Measuring the Economic Effect of Global Warming on Viticulture Using Auction, Retail, and Wholesale Prices

23 Pages Posted: 4 Jun 2010 Last revised: 3 Nov 2010

See all articles by Orley Ashenfelter

Orley Ashenfelter

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Karl Storchmann

Whitman College

Date Written: May 2010

Abstract

In this paper we measure the effect of year to year changes in the weather on wine prices and winery revenue in the Mosel Valley in Germany in order to determine the effect that climate change is likely to have on the income of wine growers. A novel aspect of our analysis is that we compare the estimates based on auction, retail, and wholesale prices. Although auction prices are based on actual transactions, they provide a thick market only for high quality, expensive wines and may overestimate climate's effect on farmer revenues. Wholesale prices, on the other hand, do provide broad coverage of all wines sold and probably come closest to representing the revenues of farmers. Overall, we estimate a 1°C increase in temperature would yield an increase in farmer revenue of about 30 percent.

Suggested Citation

Ashenfelter, Orley C. and Storchmann, Karl, Measuring the Economic Effect of Global Warming on Viticulture Using Auction, Retail, and Wholesale Prices (May 2010). NBER Working Paper No. w16037. Available at SSRN: https://ssrn.com/abstract=1617039

Orley C. Ashenfelter (Contact Author)

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
609-258-4040 (Phone)
609-258-2907 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Karl Storchmann

Whitman College ( email )

345 Boyer Avenue
Walla Walla, WA 99362
United States

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