What Determines the Future Value of an Icon Wine? New Evidence from Australia

33 Pages Posted: 15 Sep 2005

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Danielle Wood

Government of the Commonwealth of Australia - Melbourne Office

Date Written: May 2005

Abstract

To what extent can the future price of icon wines be anticipated from information available at the time of their initial sale by wineries? Using a hedonic model, we show that weather variables and changes in production techniques, along with the age of the wine, have significant power in explaining the secondary market price variation across different vintages of each of three icon Australian red wines. The results have implications for winemakers in determining the prices they pay for grapes and charge for their wines, and for consumers/wine investors as a guide to the prospective quality of immature icon wines.

Keywords: Wine quality, investment under certainty, hedonic pricing model

JEL Classification: C23, D12, D44, D80, G12

Suggested Citation

Anderson, Kym and Wood, Danielle, What Determines the Future Value of an Icon Wine? New Evidence from Australia (May 2005). CEPR Discussion Paper No. 5044, Available at SSRN: https://ssrn.com/abstract=774228

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Danielle Wood

Government of the Commonwealth of Australia - Melbourne Office ( email )

Level 28, 35 Collins Street
Melbourne, Victoria 3000
Australia
+161 3 9653 2219 (Phone)
+161 3 9653 2305 (Fax)

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