Explaining Wine Scores Through Stochastic Frontier Analysis
Gustavo Ferro and
Nicolás Gatti
No 4621, Asociación Argentina de Economía Política: Working Papers from Asociación Argentina de Economía Política
Abstract:
Experts give scores to wines, which are quality proxies for marketers and buyers. The production of wine quality is explained by a set of observable objective attributes, plus another set of unobservable and subjective (sensory) features, and randomness. We use a Stochastic Frontier Approach (SFA) to understand whether objective and subjective (sensory) characteristics of wines explain the differences in wine scores. We estimate a wine quality stochastic frontier production function, using a database of 1800 top-scored wines, in an 18 years-window encompassing objective determinants (price, production, year, grape, country, etcetera), being sensory aspects related to wine grading unobservable. We find that the variables included explain half of the “efficiency” in attaining scores and our results suggest that sensory variables may have a role in explaining inefficiency.
JEL-codes: D61 L66 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2022-11
New Economics Papers: this item is included in nep-agr, nep-cul and nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:aep:anales:4621
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