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The impact of gurus : Parker grades and en primeur wine prices

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  • Héla Hadj Ali
  • Sébastien Lecocq
  • Michael Visser

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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 ch^ateau 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 find 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 Laboratoire d'Economie Appliquee, INRA in its series Research Unit Working Papers with number 0507.

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Length: 25 pages
Date of creation: Sep 2005
Date of revision:
Handle: RePEc:lea:leawpi:0507

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Keywords: expert opinion; natural experiment; treatment effect; Bordeaux wine price;

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References

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  4. 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.
  5. 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.
  6. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 1-19.
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  8. Victor Ginsburgh & A. Monzak & M. Monzak, 2013. "Red wines of Medoc: What is wine tasting worth?," ULB Institutional Repository 2013/152435, ULB -- Universite Libre de Bruxelles.
  9. 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).
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  13. 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. Nicolas Gérard Vaillant & François-Charles Wolff, 2010. "Understanding how experts rate cigars: A “havanometric” analysis," Working Papers hal-00547705, HAL.
  2. 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.
  3. Giovanni Mastrobuoni & Franco Peracchi & Aleksey Tetenov, 2012. "Price as a signal of product quality: some experimental evidence," Carlo Alberto Notebooks 268, Collegio Carlo Alberto, revised 2013.
  4. Antonis Michis & Anna Markidou, 2013. "Determinants of retail wine prices: evidence from Cyprus," Empirical Economics, Springer, vol. 45(1), pages 267-280, August.
  5. 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.
  6. 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.
  7. Dubois, P. & Nauges, C., 2006. "Identifying the effect of unobserved quality and experts' reviews in the pricing of experience goods : empirical application on Bordeaux wine," Economics Working Paper Archive (Toulouse) 200607, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
  8. Nicolas Gérard Vaillant & François-charles Wolff, 2012. "Do consumers learn from tasting scores set by experts?," Economics Bulletin, AccessEcon, vol. 32(2), pages 1378-1384.
  9. 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.
  10. 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.
  11. 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.

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