Price Determinants of California Wine in the U.S. Market: Does the Type Matter?
2017
Asgari, Ali | Reed, Michael R.
The price of wine reflects the various features that differentiate each bottle. This study is aimed at analyzing the determinants of California wine prices. A hedonic price model is estimated using data collected between 2004 and 2015 from the Wine Spectator, with a total of 4,693 individual wines, focusing on type, age, critical points, and variables related to the origin. The impact of geographic production of origin from Bay Area/Central Coast, Carneros, Napa, Mendocino/Lake, and South Coast is analyzed. An important aspect of this analysis is to investigate whether the type of wine is important, and if any price premium regarding to the type (still and sparkling) is changing, holding quality and quantity constant. The main findings suggest California wine prices are determined by time related variables such as age. The expert points given by the Wine Spectator also have a significant impact on prices.
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