Modeling Grape Price Dynamics in Mendoza: Lessons for Policymakers

German Puga, James Fogarty, Atakelty Hailu and Alejandro Gennari

Journal of Wine Economics, 2019, vol. 14, issue 4, 343-355

Abstract: Mendoza is the main wine-producing province of Argentina, and the government is currently implementing a range of policies that seek to improve grape grower profitability, including a vineyard replanting program. This study uses a dataset of all grape sales recorded in Mendoza from 2007 to 2018, totaling 90,910 observations, to investigate the determinants of grape prices. Key findings include: smaller volume transactions receive lower-average prices per kilogram sold; the discount for cash payments is higher in less-profitable regions; and the effect of wine stock levels on prices is substantial for all varieties. Long-run predicted prices are also estimated for each variety, and region; and these results suggest that policymakers should review some of the varieties currently used in the vineyard replanting program. (JEL Classifications: Q12, Q13, Q18)

Date: 2019
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