Predicting the Quality and Prices of Bordeaux Wine

Orley Ashenfelter

Economic Journal, 2008, vol. 118, issue 529, pages F174-F184

Abstract: Bordeaux wines have been made in much the same way for centuries. This article shows that the variability in the quality and prices of Bordeaux vintages is predicted by the weather that created the grapes. The price equation provides a measure of the real rate of return to holding wines (about 2-3% per annum) and implies far greater variability in the early or 'en primeur' wine prices than is observed. The analysis provides a useful basis for assessing market inefficiency, the effect of climate change on the wine industry and the role of expert opinion in determining wine prices. Copyright © The Author(s). Journal compilation © Royal Economic Society 2008.

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