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The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices

In: Economics of Environment, Climate Change, and Wine Selected Papers of Robert N Stavins Volume 3 (2011–2023)

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  • Robin Cross
  • Andrew J. Plantinga
  • Robert N. Stavins

Abstract

Wine producers and enthusiasts use the term “terroir,” from the French terre (meaning land), to refer to the special characteristics of a place that impart unique qualities to the wine produced. The Appellation d’Origine Contrôlée (AOC) system in France, and similar systems adopted in other major wine-producing countries, are based upon the geographic location of grape production, and are therefore predicated on this notion of terroir. Under a parallel U.S. system, production regions are designated as American Viticultural Areas (AVAs), with finer geographical designations known as sub-AVAs. Such designations allow wineries to identify the geographical origin of the grapes used in producing their wines, and — equally important — seek to prevent producers outside the AVA from making false claims about the nature and origin of their wines…

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  • Robin Cross & Andrew J. Plantinga & Robert N. Stavins, 2025. "The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices," World Scientific Book Chapters, in: Economics of Environment, Climate Change, and Wine Selected Papers of Robert N Stavins Volume 3 (2011–2023), chapter 26, pages 689-704, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811292415_0026
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    1. 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 152-156, May.
    2. Gergaud, Olivier & Ginsburgh, Victor, 2010. "Natural Endowments, Production Technologies and the Quality of Wines in Bordeaux. Does Terroir Matter?," Journal of Wine Economics, Cambridge University Press, vol. 5(1), pages 3-21, April.
    3. Orley Ashenfelter & Karl Storchmann, 2010. "Using Hedonic Models of Solar Radiation and Weather to Assess the Economic Effect of Climate Change: The Case of Mosel Valley Vineyards," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 333-349, 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," Journal of Wine Economics, Cambridge University Press, vol. 3(1), pages 1-9, April.
    5. Veale, Roberta & Quester, Pascale, 2008. "Consumer Sensory Evaluations of Wine Quality: The Respective Influence of Price and Country of Origin," Journal of Wine Economics, Cambridge University Press, vol. 3(1), pages 10-29, April.
    6. Gergaud, Olivier & Ginsburgh, Victor, 2010. "Natural Endowments, Production Technologies and the Quality of Wines in Bordeaux. Does Terroir Matter?," Journal of Wine Economics, Cambridge University Press, vol. 5(01), pages 3-21, March.
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    Cited by:

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    2. David Moroz, 2024. "What does terroir mean? A science mapping of a multidimensional concept," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(3), pages 889-913, September.
    3. Gokcekus, Omer & Finnegan, Clare M., 2014. "Classification and Re-Classification: Oregon’s Willamette Valley AVA and its New Sub-AVAs," Working Papers 164642, American Association of Wine Economists.
    4. Ginsburgh, Victor & Monzak, Muriel & Monzak, Andras, 2013. "Red Wines of Médoc: What is Wine Tasting Worth?," Journal of Wine Economics, Cambridge University Press, vol. 8(2), pages 159-188, November.
    5. Fedoseeva, Svetlana, 2020. "(Dynamic) willingness to pay and e-commerce: Insights from sparkling wine sector in Russia," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    6. Pecchioli, Bruno & Moroz, David, 2023. "Do geographical appellations provide useful quality signals? The case of Scotch single malt whiskies," Economic Modelling, Elsevier, vol. 124(C).
    7. Robert N. Stavins, 2017. "The Evolution Of Environmental Economics: A View From The Inside," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(02), pages 251-274, June.
    8. Kym Anderson, 2019. "Is Georgia the Next “New” Wine-Exporting Country?," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 13, pages 311-345, World Scientific Publishing Co. Pte. Ltd..
    9. Dachary-Bernard, Jeanne & Rambonilaza, Tina & Lemarié-Boutry, Marie, 2014. "The response of land markets to flood protection and flood experience: a hedonic price modeling on the Gironde estuary (France)," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 169761, Agricultural Economics Society.
    10. Giraud, Georges, 2014. "The Effect of Terroir on Wine Business Model in Burgundy: To Make Wine or to Sell Harvest?," 2014 International European Forum, February 17-21, 2014, Innsbruck-Igls, Austria 199067, International European Forum on System Dynamics and Innovation in Food Networks.
    11. Bruno Pecchioli & David Moroz, 2023. "Do geographical appellations provide useful quality signals? The case of Scotch single malt whiskies," Post-Print hal-04144070, HAL.
    12. Svetlana Ignjatijević & Jelena Vapa Tankosić & Nemanja Lekić & Duško Petrović & Sandra Brkanlić & Bojan Vapa & Vladimir Tomašević & Nikola Puvača & Radivoj Prodanović & Irena Milojević, 2022. "Agro-Environmental Practices and Business Performance in the Wine Sector," Agriculture, MDPI, vol. 12(2), pages 1-21, February.
    13. Jeremy Galbreath, 2019. "Drivers of Green Innovations: The Impact of Export Intensity, Women Leaders, and Absorptive Capacity," Journal of Business Ethics, Springer, vol. 158(1), pages 47-61, August.
    14. Jeremy Galbreath & David Charles & Des Klass, 2014. "Knowledge and the Climate Change Issue: An Exploratory Study of Cluster and Extra-Cluster Effects," Journal of Business Ethics, Springer, vol. 125(1), pages 11-25, November.
    15. Stefano Castriota & Paolo Frumento & Francesco Suppressa, 2024. "Identifying the collective reputation premium: a spatial discontinuity approach," Discussion Papers 2024/310, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    16. Aaron J. Staples & Trey Malone & J. Robert Sirrine, 2021. "Hopping on the localness craze: What brewers want from state‐grown hops," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 463-473, March.
    17. Kym Anderson, 2012. "Rural Development in Georgia: What Role for Wine Export Growth?," Wine Economics Research Centre Working Papers 2012-01, University of Adelaide, Wine Economics Research Centre.

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    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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