The author thanks the Editor of this Journal and an anonymous referee for helpful comments. All interpretations and any errors are the author's sole responsibility.
Predicting the Quality and Prices of Bordeaux Wine*
Article first published online: 29 MAY 2008
© The Author(s). Journal compilation © Royal Economic Society 2008
The Economic Journal
Volume 118, Issue 529, pages F174–F184, June 2008
How to Cite
Ashenfelter, O. (2008), Predicting the Quality and Prices of Bordeaux Wine. The Economic Journal, 118: F174–F184. doi: 10.1111/j.1468-0297.2008.02148.x
- Issue published online: 29 MAY 2008
- Article first published online: 29 MAY 2008
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.