Natural Endowments, Production Technologies and the Quality of Wines in Bordeaux: Does Terroir Matter?
KEDGE - Bordeaux Business School
Victor A. Ginsburgh
Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE); Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)
The Economic Journal, Vol. 118, No. 529, pp. F142-F157, June 2008
We study whether quality assessments made by wine experts and by consumers (based on prices obtained at auction between 1980 and 1992) can be explained by variables describing endowments (land characteristics, exposures of vineyards) and technologies (from grape varieties and picking, to bottled wines). However, since technological choices are likely to depend on endowments, the effects can only be identified using an instrumental variables approach. We show that technological choices affect quality much more than natural endowments, the effect of which is negligible.
Number of Pages in PDF File: 16
Date posted: May 30, 2008