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On the Constancy of Hedonic Wine Price Coefficients over Time

Published online by Cambridge University Press:  30 October 2019

Benoît Faye  and
Eric Le Fur
Benoît Faye*
Affiliation:
INSEEC School of Business and Economics, Hangar 19 Quai de Paludate, CS 60083, 33070 Bordeaux Cedex, France, and LAREFI, University of Bordeaux
Eric Le Fur
Affiliation:
INSEEC School of Business and Economics, Hangar 19 Quai de Paludate, CS 60083, 33070 Bordeaux Cedex, France, and LAREFI, University of Bordeaux; e-mail: [email protected].
*
e-mail: [email protected] (corresponding author).
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Abstract

This article tests the stability of the main hedonic wine price coefficients over time. We draw on an extensive literature review to identify the most frequently used methodology and define a standard hedonic model. We estimate this model on monthly subsamples of a worldwide auction database of the most commonly exchanged fine wines. This provides, for each attribute, a monthly time series of hedonic coefficients time series data from 2003 to 2014. Using a multivariate autoregressive model, we then study the stability of these coefficients over time and test the existence of structural or cyclical changes related to fluctuations in general price levels. We find that most hedonic coefficients are variable and either exhibit structural or cyclical variations over time. These findings shed doubt on the relevance of both short- and long-run hedonic estimations. (JEL Classifications: C13, C22, D44, G11)

Keywords

auction pricehedonic functionMARwine price
Type
Articles
Information
Journal of Wine Economics , Volume 14 , Issue 2 , May 2019 , pp. 182 - 207
Copyright
Copyright © American Association of Wine Economists 2019 

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Footnotes

The authors thank the participants of the various Bordeaux Wine Economics workshops and an anonymous reviewer for many helpful comments. We are indebted to the editor, Karl Storchmann, for various suggestions that have improved this paper.

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