IDEAS home Printed from https://ideas.repec.org/p/ags/uwauwp/108668.html
   My bibliography  Save this paper

Return to wine: A comparison of the hedonic, repeat sales, and hybrid approaches

Author

Listed:
  • Fogarty, James Joseph
  • Jones, Callum

Abstract

Comparisons between the return to wine and standard financial assets are complicated in that the return to wine must be estimated from infrequent sales of heterogeneous wine brands. Wine returns can be estimated using several different approaches, and here the performance of the hedonic approach, repeat sales approach, and hybrid approach are compared using 14,102 auction sale observations for Australian wine over the period 1988 to 2000. For the data set considered the results show that the hybrid approach provides the most efficient estimates, and that the repeat sales approach provides significantly higher total return estimates than the other two approaches. The portfolio diversification benefit attributed to holding wine is then shown to vary with estimation method.

Suggested Citation

  • Fogarty, James Joseph & Jones, Callum, 2011. "Return to wine: A comparison of the hedonic, repeat sales, and hybrid approaches," Working Papers 108668, University of Western Australia, School of Agricultural and Resource Economics.
    • Handle: RePEc:ags:uwauwp:108668
    DOI: 10.22004/ag.econ.108668
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/108668/files/WP110019.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Callum Jones, 2010. "House Price Measurement: The Hybrid Hedonic Repeat‐Sales Method," The Economic Record, The Economic Society of Australia, vol. 86(272), pages 95-97, March.
    2. Masset, Philippe & Henderson, Caroline, 2010. "Wine as an Alternative Asset Class," Journal of Wine Economics, Cambridge University Press, vol. 5(1), pages 87-118, April.
    3. Case, Bradford & Quigley, John M, 1991. "The Dynamics of Real Estate Prices," The Review of Economics and Statistics, MIT Press, vol. 73(1), pages 50-58, February.
    4. Huberman, Gur & Kandel, Shmuel, 1987. "Mean-Variance Spanning," Journal of Finance, American Finance Association, vol. 42(4), pages 873-888, September.
    5. Masset, Philippe & Weisskopf, Jean-Philippe, 2010. "Raise Your Glass: Wine Investment And The Financial Crisis," Working Papers 90484, American Association of Wine Economists.
    6. Jack Triplett, 2004. "Handbook on Hedonic Indexes and Quality Adjustments in Price Indexes: Special Application to Information Technology Products," OECD Science, Technology and Industry Working Papers 2004/9, OECD Publishing.
    7. Kees Jan Van Garderen & Chandra Shah, 2002. "Exact interpretation of dummy variables in semilogarithmic equations," Econometrics Journal, Royal Economic Society, vol. 5(1), pages 149-159, June.
    8. Sanning, Lee W. & Shaffer, Sherrill & Sharratt, Jo Marie, 2008. "Bordeaux Wine as a Financial Investment," Journal of Wine Economics, Cambridge University Press, vol. 3(1), pages 51-71, April.
    9. James Joseph Fogarty, 2006. "The return to Australian fine wine," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(4), pages 542-561, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Esmeralda A. Ramalho & Joaquim J.S. Ramalho, 2014. "Convenient links for the estimation of hedonic price indexes: the case of unique, infrequently traded assets," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 68(2), pages 91-117, May.
    2. Eric Le Fur & Jean-François Outreville, 2019. "Fine wine returns: a review of the literature," Journal of Asset Management, Palgrave Macmillan, vol. 20(3), pages 196-214, May.
    3. Cardebat, Jean-Marie & Jiao, Linda, 2018. "The long-term financial drivers of fine wine prices: The role of emerging markets," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 347-361.
    4. Ma, Chunbo & Polyakov, Maksym & Pandit, Ram, 2015. "Solar Capitalization in Western Australian Property Market," Working Papers 199230, University of Western Australia, School of Agricultural and Resource Economics.
    5. Fogarty, James Joseph & Sadler, Rohan, 2012. "To Save or Savour: A Review of Wine Investment," Working Papers 139663, University of Western Australia, School of Agricultural and Resource Economics.
    6. Alan G Phipps & Dingding Li, 2019. "Calibration and evaluation of Quigley’s hybrid housing price model in Microsoft Excel," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-18, April.

    More about this item

    Keywords

    Research Methods/ Statistical Methods;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uwauwp:108668. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/aruwaau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.