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

January 22, 2014

HEC Paris Research Paper No. FIN-2013-1019

Using long-term price records for Premiers Crus Bordeaux, we examine the impact of aging on wine prices and the long-term investment performance of fine wine. As well as time effects, our model identifies the impacts of age, château, vintage, and transaction type. Young high-quality wines, that are still maturing, provide the highest financial return, while famous wines deliver a quantifiable non-pecuniary benefit to owners. Using an arithmetic repeat-sales regression over 1900-2012, we estimate a real financial return to wine investment of 4.1%, which exceeds government bonds, art, and investment-quality stamps. Wine appreciation is positively correlated with stock market returns.

Number of Pages in PDF File: 45

Keywords: alternative investments; luxury goods; price indexes; psychic return; wine

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

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Date posted: September 7, 2013 ; Last revised: January 22, 2014

Suggested Citation

Dimson, Elroy and Rousseau, Peter L. and Spaenjers, Christophe, The Price of Wine (January 22, 2014). HEC Paris Research Paper No. FIN-2013-1019. 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

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