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Parker, Wine Spectator and Retail Prices of Bordeaux Wines in Switzerland: Results from Panel Data 1995 - 2000

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  • Kugler, Peter

    (University of Basel)

  • Kugler, Claudio

Abstract

This paper considers the effect of Parker and Wine Spectator ratings on Swiss retail prices of the grand cru classé of Médoc , Graves and St Emilion as well as the most renowned wines of Pomerol in a panel data setting. The application of a two-way fixed effects regression model to data of the vintages 1995 to 2000 of 121 wines leads to the following conclusions: There is clear evidence that WS ratings do not provide additional information for retail prices when we take into account the fixed effects and the Parker ratings. The evidence of a marginal effect of Parker ratings on Bordeaux prices is mixed. We find it for five of the nine appellations, in particular for Paulliac and Pomerol where a one Parker point increase is estimated to lead to a 6-7% price increase. This "only" partial price influence of Parker is confirmed by comparing the estimated "chateau" fixed effects for the Médoc estates with their standing in the "old" 1855 classification and the most recent Parker classification of 2008.

Suggested Citation

  • Kugler, Peter & Kugler, Claudio, 2010. "Parker, Wine Spectator and Retail Prices of Bordeaux Wines in Switzerland: Results from Panel Data 1995 - 2000," Working papers 2010/10, Faculty of Business and Economics - University of Basel.
    • Handle: RePEc:bsl:wpaper:2010/10
    as

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    References listed on IDEAS

    as
    1. 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.
    2. Ali, Héla Hadj & Lecocq, Sébastien & Visser, Michael, 2010. "The Impact of Gurus: Parker Grades and en primeur Wine Prices," Journal of Wine Economics, Cambridge University Press, vol. 5(1), pages 22-39, April.
    3. Jones, Gregory V. & Storchmann, Karl-Heinz, 2001. "Wine market prices and investment under uncertainty: an econometric model for Bordeaux Crus Classes," Agricultural Economics, Blackwell, vol. 26(2), pages 115-133, November.
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    Cited by:

    1. GINSBURGH, Victor & MONZAK, M., 1992. "Red wines of Médoc: What is wine testing worth ?," LIDAM Discussion Papers CORE 1992027, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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    More about this item

    Keywords

    Parker and Wine Spectator ratings; Bordeaux retail prices; two-way fixed effects model;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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