stocks, bonds and a risk-free asset and constitute several portfolios based on the degree of investor risk aversion, as proposed by Canner et al. (1997). Moreover, we compare wine to another alternative asset, gold. Using both mean-variance (Markowitz 1952) and mean value-at-risk (Favre and Galeano 2002) portfolio optimization, we find that portfolios with wine (or gold) are more efficient than portfolios without it. Moreover, we use the Sharpe (1964) and modified Sharpe (Gregoriou and Gueyie 2003) ratios to calculate performance and find that the higher the proportion of wine (or gold), from 5% to 50%, the higher the portfolio performance is. We also find that French wine indexes, particularly WineDex Bordeaux, are more profitable than gold or Liv-ex indexes. This suggests that French investors should invest in wine through iDealwine and not through Liv-ex.

Working Paper No. 162

Published: 2014
Category:
Economics

The Market Structure-Performance Relationship Applied to the Canadian Wine Industry

J. François Outreville
Full Text PDF
Abstract
The purpose of this research is to examine the relationship between market structure and performance in the wine sector using data from two Canadian provinces. Investigation is conducted on alternative hypothesis defined as the Structure-Conduct-Performance (SCP) hypothesis, the Relative-Market-Power (RMP) hypothesis and the Efficiency Structure (ES) hypothesis. The performance is measured by the number of awards gained by wineries. Using regression analysis, we find support to the ES hypothesis. The empirical findings suggest that more research should be done on the efficiency structure of wineries in their respective markets.

Working Paper No. 161

Published: 2014
Category:
Economics

Financing Wine Barrels: the Vincorp Model

Nick Vink, Theo Kleynhans & Willem Hoffmann
Full Text PDF
Abstract

The use of oak barrels to improve the quality of wine and to aid in the maturation process has a long history (Garde-Cerdán and Ancín-Azpilicueta, 2006), and has become a core part of the expertise of wine makers globally. Wine barrels are expensive, and constitute a considerable share in the cost of making a fine wine - this is why it is estimated that only 4% of wineries world-wide use them (Anson, 2013). Yet there is not much in the literature on the financing models available to wine makers, or on how they decide on the optimal financing strategy, although some authors do address the issue tangentially (e.g. Carter, 2012; Monday and Wood-Harper, 2010; Blake et al., 1998). This is arguably because there are really only two financial models in use around the world: buy the barrels with own funds, or borrow directly or indirectly from a bank using a conventional loan instrument with collateral. This neglect exists despite the more recent emphasis on value chain financing in the literature (e.g. Miller and Jones, 2010).
Elsewhere in the world wine makers have the option of a) buying barrels with their own funds; b) of borrowing in the form of a collateralised loan or a lease from the traditional banking sector or from a wine industry-specific bank; or c) of taking out a lease in the form of barrel-specific lending. The second of these options represents a conventional financial model. The lease option works much like vehicle finance. The owner of the equipment (in this case wine barrels), also called the lessor, gives a client the opportunity to rent the equipment over a fixed time period against an agreed rental payment. The lessee has the option to return the equipment after the expiry of the agreed term, or to take over ownership in the event that there was a buyout option (Kirkham, 2011). The lessor typically gains a tax advantage in writing down the value of the capital asset. The lessee frees their capital for other uses, especially after the harvest when wine making incurs a host of other costs. In a lease the equipment itself is the collateral for the loan, unlike a regular loan, where additional collateral may be required.
The third option, barrel-specific lending, is found in different variations in France and in South Africa. The purpose of this paper is to describe the origins of the rental model in use in these two countries, and to describe the business model that has been put in place to gain access to the market. The attention then shifts to the identification of those characteristics of the market in wine barrels that make the South African version of the model suited to the needs of the local market. The paper ends with some information on international trade in wine barrels as an indication of market size and some reflections on how to grow the business.

Working Paper No. 160

Published: 2014
Category:
Economics

An Analysis of Wine Critic Consensus: A Study of Washington and California Wines

Eric T. Stuen, Jon R. Miller & Robert W. Stone
Full Text PDF
Abstract
We examine the degree of consensus in quality ratings of US among prominent wine publications. Ratings are an important source of information for both wine consumers and wine researchers. For the purpose of wine research, are ratings on the ubiquitous 100 point scale reliable, objective measures of quality? The value of expert judgment has been called into question by a number of studies, especially in the context of wine competitions and tasting events. Our study is part of a much smaller literature focusing on ratings by expert critics. We look at four publications: Wine Spectator (WS) and Wine Enthusiast (WE), which review a broad selection of the wine market, and Wine Advocate (WA) and International Wine Cellar (IWC), which are more selective and focus more on the high-end of the market. We find a similar level of consensus, measured by the correlation coefficient, between some pairs of critics regarding wines from California and Washington as Ashton (2013) does for critics of Bordeaux wine. However, among other pairs the correlation is much lower, suggesting almost no consensus. Consensus is not found to be related to the blinding policies (or lack thereof) of the critical publications. Our findings show that quality ratings have a substantial degree of objectivity to them.

Working Paper No. 159

Published: 2014
Category:
Economics

Holly[wine] or Wine in the American Cinema

Raphael Schirmer
Full Text PDF
Abstract
Eighty years after Prohibition, the United States of America has become the world's largest consumer of wine and the fourth largest producer. The role of the country is comparable at the world level to the role of England in the eighteenth and nineteenth centuries in Europe: a hub within the wine-producing economy, with a leading role as taste-maker, with a remarkable effect of construction or transformation of the territories of wine. American cinema tends to reflect this new passion for the wine in the society. The whole point is to understand the discourse it holds, as well as the imaginary which it builds around this drink. Wine has become almost commonplace regarding its appearances on screen, not in what it means. In order to be more democratic, America seeks to get rid of old codes that rule all that surrounds wine.

Working Paper No. 158

Published: 2014
Category:
Business

Does ‘Liquid Geography’ Facilitate Cooperation or Competition? A Study of Sub-Clusters, Knowledge Exchange, and Innovation in the Wine Industry

Jeremy Galbreath
Full Text PDF
Abstract
The relationships between cooperation and competition are a central element of geographically defined clusters. This article advances an understanding of the cooperation–competition nexus by examining how firms in three regional wine clusters in Australia engage in knowledge exchanges about climate change. The findings suggest that, in the main, firms across all three regions appear to be predominantly engaging in these specific knowledge exchanges within their own narrow sub-clusters. This so-called ‘liquid geography’ is suggestive of a somewhat competitive lock-out posture. However, firms in ‘elite’ sub-clusters appear to be cooperating more via external knowledge exchanges, albeit perhaps with self-interest in mind. The results also suggest that only with respect to adaptive climate change innovations (as opposed to mitigative innovations) do implementation rates differ. This appears to be advantaging firms in elite sub-clusters over all other firms in the regions. Implications are discussed along with future research directions.
« Previous Page1 Page2 Page3 Page4 Page5 Page6 Page7 Page8 Page9 Page10 Next »

Submission

Please send your papers as PDF files to
aawe@wine-economics.org
Papers will be quickly reviewed, prior to potential posting on the website. Decision will be to post or not, possibly with short comments, but without referee reports. The decision will be based primarily on the suitability of the paper’s topic to the aims of the Association.
Such decisions are independent of publication decisions for the Journal of Wine Economics.

Working Paper publication requires that at least one author
is a regular member of AAWE.

Subscribe to our Email List

You can cancel your subscription at any time.
SUBSCRIBE HERE

Contact

AAWE
Economics Department
New York University
19 W. 4th Street, 6FL
New York, NY 10012, U.S.A.
Tel: (212) 992-8083
Fax: (212) 995-4186
E-Mail: karl.storchmann@nyu.edu

AAWE

Journal

Working Papers as a List

Membership

Videos

LINKS

Fifthsense

JWE at Cambridge University Press

Liquid Assets

Stuart Pigott

Privacy & Cookies Policy

Privacy Policy

Cookies Policy

Twitter Facebook-f Youtube

© AAWE 2021 - All rights reserved