Modelling prices and the reputation of individual named wines

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This article develops empirical models to assess the relation between the reputation of an individual named wine and its price. Unrestricted and polynomial distributed lag models are used to assess the impact of past expert quality ratings on the prices of Australian premium wines. Results point to the practical unimportance of current wine quality scores impacting prices and suggest that quality score lag effects up to six years may be important. The largest individual lagged impact of quality on price is estimated to occur at approximately two years, and prices are estimated to increase by more than 10% over six years for a one-point quality score increase. A procedure for identifying potential wine price bargains based on a comparison of price predictions from estimated wine reputation and current quality measures is illustrated. The implications of the findings for wine producers are also discussed.
Original languageEnglish
Pages (from-to)3464-3476
Number of pages13
JournalApplied Economics
Volume50
Issue number32
Early online dateJan 2018
DOIs
Publication statusPublished - 09 Jul 2018

Fingerprint

Modeling
Wine
Premium
Rating
Empirical model
Lag
Polynomials
Prediction
Distributed lag model

Cite this

@article{20543a6bba0d43be8a85c8cb1a1ac71d,
title = "Modelling prices and the reputation of individual named wines",
abstract = "This article develops empirical models to assess the relation between the reputation of an individual named wine and its price. Unrestricted and polynomial distributed lag models are used to assess the impact of past expert quality ratings on the prices of Australian premium wines. Results point to the practical unimportance of current wine quality scores impacting prices and suggest that quality score lag effects up to six years may be important. The largest individual lagged impact of quality on price is estimated to occur at approximately two years, and prices are estimated to increase by more than 10{\%} over six years for a one-point quality score increase. A procedure for identifying potential wine price bargains based on a comparison of price predictions from estimated wine reputation and current quality measures is illustrated. The implications of the findings for wine producers are also discussed.",
keywords = "Wine prices, individual wine reputation, wine quality",
author = "Eddie Oczkowski",
year = "2018",
month = "7",
day = "9",
doi = "10.1080/00036846.2017.1422599",
language = "English",
volume = "50",
pages = "3464--3476",
journal = "Applied Economics",
issn = "0003-6846",
publisher = "Routledge",
number = "32",

}

Modelling prices and the reputation of individual named wines. / Oczkowski, Eddie.

In: Applied Economics, Vol. 50, No. 32, 09.07.2018, p. 3464-3476.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Modelling prices and the reputation of individual named wines

AU - Oczkowski, Eddie

PY - 2018/7/9

Y1 - 2018/7/9

N2 - This article develops empirical models to assess the relation between the reputation of an individual named wine and its price. Unrestricted and polynomial distributed lag models are used to assess the impact of past expert quality ratings on the prices of Australian premium wines. Results point to the practical unimportance of current wine quality scores impacting prices and suggest that quality score lag effects up to six years may be important. The largest individual lagged impact of quality on price is estimated to occur at approximately two years, and prices are estimated to increase by more than 10% over six years for a one-point quality score increase. A procedure for identifying potential wine price bargains based on a comparison of price predictions from estimated wine reputation and current quality measures is illustrated. The implications of the findings for wine producers are also discussed.

AB - This article develops empirical models to assess the relation between the reputation of an individual named wine and its price. Unrestricted and polynomial distributed lag models are used to assess the impact of past expert quality ratings on the prices of Australian premium wines. Results point to the practical unimportance of current wine quality scores impacting prices and suggest that quality score lag effects up to six years may be important. The largest individual lagged impact of quality on price is estimated to occur at approximately two years, and prices are estimated to increase by more than 10% over six years for a one-point quality score increase. A procedure for identifying potential wine price bargains based on a comparison of price predictions from estimated wine reputation and current quality measures is illustrated. The implications of the findings for wine producers are also discussed.

KW - Wine prices, individual wine reputation, wine quality

U2 - 10.1080/00036846.2017.1422599

DO - 10.1080/00036846.2017.1422599

M3 - Article

VL - 50

SP - 3464

EP - 3476

JO - Applied Economics

JF - Applied Economics

SN - 0003-6846

IS - 32

ER -