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The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices

Author

Listed:
  • Robin Cross

    (Oregon State University)

  • Andrew J. Plantinga

    (Oregon State University)

  • Robert N. Stavins

    (John F. Kennedy School of Government, Harvard University, National Bureau of Economic Research, Resources for the Future)

Abstract

We examine the value of terroir, which refers to the special characteristics of a place that impart unique qualities to the wine produced. We do this by conducting a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attributes, such as slope, aspect, elevation, and soil types, or designated appellations are more important determinants of price. We find that prices are strongly determined by sub-AVA appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, although the reality of terroir – as proxied for by locational attributes – is not significant

Suggested Citation

  • Robin Cross & Andrew J. Plantinga & Robert N. Stavins, 2011. "The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices," Working Papers 2011.12, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2011.12
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    References listed on IDEAS

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    1. 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.
    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," Journal of Wine Economics, Cambridge University Press, vol. 3(01), pages 1-9, March.
    3. 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.
    4. 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(01), pages 10-29, March.
    5. 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:

    1. Anderson, Kym & Wittwer, Glyn, 2015. "Asia's evolving role in global wine markets," China Economic Review, Elsevier, vol. 35(C), pages 1-14.
    2. 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 Innovation and System Dynamics in Food Networks.
    3. 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(02), pages 159-188, November.
    4. Anderson, Kym, 2013. "Is Georgia the Next “New” Wine-Exporting Country?," Journal of Wine Economics, Cambridge University Press, vol. 8(01), pages 1-28, May.
    5. 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.
    6. 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.
    7. repec:wsi:serxxx:v:62:y:2017:i:02:n:s0217590816500399 is not listed on IDEAS

    More about this item

    Keywords

    Wine; Vineyard; Hedonic Price Analysis;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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