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Have policy distortion spilled overacross wine markets ? : evidence from the french wine sector

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Abstract

This paper investigates cross-market effects of policy instruments that were implemented in the table and quality wine market as one of the pillars of market intervention in Europe’s Common Market Organisation (CMO) for wine. We explore two hypotheses regarding the spill-over of distillation policy distortions and quality downgrading. Empirical evidence from France, the largest producer of quality wines in Europe, provides support for the hypothesis that distillation policy distortions in the quality wine market have spilledover to the table wine market. As predicted by our second hypothesis, we find evidence for quality downgrading, a phenomenon that has so far received little attention in the wine economics literature.

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  • Evens Saliès & Bodo Steiner, 2011. "Have policy distortion spilled overacross wine markets ? : evidence from the french wine sector," Documents de Travail de l'OFCE 2011-16, Observatoire Francais des Conjonctures Economiques (OFCE).
  • Handle: RePEc:fce:doctra:1116
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    File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2011-16.pdf
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    1. Mah, Jai S., 2006. "The effect of export insurance subsidy on export supply: The experience of Japan," Journal of Asian Economics, Elsevier, vol. 17(4), pages 646-652, October.
    2. Richard E, Just & Darrell L. Heuth & Andrew Schmitz, 2004. "The Welfare Economics of Public Policy," Books, Edward Elgar Publishing, number 3342, April.
    3. Byron, R P & Ashenfelter, Orley, 1995. "Predicting the Quality of an Unborn Grange," The Economic Record, The Economic Society of Australia, vol. 71(212), pages 40-53, March.
    4. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
    5. Bodo Steiner, 2004. "French Wines on the Decline? Econometric Evidence from Britain," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(2), pages 267-288.
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    More about this item

    Keywords

    Common market organization for wine; distillation; spill-over effects; quality downgrading; France; heterogeneous panel;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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