This article analyzes the contractual relationship between a wine cooperative (winery) and its member (growers). This relationship is plagued by moral hazard and adverse selection problems in grape quality. Indeed, growers can be opportunistic since the cooperative is unable to observe: (1) their effort level due to imperfect monitoring technology; and (2) their productive abilities (types) due to adverse selection. Because the growers' vineyard practices and efforts are one of the main determinants of grape quality, the cooperative implements an incentive compensation system to induce growers to make the maximum effort toward the achievement of quality. This compensation scheme is similar to that in tournaments (Green and Stokey, 1983; Knoeber, 1989; Lazear and Rosen, 1981; Prendergast, 1999). In our case, the cooperative promotes competition between growers by offering a promotion to a higher-quality contract, while, at the same time, organizing the contest by creating homogeneous groups of growers using a menu of contracts and monitoring through regular visits to the vineyard. Using a database of 1,219 contracts, we test the effect of: (1) the cooperative's tournament compensation scheme; (2) the menu of contracts and monitoring mechanism. The results of our econometric estimations provide some confirmation of both effects. (JEL classifications: L14, D82, Q13)

This article examines the determinants of chemical consumption by French winegrowers on an individual basis. We introduce criteria relating to the structure of vineyards and the financial situation of the winegrowers. Using data from the Farm Accountancy Data Network (FADN-RICA) for the period 2002–2007 from an annual sample of 607 winegrowers, we study the different factors that encourage winegrowers to use chemical inputs to protect or increase the yield of their vines. Drawing on transversal and longitudinal analyses, we illustrate the benefits derived from differentiating the demand for inputs according to their classification: pesticides or fertilizers. Climatic variables, physical size, and turnover all act as driving forces in the decision to use chemical inputs. We show that taking out crop insurance functions as a substitute for inputs and observe a double moral hazard effect: Winegrowers who increase their insurance coverage reduce their consumption of inputs the most and receive greater compensation; among insured winegrowers, those who use the most inputs make the most claims. As wine grape growing is a consistent activity conducted over a long period, we observe permanence in patterns of use of chemical inputs. (JEL Classifications: Q12, Q13, Q14)

The emergence of grape wine as a mainstream alcoholic beverage in China is relatively new. However, rapidly increasing wine consumption in China provides a significant trade potential for the United States and other wine exporting countries. This paper investigates the Chinese wine market using retailer data with a focus on imported wines. Supermarkets are identified as major retail outlets for foreign wines, and this paper uses data from a recent supermarket wine survey in China. Our data indicate that about half of our sample stock foreign wines. On average, 21 percent of total wine shelf space is allocated to foreign wines and larger stores are associated with larger shares of shelf space for foreign wines. Among foreign wines, French wine dominates. Of 31 supermarkets that sell foreign wines, 26 stores carry French wine, and in all but two of these stores more than half of the foreign wine shelf space is devoted to French wine. Australia, Chile, Italy and the United States follow in terms of number of stores carrying wines. Supermarkets in our sample allocate most of their shelf space to red wine for both domestic (93%) and foreign (82%) wines. The average median price for foreign wines (94 yuans per bottle) was more than double the equivalent price for domestic wines (42 yuans). (JEL Classification: N55, Q13, Q19)

We exploit the duality between the cost function and the directional distance function in value space to recover hedonic prices of product or asset characteristics. An application is offered for 96 Oregon vineyards located in the Willamette Valley of Oregon that sold between 1995 and 2007. Specifically, we recover hedonic prices for the number of high-, medium-, and low-quality vineyard acres and the number of nonvineyard acres sold in the parcel. Not surprisingly, higher-quality vineyard acres have a higher estimated hedonic price than medium- or low-quality acres, but as the number of high-quality acres increases, the hedonic price falls. (JEL Classification: D24, C61, Q10)

We analyzed data from Oxford University Blind Tasting Society's 2018 training season to assess whether blind tasting training improves accuracy. Over time, guesses for grape variety increased in terms of accuracy as well as within-group agreement. Moreover, for grape variety, location, and vintage, the chances of the most common within-group guess being correct were significantly higher than the underlying frequency distribution. Finally, we observed a shift in preference towards older wines, with those with little initial experience gaining a preference for greater acidity and alcohol, and decreasing their preference for oak. Our results have important implications for growing wine markets with an increasingly educated consumer population. (JEL Classifications: C91, C92, D83, L15, L66).

Little attention has been paid to the effects of personality traits on the consumption of wine and beer. We used a survey to investigate the associations between personality traits and the differences in expected consumption frequencies of wine and beer for 3,482 Norwegian respondents. High scores on extraversion and openness to experiences increased the expected frequency of wine consumption, high score on agreeableness reduced the frequency of wine consumption, while scores on conscientiousness and neuroticism had no effects. For beer, there were no significant effects between personality traits and the frequency of consumption. (JEL Classification: D12, Q13).

Analyses are made of two wine tastings, one of red and one of white wines, to compare French and American styles. It is concluded that there are differences between the wines and, in the case of the reds, national differences. It is shown that even skilled tasters can often be out by as much as 3 when judging on a scale from 0 to 20. For the statistician, Bayes factors are contrasted with F-values. (JEL classification: C11)

I use a computational linguistic algorithm to measure the topics covered in textual descriptions of wine. I ask whether there is information in the text that consumers value. Wine is a prominent example of an experience good. There is substantial product differentiation in the market, and consumers only have limited information on the utility they will receive when consumed. Thus, information is expected to be valuable. Evaluating descriptions of wine produced across the United States, I use a hedonic price regression to explore whether the descriptions provide any new information not already available to the consumer. Initial results suggest that text descriptions are shown to lose their explanatory value when varietal and numerical ratings are included as controls. I then show that once the varietal, region, and numerical ratings are adequately controlled for, there is information in the descriptions that consumers value. (JEL Classifications: C81, D83, L15)

In this article, we use attendance data from La Cité du Vin, a wine museum in the city of Bordeaux, to assess the impact of the recent wave of terror that affected France on wine tourism. We use recent count regression estimation techniques suited for time series data to build a prediction model of the demand for attendance at this museum. We conclude that the institution lost about 5,000 visitors over 426 days, during which 14 successive terrorist attacks took place. This corresponds to almost 1% of the total number of visitors in the sample period. (JEL Classifications: L83, Z30)

This article examines whether there are different hedonic price models for different German wines by grape variety, and identifies influential factors that focus on weather variables and direct and indirect quality measures for wine prices. A log linear regression model is first applied only for Riesling, and then machine learning is used to find hedonic price models for Riesling, Silvaner, Pinot Blanc, and Pinot Noir. Machine learning exhibits slightly greater explanatory power, suggests adding additional variables, and allows for a more detailed interpretation of results. Gault&Millau points are shown to have a significant positive impact on German wine prices. The log linear approach suggests a huge effect of different quality categories on the wine prices for Riesling with the highest price premiums for Auslese and “Beerenauslese/Trockenbeerenauslese/Eiswein (Batbaice),” while the machine learning model shows, that additionally the alcohol level has a positive effect on wines in the quality categories “QbA,” “Kabinett,” and “Spätlese,” and a mostly negative one in the categories “Auslese” and “Batbaice.” Weather variables exert different affects per grape variety, but all grape varieties have problems coping with rising maximum temperatures in the winter and with rising minimum and maximum temperatures in the harvest season. (JEL Classifications: C45, L11, Q11)

This study investigates a hypothesized positive relationship between the number and strength of network ties and the performance of wineries in emerging production regions, which may face different challenges than wineries found in well-established regions. Results corroborate expectations that greater ties to competitors and firms in related tourism food and lodging sectors bolster performance. (JEL Classification: Q130)

Holmes and Anderson (2017a) introduce two extensive data sets on world alcohol consumption and expenditure and with them investigate, among other things, the possible convergence of national alcohol consumption patterns using wine, beer, and spirit shares. Such share data define a composition, on which conventional statistical analysis using covariances and correlations is invalid. This note reanalyses the data using techniques appropriate for a composition and introduces a statistic that can validly track the variation in national shares around the global mean through time. This variability statistic shows that such convergence of national alcohol patterns has clearly taken place over the period 1961 to 2014 and thus confirms Holmes and Anderson's findings using a valid statistical approach. (JEL Classifications: C18, D12, L66)

Bottles of water vary in price with some priced as if they were bottles of fine wine. This article attempts to explain price differences between over 100 bottled waters included in a guidebook to fine waters by drawing on the hedonic pricing approach, which has been used to try to explain price differences among bottles of wine. As part of that approach, the price of each bottled water is regressed against various characteristics, including those related to its water. Water-related characteristics explain only a small part of the price differences among the bottled waters. Thus, to a large extent, the premium that consumers pay for a more expensive bottled water does not seem to be a premium for its water. (JEL Classifications: C21, Q25)

The U.S. Beer industry has undergone two periods of major structural change in the post-World War II period. The first period, 1950–1980, was one of consolidation in which concentration increased dramatically. Since this period, combinations among leading brewers took place that would not have passed antitrust scrutiny earlier. The second period, from 1980 on, is one of fragmentation, marked by the entry of many craft brewers and increased product heterogeneity. The fragmentation has brought about consumption complementarities between wine and beer that never existed before. The wine and beer industry both face distributional inefficiencies sustained by state regulatory provisions that were a consequence of ending prohibition in the United States. Each of these topics is explored in this paper. (JEL Classification: L66, M37)

Recent research in psychology and sociology has established a connection between political beliefs and unhealthy behaviors such as excessive alcohol, tobacco, and illegal drug consumption. In this study, we estimate the relationship between political ideology and the demand for beer, wine, and spirits using a longitudinal panel of fifty U.S. states from 1952 to 2010. Controlling for various socioeconomic factors and unobserved heterogeneity, we find that when a state becomes more liberal politically, its consumption of beer and spirits rises, while its consumption of wine may fall. Our findings suggest that political beliefs are correlated with the demand for alcohol. (JEL Classifications: D3, D12, I1)

This article is the first of its kind to estimate econometrically the supply elasticity of California wine grapes. Wine grapes constitute the single largest crop in the state of California in terms of total receipts. Allowing for the dynamic adjustments of quasi-fixed inputs, we estimate simultaneous systems of equations for California's four major wine grape growing regions and eight of the most widely grown varieties. We find that California wine grape production is, on the whole, inelastic with respect to prices received. The variety showing the most price responsiveness is Chardonnay. There appears to be no significant difference in price responsiveness between the coastal and inland growing regions, or between red and white grape varieties. (JEL Classification: Qll, Q13, R14)

This research examines long-run changes in alcohol consumption patterns for the United States, at the state level, and presents forecasts for per capita consumption of beer, wine, and spirits developed using the ARIMA methodology. The evidence is then presented on the extent of convergence in consumption through time. This evidence shows that from the 1970s through the early 2000s, a pattern of convergence in both the level of consumption and the consumption mix was evident, but since the early 2000s, and unlike the pattern observed globally, there has been a reversal of this trend. The changes in consumption through time are illustrated via ternary plots. Bayesian estimation methods are used to formally describe changes in historical consumption patterns and to investigate the impact of policy settings on consumption forecasts. There were no systematic correlations found between alcohol policy settings and forecast future consumption changes, or tax rate levels and forecast consumption changes. (JEL Classifications: D12, I18, L66)

En primeur sales of Bordeaux grands crus occur every spring on the Bordeaux marketplace and represent the main source of supply for wine merchants. We address two specific issues related to the en primeur strategy. First, we study whether en primeur prices are good estimates of wines' qualities, as well as how they may reveal any relevant information to uninformed buyers. Second, we consider which roles en primeur sales may play between traders, given the market informational and competitive structures. (JEL classification: D42, D82, L15.)

The market structure and recipes for beer has been rapidly changing with craft beers attracting more consumers. Perceived hops quality (hoppiness) is one of the main attributes that microbrewers alter to differentiate their products to satisfy consumers’ changing tastes and preferences. We hypothesize that, in addition to manipulating beer-processing conditions, the conditions under which the hops are grown may also influence the final sensory properties of the beer. Using hops from a field experiment coupled with sensory attributes and sociodemographic characteristics from a contingent valuation survey, we analyzed the impact of under-fertilized hop treatments during the growing season on consumers’ willingness to pay for beer. The results indicate that uninformed consumers in a blind tasting could identify the differences in beer made from hops across the fertilization treatments and, thus, implying that all else equal sufficient fertilizer is required to achieve satisfactory hoppiness for which consumers are willing to pay. (JEL Classifications: C91, D12, L66, Q11)