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Modeling Grape Price Dynamics in Mendoza: Lessons for Policymakers

Published online by Cambridge University Press:  30 October 2019

German Puga ,
James Fogarty ,
Atakelty Hailu  and
Alejandro Gennari
German Puga
Affiliation:
Agricultural and Resource Economics, School of Agriculture and Environment, University of Western Australia, 35 Stirling Highway, Crawley WA6009, Australia; e-mail: [email protected].
James Fogarty*
Affiliation:
Agricultural and Resource Economics, School of Agriculture and Environment, University of Western Australia, 35 Stirling Highway, Crawley WA6009, Australia
Atakelty Hailu
Affiliation:
Agricultural and Resource Economics, School of Agriculture and Environment, University of Western Australia, 35 Stirling Highway, Crawley WA6009, Australia; e-mail: [email protected].
Alejandro Gennari
Affiliation:
National University of Cuyo, Department of Economics, Policy and Rural Administration, Provincia de Mendoza, Argentina; e-mail: [email protected].
*
e-mail: [email protected] (corresponding author).
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Abstract

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 kilogram 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. (JEL Classifications: Q12, Q13, Q18)

Keywords

autoregressive distributed laggrape pricehedonic priceMendoza
Type
Articles
Information
Journal of Wine Economics , Volume 14 , Issue 4 , November 2019 , pp. 343 - 355
Copyright
Copyright © American Association of Wine Economists 2019

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Footnotes

The authors thank an anonymous referee and the editorial team at JWE (especially Karl Storchmann) for their comments and assistance in progressing this paper to its final version.

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