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The return to Australian fine wine

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  • James Joseph Fogarty

Abstract

This paper uses auction data and the adjacent period hedonic price regression approach to estimate the return to storing premium Australian wine during the period 1989Q4 to 2000Q4. The results indicate that the return to storing premium Australian wine is probably superior to the return to Bordeaux wine. The risk-return profile of premium Australian wine is shown to be broadly comparable to that of Australian equities. Copyright 2006, Oxford University Press.

Suggested Citation

  • James Joseph Fogarty, 2006. "The return to Australian fine wine," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(4), pages 542-561, December.
    • Handle: RePEc:oup:erevae:v:33:y:2006:i:4:p:542-561
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    Citations

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    Cited by:

    1. Onur, Ilke & Bruwer, Johan & Lockshin, Larry, 2020. "Reducing information asymmetry in the auctioning of non-perishable experience goods: The case of online wine auctions," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    2. Eric Fur, 2023. "Risk and return of classic car market prices: passion or financial investment?," Journal of Asset Management, Palgrave Macmillan, vol. 24(1), pages 59-68, February.
    3. Lucia BALDI & Massimo PERI & Daniela VANDONE, 2010. "Is wine a financial parachute?," Departmental Working Papers 2010-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    4. Bocart, Fabian & Hafner, Christian, 2012. "Volatility of price indices for heterogeneous goods," LIDAM Discussion Papers ISBA 2012019, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    5. Masset, Philippe & Weisskopf, Jean-Philippe & Cardebat, Jean-Marie & Faye, Benoît & Le Fur, Eric, 2021. "Analyzing the risks of an illiquid and global asset: The case of fine wine," The Quarterly Review of Economics and Finance, Elsevier, vol. 82(C), pages 1-25.
    6. Masset, Philippe & Weisskopf, Jean-Philippe & Faye, Benoît & Le Fur, Eric, 2016. "Red obsession: The ascent of fine wine in China," Emerging Markets Review, Elsevier, vol. 29(C), pages 200-225.
    7. Ormos, Mihály & Erdős, Péter, 2011. "Borok mint alternatív befektetési lehetőségek [Wines as an alternative investment]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 158-172.
    8. B. Faye & E. Le Fur & S. Prat, 2015. "Dynamics of fine wine and asset prices: evidence from short- and long-run co-movements," Applied Economics, Taylor & Francis Journals, vol. 47(29), pages 3059-3077, June.
    9. James J. Fogarty & Callum Jones, 2011. "Return To Wine: A Comparison Of The Hedonic, Repeat Sales And Hybrid Approaches," Australian Economic Papers, Wiley Blackwell, vol. 50(4), pages 147-156, December.
    10. Fogarty, James Joseph & Sadler, Rohan, 2012. "To Save or Savour: A Review of Wine Investment," Working Papers 139663, University of Western Australia, School of Agricultural and Resource Economics.
    11. Bargain, Olivier & Cardebat, Jean-Marie & Vignolles, Alexandra, 2016. "Crowdfunding in Wine," Working Papers 234638, American Association of Wine Economists.
    12. Caracciolo, Francesco & D’Amico, Mario & Di Vita, Giuseppe & Pomarici, Eugenio & Dal Bianco, Andrea & Cembalo, Luigi, 2016. "Private vs. Collective Wine Reputation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(3), pages 1-20, August.
    13. Samitas, Aristeidis & Papathanasiou, Spyros & Koutsokostas, Drosos & Kampouris, Elias, 2022. "Volatility spillovers between fine wine and major global markets during COVID-19: A portfolio hedging strategy for investors," International Review of Economics & Finance, Elsevier, vol. 78(C), pages 629-642.
    14. Eric Le Fur & Jean-François Outreville, 2019. "Fine wine returns: a review of the literature," Journal of Asset Management, Palgrave Macmillan, vol. 20(3), pages 196-214, May.
    15. Algieri, Bernardina & Iania, Leonardo & Leccadito, Arturo & Meloni, Giulia, 2023. "Message in a Bottle: Forecasting wine prices," LIDAM Discussion Papers LFIN 2023004, Université catholique de Louvain, Louvain Finance (LFIN).
    16. Rachel A. Smith & C. Nicholas McKinney & Steven B. Caudill & Franklin G. Mixon, 2016. "Consumer ratings and the pricing of experience goods: hedonic regression analysis of beer prices," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-10, December.
    17. Cardebat, Jean-Marie & Jiao, Linda, 2018. "The long-term financial drivers of fine wine prices: The role of emerging markets," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 347-361.
    18. Masset, Philippe & Weisskopf, Jean-Philippe, 2018. "Wine indices in practice: Nicely labeled but slightly corked," Economic Modelling, Elsevier, vol. 68(C), pages 555-569.
    19. Fogarty, James Joseph, 2007. "Rethinking Wine Investment in the UK and Australia," Working Papers 37312, American Association of Wine Economists.
    20. Aytaç, Beysül & Hoang, Thi-Hong-Van & Mandou, Cyrille, 2016. "Wine: To drink or invest in? A study of wine as an investment asset in French portfolios," Research in International Business and Finance, Elsevier, vol. 36(C), pages 591-614.
    21. Correia, Leonida & Rebelo, João & Caldas, José, 2015. "Production and Trade of Port Wine: Temporal Dynamics and Pricing," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 16(1), pages 1-15.
    22. Fur, Eric Le, 2021. "Fine Wines in a Diversified Portfolio of Collectibles," 2021 Conference, August 17-31, 2021, Virtual 315852, International Association of Agricultural Economists.
    23. James Fogarty & Giri Parameswaran, 2017. "Alcohol Sin Taxes," Working Papers 257211, University of Western Australia, School of Agricultural and Resource Economics.

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