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Hedonic Price Functions and Wine Price Determinants: A Review of Empirical Research

  • Jean-François Outreville ORCID logo EMAIL logo and Eric Le Fur
Published/Copyright: January 11, 2020

Abstract

The objective of this paper is to present a descriptive review of all the studies published on wine price determinants. The selection process has been carefully designed to assure that we cover the complete literature of hedonic price functions and wine price determinants. Because of the heterogeneity among these studies, the objective was to classify all the determinants in clusters related to geographical and agricultural factors, time horizon, public information and, supply factors (production costs and volume of production).

For this review, we have identified a list of 117 papers published on price determinants over the period 1993 to 2018.

JEL Classification: C83; Q11

Acknowledgements

We acknowledge the valuable comments received from the Editor and a reviewer. Errors and omissions remain our responsibility.

Appendix

A Survey of the Literature on wine price determinants

Author(s) Region/Data Geographical/viticulture Temporal factors Public information Production costs/Quantity supplied
Golan – Shalit (JAE, 1993) Israeli and Californian wines/Israeli Wine Institute Grape variety Chemical characteristics

Taste
Ginsburgh – Monzak – Monzak (VDQS, 1993) Bordeaux – 808 prices from 102 Chateaux collected in 1990–1991 – Weather

Soil

Grape variety
Age Label

Reputation

Ranking
Vinification process
Oczkowski (AJAE, 1994) Australia/Shield and Meyer wine guide 1991-1992/Suggested price Grape variety Age Rating

Label
Type of wine

Producer size
Ashenfelter – Ashmore – Lalonde. (Chance, 1995) Bordeaux/vintages from 1952 to 1980 and 1981 to 1992. Weather Age
Byron – Ashenfelter (ER, 1995) Australia/Penfold’s Grange Hermitage/1951–1980 Weather Age
Nerlove (EER, 1995) World (Sweden)/Monopoly Vin och Sprit 1989–1991 (102 weeks) Taste

Chemical analysis
Color, Origin
Di Vittorio – Ginsburgh (JSSP, 1996) 60 Chateaux in Medoc/40 vintages (1949–1989) Weather Age, Vintage Reputation

Ratings
Size and number of bottles
Gabbert – Schamel – Witzke

(WP, 1996)
U.S. data for premium wines from Napa Valley, Sonoma Valley, Washington State, France (Bordeaux and Burgundy), Australia, and Chile. Reputation

Quality
Combris – Lecocq – Visser (EJ, 1997) Bordeaux/Report « 50 millions de consommateurs » December 1992/Retail price at winery Vintage Ranking

Label

Taste
Type of wine
Landon – Smith (JCP, 1997) Bordeaux/Wine Spectator 1989–1990 Region of origin Vintage Reputation

Ranking
Number of cases
Gergaud (EP, 1998) 286 Champagnes /

Reports « 50 millions de consommateurs »

et « Que Choisir »
Label

Grade

Taste
Type of wine

Distribution channel
Landon – Smith (SEJ, 1998) Bordeaux/Wine Spectator 1989–1990/Suggested price Grape variety Vintage Reputation

Label
Schamel – Gabbert – Witzke (Book, 1998) Wines from Napa Valley and Sonoma Valley,

France (Bordeaux and Burgundy), Australia, and Chile.
Quality

Collective reputation
Unwin (JWR, 1999) Data sources used in Oczkowski (1994), Nerlove (1995), and Combris, Lecocq, and Visser (1997) Quality
Angulo – Gil – Gracia – Sanchez (BFJ, 2000) Spain/Guia de Vinos Gourmet 1998/Suggested price Grape variety Vintage Experts ratings

alcoholic content
Combris – Lecocq – Visser (AE, 2000) Burgundy/Report « 50 millions de consommateurs » November 1993/Retail price at winery Vintage Ranking

Label

Taste
Type of wine
Schamel (WP, 2000) New World/Wine Spectator 1990-2001/Suggested price Region of origin Quality level Type of wine

Number of cases

Scarcity
Oczkowski (ER, 2001) Red and White wines from the Penguin Guides published in 1999 and 2000. Age Reputation

Quality
Color
Jones – Storchmann (AE, 2001) 21 of the Bordeaux Crus Classés /

1980-1994
Weather

Grape variety
Age Ranking

Chemicals

Label
Producer size

Scarcity
Horowitz – Lockshin (JWR, 2002) Australia

and New Zealand Wine Companion 2000
Grape variety Vintage Rating

Label
Morilla Critz – Valderrama

(EAP, 2002)
Spain/Penin Guide for Spanish wine 1999-2000/Suggested price Grape variety

Region of origin
Vintage Rating Winery size
Bombrun – Sumner (AIC, 2003) United States/Wine Spectator 1995-2001/Suggested price Grape variety

Region of origin
Vintage Tasting score
Ling – Lockshin (AMJ, 2003) Australia/1880 wines collected from The Australian & New Zealand Wine

Industry Directory
Grape variety

Region of origin
Age Reputation Winery size
Schamel (GJAE, 2003) 4,141 German wine from annual national wine competition (Bundesweinprämierung) (year 2000) Region of origin Age Quality level Award
Schamel – Anderson (ER, 2003) Australia and New Zealand/James Halliday’s wine ratings (1992–2000 Australian vintages and 1993–2000 New Zealand vintages) and Wine State magazine (1992–1999 Australian vintages and 1994–1999 New Zealand vintages)/Suggested price Grape variety

Region of origin
Vintage Label
Cardebat – Figuet (AEL, 2004) Bordeaux wine prices for the 1996–1999 vintages Vintage Taste

Ranking

Label
Color
Chiffoleau – Laporte (RFS, 2004) Burgundy/Surveys between March and May 2002/28 wine estates Perceived quality Cost of production

Competition
Steiner (Agribus, 2004a) Australia wines in Great Britain/AC Nielsen August 1994/Retail price Grape variety

Region of origin
Vintage
Thrane (JWR, 2004) 171 French red wines/Norwegian State Wine Monopoly Region of origin Vintage Taste

Alcoholic content
Bicknell – Friesen – MacDonald (NZARES, 2005) New Zealand/Michael Coopers annual series of Buyer’s guide to New Zealand wines 1994-2003/Suggested price Region of origin Ranking
Melo – Buzeta – Marshall (AEAC, 2005) Chile/Direct survey 1–September 15, 2003/Retail price Vintage
Noev (EEE, 2005) Bulgaria/Wines produced during 1989-1999/Bulgarian magazine Bacchus Reputation

Quality
Haeger – Storchmann (AE, 2006) California and Oregon Pinot Noir/451 wines in Wine Spectator between 1998 and 2003 Weather

Climate

Region of origin
Age Level of production
Lecocq – Visser (JWE, 2006a) Bordeaux and Burgundy/Report « 60 millions de consommateurs » December 1992 for Bordeaux, November 1993 for Burgundy, and October-November 2001 for the Bordeaux/Retail price at winery Vintage Taste

Ranking

Label
Lecocq- Visser (JWE, 2006b) En primeur Bordeaux Market, 242 chateaux Weather
Lima (JWE, 2006) United States/Californian Tastings/Suggested price Grape variety Vintage Medals
Schamel (Agribus, 2006) World/Wine Spectator/Suggested price Grape variety

Region of origin
Age Number of cases
Troncoso – Aguirre (SJAR, 2006) Chile/Wine Spectator/Suggested price Grape variety

Region of origin
Age
Wood – Anderson (JWE, 2006) Australia/over the period 1988–2000. Weather Age Viticulture process
Costanigro – McCluskey – Mittelhammer (JAE, 2007) California and Washington States /

13,157 observations from 1991–2000 reported in the Wine Spectator Magazine
Grape variety Age Rating score

Label
Number of cases
Hadj Ali- Nauges (AJAE, 2007) France/Broker house in Bordeaux Vintages 1983-1998/Primeur price Vintage Ranking

Reputation
Livat (EP, 2007) Bordeaux/129 prices from 1991 to 2002 Region (AOC)
Miller – Genc – Driscoll (JWR, 2007) California/Wine Spectator/Suggested price Rating

Label
Bottles production

Storage
Rabkin – Beatty (CPP, 2007 British Columbia/Vintners Quality Alliance certification Certification
Ashenfelter (EJ, 2008) Bordeaux/market

price in London of six Bordeaux chateaux for ten vintages from

1960 to 1969
Weather Age
Bentzen – Smith (IJWBR, 2008) Champagne/Prices in the Scandinavian market Taste

Ranking
Type of wine
Carew – Florkowski (JWE, 2008) Australia/Prices 2002–2004 in Canada/Data from the BC Liquor

Distribution Branch/Retail prices
Grape variety Brand

Alcohol content
Florkowski – Carew – Hee (EAAE Congress, 2008) Italian wines sold in British Columbia/April 2002-May 2004/Monopoly British Columbia Liquor Distribution Branch/Retail price Grape variety

Region of Origin
Brand
Gergaud – Ginsburg (EJ, 2008) Bordeaux-Medoc/interviews in 102 châteaux Soil Age Viticulture process
Gonzalez – Melo (REA, 2008) Chile/La Cave Magazine/Suggested price Vintage Ranking
Hadj Ali – Lecocq – Visser (EJ, 2008) Bordeaux/Primeur wines/250 châteaux from The Wine Advocate Parker grades
Hodgson (JWE, 2008) 65 Panels of Judges from 2005 to 2008/ Judgement
Lutzeyer (WP, 2008) Stellenbosch/Wine Magazine, John Platter Wine Guide/Retail price Age Label

Quality

Ratings
Outreville (Eno, 2008) 26 wines/Data collected in Savour Club period 1988–2007. Region (AOC)
Ramirez (JWE, 2008) Napa valey/6000 observations from 1970 to 2004/Wine Spectator Weather
San Martin – Brummer – Troncoso (AAWE, 2008) Argentina/Wine Spectator 2006/Suggested price Region of origin Vintage Rating
Benfratello – Piacenza – Sachetto (AE, 2009) Italy/Direct survey, Wine Spectator, Duemila Vini/Retail price Reputation

Taste

Alcoholic content
Type of wine

Bottles production
Cardebat – Figuet (AEL, 2009) Alsace, Beaujolais and Provence/140 wines/jury of experts Region (AOC) Vintage Taste
Gibbs – Tapia – Warzynski (JWE, 2009) Californian, Spanish and Bordeaux wines/15 vintages of data (1990–2004)/Wine Advocate Age Reputation

Parker grades
Luppe – Lopes Fávero – Prado Belfiore (WP, 2009) Brazil/Retail price Grape variety

Region of origin
Vintage
Panzone – Simoes (JWR, 2009) Portugal/Online data July 2007/Portuguese retailer (Continente hypermarket)/Retail price Region of origin Vintage Type of wine, Bottle size
Schamel (JWE, 2009) 11 countries/56,661 observations /

Wine Spectator vintages 1999 through 2004
Grape variety

Region of origin
Age Ratings
Thrane (AEl, 2009) German and French white wines/Retail prices/Norwegian State Wine Monopoly Region Vintage Sensory variables
Ashenfelter (JWE, 2010) Bordeaux/six châteaux from the ten vintages from 1960 to 1969. Weather Age, Vintage Reputation
Costanigro – McCluskey – Goemans (AJAE, 2010) California/Wine Spectator – Wines and Vines Directory of Wineries Buyer’s Guides Grape varieties Vintage Reputation (ratings)
Dubois – Nauges (IJJO, 2010) Bordeaux/108 châteaux/primeur wines from 1994 to 1998/ Weather Label

Ranking

Ratings
Hadj Ali – Lecocq – Visser (JWE, 2010) Bordeaux/en primeur prices for 250 chateaux Appellation of origin Age Parker grades
Hay (SER, 2010) Bordeaux/En primeur prices/ Parker grades
Oczkowski (Agribus, 2010) Australia /6000 prices Region, grapes vintage Winery reputation Type of wine
Ortuzar.Gana – Alfranca.Burriel (SJAR, 2010) Chile/AC Nielsen September 2004-September 2006/Regular price
Schnabel – Storchmann (JAFIO, 2010) Germany/2 data sets/

wholesale prices from the Mainz Wine Trade

Fair (Mainzer Weinbörse)

Gault Millau

wine guide for Germany
Weather Quality level
Ramirez (JWE, 2010) 2734 descriptions of cabernet sauvignon wines from NapaValley published by Wine Spectator for wines from the 2000 through 2006 vintages. Age Sensory variables

tasting notes
Number of cases
Ashton (JWE, 2011) Data from the “Judgment of Paris,” the 1976 blind tasting Judgement
Boatto – Defrancesco – Trestini (BFJ, 2011) Italy/Direct survey June-December 2006/Retail price Vintage Ranking
Brentari – Levaggi – Zuccolotto (FQP, 2011) Italy/Guirda di Vini prepared by Altroconsumo (Italian independent consumer association)/Suggested price Region of origin

Appellation
Chemical characteristics

Taste
Chevet – Lecocq – Visser

(AER, 2011)
Pauillac-Bordeaux /

1980-2009
Weather Yields
Costanigro and McCluskey 2011 California and Washington States/13,157 observations/Wine Spectator Magazine Grape variety

Region of origin
Age, Vintage Ratings Number of cases
Cross – Plantinga – Stavins (AER & JWE, 2011) Northwest Farm Credit Services. 104 sales of properties in the Willamette Valley. 1995–2007 Location, Size
Hilger – Rafert – Villas Boas (RES, 2011) US national retail grocery chain/March 2006 Expert review

Label
Kwong – Cyr – Kushner – Ogwang (CJAE, 2011) Ontario/Ontario’s Monopoly Liquor from Control Board of Ontario/Retail price Vintage Label, Ratings Type of wine
Panzone (BFJ, 2011) 134 wines from Eastern European countries/year 2006 British wine expert
Schroeter – Ritchie – Rickard (JA, 2011) Riesling wines/1997 to 2009/Wine Spectator Online Country of origin Vintage Ratings (WS) Type of wine

Number of cases
Yoo – Florkowski – Crew (AAEA, 2011) Argentina, Brazil, Chile, Croatia and Hungary sold in British Columbia/Monopoly British Columbia Liquor Distribution Branch April 2002-May 2004/Retail price Region of origin
Ashton (JWE, 2012) Bordeaux Judgement
Friberg and Gronqvist (AEJAE, 2012) Swedish retail market/2002-2007 Vintage Expert review

Label
Loose and Szolonoki (FQP, 2012) Chicago and Tampa/AC Nielsen Scantrack, retail prices, unit sales and store availability/149 retailer chains and 18 liquor/April 2007-April 2008 Packaging
Priilaid – Van Rensburg (IJWR, 2012) South Africa/1358 wines in 2007/John Platter’s South African Wine Guide Grape variety Ratings
Rössel-Beckert (AAWE, 2012 Germany/248 wineries in Rheingau and Rheinhessen Judgement
Ashenfelter – Jones (JWE, 2013) Bordeaux/Liquid Assets: The International Guide to Fine Wines Weather Age Ratings
Ashton (JWE, 2013) Bordeaux/Wine guides 2004-2010 Ratings
Caracciolo – Cembalo – Pomarici (IJFS, 2013) Aglianico (Italian grape variety)/Three of the most popular Italian wine guides: Ais Duemilavini, Gambero Rosso, Veronelli Ratings, Certification
Corsi-Strom (JWE, 2013) Piedmont-Italy/Questionnaire/171 farms and 389 wines produced Grape variety

Region (DOC, DOCG)
Size of domain

Education of producer
Cuellar – Claps (JWR, 2013) California/Nielsen Scantrack December 2004-February 2009/Wine Spectator/Retail price Region of origin

Grape variety
Ratings
Frick – Simmons (JWR, 2013) Riesling wines from the Mosel valley/70 wineries Ratings
Ginsburgh – Monzak – Monzak (JWE, 2013) Bordeaux – 808 prices from 102 Chateaux collected in 1990–1991 – Weather

Soil

Grape variety
Age Label

Reputation

Ranking
Vinification process
Outreville (Book, 2013) Champagne and Bordeaux/Posted prices and auctions prices Region of origin Size of bottles

Scarcity
Roma – Di Martino – Perrone (AE, 2013) Sicilian wines/Wine guides/Retail price Region origin

Grape variety
Age, Vintage Label

Guides’ grades
Producer size
Cardebat – Figuet – Paroissien (JWE, 2014) Bordeaux/Retail prices/203 wine producers Weather Experts ratings
Levaggi – Brentari (Agribus, 2014) Italy/Supermarkets and wine shops 2005-2009/Retail price Label

Ratings
Oczkowski – Doucouliagos (AJAE, 2015) Meta-analysis/180 hedonic wine price

models developed over 20 years,
Grape variety

Region of origin
Vintage Reputation

Sensory

quality
Dimson – Rousseau – Spaenjers (JFE, 2015) Bordeaux premier Crus/data collection 1900-2012/ Weather Age, Vintage Yields
Di Vita – Caracciolo – Cembalo – Pomarici – D’Amico (AJAS, 2015) Sicilian wines Protected Designation Origin

Protected Geographical Indication
Brand
Masset – Weisskopf – Cossutta (JWE, 2015) Bordeaux/12 wine critics vintages 2003–2012 region Vintage Experts ratings
Oczkowski (AJARE, 2015) Australia/Wine guide/retail prices, actual market price Grape variety

region
Sensory quality

Ratings

Winery reputation
Producer size
Cardebat – Livat (IJWBR, 2016) 62 Bordeaux/5 experts 2003-2011 Region of origin

Weather
Ratings
Delmas – Gergaud – Lim (JWE, 2016) California/Wine Advocate/Wine Enthusiast/Wine Spectator 1998 – 2009 Age Ratings

Ecocertification
Cases produced
Oczkowski (JWE, 2016) (a) Australia/6,314 wines, made by

1,284 producers, covering 66 regions and 44 varieties
Weather

Grape variety

Region of origin
Vintage Ratings
Oczkowski (JWE, 2016) (b) Australia/9 vintages produced by 175 wineries Weather Vintage Quality rating

B List of acronyms

AAEA

Agricultural and Applied Economics Association

AAWE

American Association of Wine Economists

ADCC

Asymmetric Dynamic Conditional Correlations

AEJAE

American Economic Journal: Applied Economics

AE

Applied Economics

AEAC

Asociacion de Economistas Agrarios de Chile

AER

American Economic Review

AES

Annales d’Economie et de Statistiques

AgE

Agricultural Economics

AEL

Applied Economics Letters

AER

American Economic Review

Agribus

Agribusiness

AIC

Agricultural Issues Center-U. California

AJARE

Australian Journal of Agricultural and Resources Economics

AJAS

American Journal of Applied Sciences

AMJ

Australian Marketing Journal

AmJAE

American Journal of Agricultural Economics

AuJAE

Australian Journal of Agricultural Economics

BFJ

British Food Journal

BTP

Business: Theory and Practice

C

Chance

CJAE

Canadian Journal of Agricultural Economics

CPP

Canadian Public Policy

EAAE

European Review of Agricultural Economics

EAP

Estudios Agrisociales y Pesqueros

EER

European Economic Review

EEE

Eastern European Economics

EJ

Economic Journal

EMR

Emerging Markets Review

Eno

Enometrica

EP

Economie et Prévisions

ER

Economic Record

FQP

Food, Quality and Preferences

GARCH

Generalised Auto-Regressive Conditional Heteroskedascity

GJAE

German Journal of Applied Economics

HR

Hedonic Regression

IJESB

International Journal of Entrepreneurship and Small Business

IJFS

Italian Journal of Food Science

IJIO

International Journal of Industrial Organization

IJWBR

International Journal of Wine Business Research

JA

Journal of Agribusiness

JAE

Journal of Agricultural Economics

JAI

The Journal of Alternative Investments

JAFIO

Journal of Agricultural and Food Industrial Organization

JCM

Journal of Consumer Marketing

JCP

Journal of Consumer Policy

JFE

Journal of Financial Economics

JPE

Journal of Political Economics

JSSP

Journal de la Société Statistiques de Paris

JWE

Journal of Wine Economics

JWR

Journal of Wine Research

LA

Liquid Assets

NZARES

New Zealand Agricultural and Ressource Economics Society

REA

Revista Economía Agraria

REEP

Review of Environmental Economics and Policy

RES

Review of Economics and Statistics

RFS

Revue Française de Sociologie

RIBF

Research in International Business and Finance

RSR

Repeat Sales Method

SEJ

Southern Economic Journal

SER

Socio-Economic Review

SJAE

Spanish Journal of Agricultural Economics

SJAR

Spanish Journal of Agricultural Research

VDQS

Vineyard Data Quantification Society

WP

Working Paper

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