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Wine Economics*

Published online by Cambridge University Press:  31 July 2012

Karl Storchmann
Karl Storchmann
Affiliation:
Economics Department, New York University, 19 West Fourth Street, New York, NY 10012. email: [email protected].
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Abstract

Fine wine has a few characteristics that differentiate it from other agricultural commodities and beverages, rendering it an interesting topic for economists. Fine wine can regularly fetch bottle prices that exceed several thousand dollars. It can be stored a long time and can increase in value with age. Fine-wine quality and prices are extraordinarily sensitive to fluctuations in the weather the year in which the grapes were grown. Wine is an experience good, that is, its quality cannot be ascertained before consumption. As a result, consumers often rely on “expert opinion” regarding quality and maturation prospects. This article describes the emergence and the unparalleled rise of wine economics from the 1980s to the present and sheds light on its three main topics: finance, climate change, and the role of expert opinion. (JEL Classification: Q1, G11, Q54, L15)

Type
Research Article
Information
Journal of Wine Economics , Volume 7 , Issue 1 , May 2012 , pp. 1 - 33
Copyright
Copyright © American Association of Wine Economists 2012

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