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Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings

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Author Info

  • Goldstein, Robin

    ()
    (Fearless Critic Media)

  • Almenberg, Johan

    ()
    (Dept. of Economics, Stockholm School of Economics)

  • Dreber, Anna

    ()
    (Dept. of Economics, Stockholm School of Economics)

  • Emerson, John W.

    ()
    (Yale University)

  • Herschkowitsch, Alexis

    ()
    (Fearless Critic Media)

  • Katz, Jacob

    ()
    (Fearless Critic Media)

Abstract

Individuals who are unaware of the price do not derive more enjoyment from more expensive wine. In a sample of more than 6,000 blind tastings, we find that the correlation between price and overall rating is small and negative, suggesting that individuals on average enjoy more expensive wines slightly less. For individuals with wine training, however, we find indications of a positive, or at any rate non-negative, correlation. Our results are robust to the inclusion of individual fixed effects, and are not driven by outliers: when omitting the top and bottom deciles of the price distribution, our qualitative results are strengthened, and the statistical significance is improved even further. Our results indicate that both the prices of wines and wine recommendations by experts may be poor guides for non-expert wine consumers.

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Bibliographic Info

Paper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 700.

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Length: 11 pages
Date of creation: 16 Apr 2008
Date of revision: 24 Apr 2008
Publication status: Published in Journal of Wine Economics, 2008, pages 1-9.
Handle: RePEc:hhs:hastef:0700

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Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
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Web page: http://www.hhs.se/
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Keywords: Wine; price/quality relation; expertise;

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References

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  1. Oczkowski, Edward A., 1994. "A Hedonic Price Function For Australian Premium Table Wine," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 38(01), April.
  2. HélaHadj Ali & Sébastien Lecocq & Michael Visser, 2008. "The Impact of Gurus: Parker Grades and "En Primeur" Wine Prices," Economic Journal, Royal Economic Society, vol. 118(529), pages F158-F173, 06.
  3. Gerard J. Tellis & Birger Wernerfelt, 1987. "Competitive Price and Quality Under Asymmetric Information," Marketing Science, INFORMS, vol. 6(3), pages 240-253.
  4. G¸nter Schamel & Kym Anderson, 2003. "Wine Quality and Varietal, Regional and Winery Reputations: Hedonic Prices for Australia and New Zealand," The Economic Record, The Economic Society of Australia, vol. 79(246), pages 357-369, 09.
  5. Landon, Stuart & Smith, Constance, 1997. "The Use of Quality and Reputation Indicators by Consumers: The Case of Bordeaux Wine," MPRA Paper 9283, University Library of Munich, Germany.
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Citations

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Cited by:
  1. Almenberg, Johan & Dreber, Anna, 2009. "When Does the Price Affect the Taste? Results from a Wine Experiment," Working Paper Series in Economics and Finance 717, Stockholm School of Economics, revised 20 Apr 2009.
  2. Friberg, Richard & Paterson, Robert W & Richardson, Andrew D, 2010. "Why is there a home bias? A case study of Wine," CEPR Discussion Papers 7885, C.E.P.R. Discussion Papers.
  3. Robin Cross & Andrew J. Plantinga & Robert N. Stavins, 2011. "What Is the Value of Terroir?," American Economic Review, American Economic Association, vol. 101(3), pages 152-56, May.
  4. Cross, Robin & Plantinga, Andrew J. & Stavins, Robert N., 2011. "The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices," Discussion Papers dp-11-06, Resources For the Future.
  5. Zander, Katrin & Janssen, Meike, 2012. "Präferenzen Deutscher Öko-Konsumenten Für Wein," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137175, German Association of Agricultural Economists (GEWISOLA).
  6. Maya Bar-Hillel & Alon Maharshak & Avital Moshinsky & Ruth Nofech, 2010. "Does a Rose by any other Name Smell as Sweet? A Cognitive Perspective on Poets and Poetry," Discussion Paper Series dp549, The Center for the Study of Rationality, Hebrew University, Jerusalem.
  7. Maya Bar-Hillel & Alon Maharshak & Avital Moshinsky & Ruth Nofech, 2012. "A rose by any other name: A social-cognitive perspective on poets and poetry," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 7(2), pages 149-164, March.

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