Abstract

http://ssrn.com/abstract=2321573
 


 



The Price of Wine


Elroy Dimson


London Business School; University of Cambridge - Judge Business School

Peter L. Rousseau


Vanderbilt University - Department of Economics

Christophe Spaenjers


HEC Paris - Finance Department

December 11, 2014

Journal of Financial Economics (JFE), Forthcoming

Abstract:     
Using historical price records for Bordeaux Premiers Crus, we examine the impact of aging on wine prices and the long-term investment performance of fine wine. In line with the predictions of an illustrative model, young maturing wines from high-quality vintages provide the highest financial returns. Past maturity, famous châteaus deliver growing non-pecuniary benefits to their owners. Using an arithmetic repeat-sales regression over 1900-2012, we estimate a real financial return to wine investment (net of storage costs) of 4.1%, which exceeds bonds, art, and stamps. Returns to wine and equities are positively correlated. Finally, we find evidence of in-sample return predictability.

Number of Pages in PDF File: 50

Keywords: wine prices; alternative investments; price indexes; psychic return; bubbles

JEL Classification: C43, D44, G11, G12, Q11, Z11

Accepted Paper Series





Download This Paper

Date posted: September 7, 2013 ; Last revised: December 12, 2014

Suggested Citation

Dimson, Elroy and Rousseau, Peter L. and Spaenjers, Christophe, The Price of Wine (December 11, 2014). Journal of Financial Economics (JFE), Forthcoming. Available at SSRN: http://ssrn.com/abstract=2321573 or http://dx.doi.org/10.2139/ssrn.2321573

Contact Information

Elroy Dimson
London Business School ( email )
Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom
44 20 7000 7000 (Phone)
44 700 607 7390 (Fax)
HOME PAGE: http://www.london.edu/faculty/edimson
University of Cambridge - Judge Business School
Trumpington Street
Cambridge, CB2 1AG
United Kingdom
Peter L. Rousseau
Vanderbilt University - Department of Economics ( email )
Box 1819 Station B
Nashville, TN 37235
United States
615-343-2466 (Phone)
615-343-8495 (Fax)
HOME PAGE: http://www.vanderbilt.edu/econ/faculty/rousseau.html
Christophe Spaenjers (Contact Author)
HEC Paris (Groupe HEC) - Finance Department ( email )
1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Feedback to SSRN


Paper statistics
Abstract Views: 4,216
Downloads: 927
Download Rank: 13,119

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.375 seconds