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The Impact of Gurus: Parker Grades and EN PRIMEUR Wine Prices

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  • Ali, Hela Hadj
  • Lecocq, Sebastien
  • Visser, Michael

Abstract

The purpose of this paper is to measure the impact of Robert Parker's oenological grades on Bordeaux wine prices. We study their impact on the so-called en primeur wine prices, i.e., the prices determined by the chateau owners when the wines are still extremely young. The Parker grades are usually published in the spring of each year, before the wine prices are established. However, the wine grades attributed in 2003 have been published much later, in the autumn, after the determination of the prices. This unusual reversal is exploited to estimate a Parker effect. We found that, on average, the effect is equal to 2.80 euros per bottle of wine. We also estimate grade-specific effects, and use these estimates to predict what the prices would have been had Parker attended the spring tasting in 2003.

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Bibliographic Info

Paper provided by American Association of Wine Economists in its series Working Papers with number 37292.

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Date of creation: Apr 2007
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Handle: RePEc:ags:aawewp:37292

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Web page: http://www.wine-economics.org
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Keywords: wine pricing; expert rating; Demand and Price Analysis;

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References

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  4. Dubois, Pierre & Nauges, Celine, 2007. "Identifying the Effect of Unobserved Quality and Expert Reviews in the Pricing of Experience Goods: Empirical Application on Bordeaux Wine," Working Papers 37320, American Association of Wine Economists.
  5. Victor Ginsburgh, 2003. "Awards, success and aesthetic quality in the arts," ULB Institutional Repository 2013/1679, ULB -- Universite Libre de Bruxelles.
  6. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
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  8. Luc BAUWENS & Victor GINSBURGH, 2000. "Art experts and auctions Are pre-sale estimates unbiased and fully informative?," Discussion Papers (REL - Recherches Economiques de Louvain) 2000022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  9. Héla Hadj Ali & Céline Nauges, 2007. "The Pricing of Experience Goods: The Example of en primeur Wine," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 91-103.
  10. James J. Heckman & Lance Lochner & Christopher Taber, 1998. "General Equilibrium Treatment Effects: A Study of Tuition Policy," NBER Working Papers 6426, National Bureau of Economic Research, Inc.
  11. Shleifer, Andrei, 1986. " Do Demand Curves for Stocks Slope Down?," Journal of Finance, American Finance Association, vol. 41(3), pages 579-90, July.
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  14. Véronique Chossat & Olivier Gergaud, 2003. "Expert Opinion and Gastronomy: The Recipe for Success," Journal of Cultural Economics, Springer, vol. 27(2), pages 127-141, May.
  15. Combris, Pierre & Lecocq, Sebastien & Visser, Michael, 1997. "Estimation for a Hedonic Price Equation for Bordeaux Wine: Does Quality Matter?," Economic Journal, Royal Economic Society, vol. 107(441), pages 390-402, March.
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Citations

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Cited by:
  1. Claudio Kugler, 2010. "Parker, Wine Spectator and Retail Prices of Bordeaux Wines in Switzerland: Results from Panel Data 1995 - 2000," Working papers 2010/09, Faculty of Business and Economics - University of Basel.
  2. Antonis Michis & Anna Markidou, 2013. "Determinants of retail wine prices: evidence from Cyprus," Empirical Economics, Springer, vol. 45(1), pages 267-280, August.
  3. Dubois, Pierre & Nauges, Céline, 2010. "Identifying the effect of unobserved quality and expert reviews in the pricing of experience goods: Empirical application on Bordeaux wine," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 205-212, May.
  4. Goldstein, Robin & Almenberg, Johan & Dreber, Anna & Emerson, John W. & Herschkowitsch, Alexis & Katz, Jacob, 2008. "Do More Expensive Wines Taste Better? Evidence From A Large Sample Of Blind Tastings," Working Papers 37328, American Association of Wine Economists.
  5. Giovanni Mastrobuoni & Franco Peracchi & Aleksey Tetenov, 2012. "Price as a signal of product quality: Some experimental evidence," EIEF Working Papers Series 1214, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2012.
  6. Nicolas Gérard Vaillant & François-Charles Wolff, 2012. "Do consumers learn from tasting scores set by experts?," Working Papers hal-00695723, HAL.
  7. Michela Ponzo & Vincenzo Scoppa, 2013. "Experts’ Awards and Economic Success: Evidence from an Italian Literary Prize," CSEF Working Papers 335, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  8. Nicolas Gérard Vaillant & Fran�ois-Charles Wolff, 2013. "Understanding how experts rate cigars: a ‘havanometric’ analysis," Applied Economics, Taylor & Francis Journals, vol. 45(1), pages 99-109, January.
  9. Rössel, Jörg & Beckert, Jens, 2012. "Quality classifications in competition: Price formation in the German wine market," MPIfG Discussion Paper 12/3, Max Planck Institute for the Study of Societies.
  10. Corsi, Alessandro & Strøm, Steinar, 2013. "The Price Premium for Organic Wines: Estimating a Hedonic Farm-gate Price Equation," Memorandum 07/2013, Oslo University, Department of Economics.
  11. Negro, Giacomo & Hannan, Michael T. & Fassiotto, Magali A., 2012. "Category Signaling: Biodynamic and Organic Winemaking in Alsace," Research Papers 2101, Stanford University, Graduate School of Business.

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