WINE QUALITY DIFFERENTIALS IN HEDONIC GRAPE PRICING

The paper focuses on identification and evaluation of wine quality characteristics of grapes. A pricing schedule that rewards producers for quality attributes is developed. This quality-based pricing schedule would serve to reduce the production of poor-quality wines by giving farmers a correct and powerful incentive to provide better grapes. The research evaluates the proposed grape price schedule in two steps. The hedonic qualities of Israeli grapes are estimated by relating the contribution of each grape characteristic to wine quality. Then the price of wine quality is estimated, and the hedonic prices for Israeli grapes are calculated. Results show that the current pricing system pays little premium for a better-quality product.     

Microeconometric analysis of wine grape supply contracts in Australia*

This paper examines wine grape supply contracts used in the main grape growing regions of Australia. An empirical analysis provides insight into specific aspects of contract design and implementation. Statistical analyses of sample data reveal differences between regions in contract specifications. Lower quality grape growing regions place a greater reliance on grape quality assessment to determine bonus/penalty payments compared to higher quality regions. Contracts in higher quality regions place greater emphasis on explicit winery involvement and direction in vineyard management. Results indicate that longer duration contracts are more inclusive in terms of the number of clauses included. Evidence of risk shifting (i.e., winery to grower) for high quality grapes is reported, where the price received by growers is determined by the bottle price of the wine produced.     

Hedonic wine price functions with different prices

This study examines the impact that recommended retail prices, actual market prices and the release of a prominent wine guide have on Australian wine hedonic price estimates, for attributes such as sensory quality, winery reputation and grape region. In general, hedonic price estimates appear to be independent of prices employed. The main identified differences in estimates relate to the size of the producer and some regional impacts. For market prices only, increases in producer size are estimated to reduce prices. This implies the existence of supply chain quantity discounting price practices. The impact of an authoritative wine guide appears to have a negligible influence on prices in Australia. In the absence of market transaction prices, the common practice of employing recommended prices for hedonic wine price estimation is defendable.     

Label Style and Color Contribution to Explain Market Price Difference in Italian Red Wines Sold in the Chinese Wine Market

This study employs a hedonic price methodology to investigate the implicit price of individual labelling characteristics of Italian red wines sold in the Chinese market. Our results highlight the most important quality attributes (extrinsic and intrinsic) given in the label capable to explain price difference. In particular, reveal significant premium price for wine origin, identified in particular through the DOC/DOCG appellation given in the label, and for clean labels or labels with particular designs. On the contrary, a price discount has been revealed for Italian wines produced with local grape varieties and with a label characterised by warm colors. These results, partly in disagreement with other empirical evidence, contribute to enrich the existing literature in this field by providing useful suggestions both to the producers and other stakeholders operating in the wine industry.     

西北葡萄酒产业资源优势向竞争优势转变的路径研究

西北葡萄酒生态资源禀赋优势,是我国生产优质葡萄酒最有竞争优势的资源。该文论述了发展西北葡萄酒产业的现实意义,分析了西北葡萄酒产业的生态资源、科技资源、政府能动力、文化资源方面的比较优势及其发展现状与存在的问题。该文认为西北葡萄酒产业已经从快速增长期进入战略转折期,并从区划研究、培育区域形象、提高企业核心竞争力、原产地保护方面提出了增强西北葡萄酒产业竞争优势的路径选择。     

Wine market prices and investment under uncertainty: an econometric model for Bordeaux Crus Classés

This paper describes an econometric assessment of wine market prices for 21 of the Crus Classés châteaux in the Bordeaux region of France. The model developed in the analysis attempts to define the relationship between factors that influence wine quality and those that influence wine prices. Characteristics of the models are: (1) climate influences on grape composition (acid and sugar levels), (2) grape composition influences on market prices, (3) subjective quality evaluations (Parker‐points) on market prices, and (4) the effects of age of the wine on market prices. The results indicate that composition levels of Merlot‐dominated wines are more climate sensitive than those from Cabernet Sauvignon‐dominated wines. Overall, warm, dry summers result in high sugar and low acid levels at harvest which in turn lead to higher quality wines. Wine market price sensitivity to Parker‐point ratings indicates that properties with high Cabernet Sauvignon‐dominated wines are highly dependent on the external ratings while Merlot‐dominated wines have a decreased rating sensitivity. Smaller properties tend to gain over proportionally from high ratings indicating great jumps in price from year to year. Additionally, châteaux that have experienced high ratings for past vintages exhibit great sensitivity to point steps in ratings for current vintages. Aging has a positive effect on Bordeaux wine pricing. This is due to the increasing maturity as well as the increasing absolute scarcity. Absolute scarcity of product is expressed by the size of the property, with small properties producing less per vintage and therefore having less in the market. Additionally, Merlot‐dominated wines exhibit more maturing potential and profit more from aging than Cabernet Sauvignon‐dominated wines. Average per château real annual profit ranges from 1 to 10%. High levels of grape ripeness, absolute scarcity, and smaller properties that are dominated by Merlot in their blend lead to the highest profits. Forecasts for a vintage not yet on the market indicates that 1995 is better than 1994 for both Cabernet Sauvignon and Merlot‐dominated wines, but that 1996 and 1997 are not as good as 1995, especially for Merlot‐dominated wines.     

Farm size,productivity and returns to scale in agriculture revisited: a case study of wine producers in South Africa

The inverse relationship between farm size and productivity has almost become a ‘stylised fact’ in the economic development literature. Most of the studies contributing to this preception have been Hawed by methodological shortcomings and the request is that these studies be treated with caution. Using recent farm survey data from the wine producing areas of the Western Cape of South Africa, this study attempts to overcome some of the methodological problems, distinguishing between partial and total productivity measures. Using data envelopment analysis, most of the wine grape producers were found to operate under constant returns to scale. Co-operative membership seemed to overcome the economies of scale associated with processing and marketing. The inverse relationship between farm size and both land productivity and total factor productivity is weak, not consistently negative and differs between regions. Thus, caution must be used when advocating rural development policies based on the inevitability of an inverse relationship existing in all sectors and production regions of agriculture.     

气候变化对新疆酿酒葡萄种植气候区划的影响

研究气候变化背景下新疆酿酒葡萄种植气候区划的变化,对适应气候变化,科学制定新疆酿酒葡萄发展规划,促进新疆葡萄酒产业的持续稳定发展具有重要意义。利用新疆101个气象站1961~2014年的历史气候资料,使用线性趋势分析、累积距平和t-检验以及基于Arc GIS的混合插值法,在对近54年新疆无霜冻期、4~9月干燥度指数和大风日数时空变化进行分析的基础上,结合酿酒葡萄种植气候区划指标,对气候变化背景下新疆酿酒葡萄种植气候区划的变化进行了分析。研究结果表明:新疆无霜冻期表现为"南疆长,北疆短;平原和盆地长,山区短"、4~9月干燥度为"平原和盆地大,山区小"、4~9月大风日数呈现"北疆多,南疆少;东部和西部多,中部少;峡谷和山口地带多,平原地区少"的空间分布特点。近54年,新疆无霜冻期总体以3.57d/10a的倾向率呈显著(α=0.001)增多趋势,并于1997年发生了突变。4~9月干燥度和大风日数分别以-0.40/10a和-3.10d/10a的倾向率呈显著(α=0.001)减小(少)趋势,且分别于1987年和1986年发生了突变。受其影响,1997年后较其之前,新疆酿酒葡萄最适宜种植区减小了6.201万km~2,占比减小3.7个百分点;适宜种植区增大了25.63万km~2,占比增大15.4个百分点;次适宜种植区和不宜种植区分别缩小了7.432万km~2和11.99万km~2,占比分别减小4.4和7.2个百分点。气候变化对新疆酿酒葡萄种植的影响既有利也有弊,但总体来说利大于弊。适宜区面积明显扩大,次适宜和不适宜区面积明显减小,这对促进新疆酿酒葡萄种植业以及葡萄酒产业发展具有重要意义,但最适宜种植区面积略有减小又会产生一定不利影响。     

Alcohol Tax,Price–Quality Proxy and Discounting: A Reason Why Alcohol Taxes May Rebound

The increasing concern about the external costs of alcohol consumption has often led economists and policy‐makers to advocate taxes to internalise the social costs and target consumption. However, in certain markets for alcoholic drinks – particularly wine – price is not only a cost but also an indicator of quality, guiding consumer choice. There is, perhaps, a higher probability of ex post satisfaction with products at higher prices in a market with potential adverse selection. The price–quality proxy interacts with discounts, where the full price of the product before discount (referred to as the External Reference Price in the marketing literature) is used as a quality reference. This study shows that an alcohol tax in the presence of discounting may increase the perceived value of the product, and therefore persuade consumers to prefer the purchase of more expensive wines with the highest discount. As a consequence, consumers could favour products with higher alcohol content – which contradicts the objectives of the policy. Consequently, for an alcohol tax to be effective discounting of alcoholic beverages (in particular, wine) should be regulated to avoid the policy backfiring.     

Efficiency in wine grape production: comparing long‐established and newly developed regions of South Africa

Efficiency, partly based on technology, is central to international competitiveness. This article applies a stochastic frontier inefficiency model to a panel of 77 wine grape farms in South Africa between 2005 and 2015 and allows the comparison of efficiency levels for the old established wine regions with those of newer entrants. Thus, we investigate whether experience plus first choice of location matters more than the follower's advantage of newer technology. In all regions, a greater share of permanent labor and increased supervision raised efficiency, while more inorganic fertilizer and less irrigation has the opposite effect. Innovations in trellising had insignificant effects (except in the old regions) but not replacing old vines reduced efficiency. However, a higher proportion of red varietals also lowered efficiency in the old regions due to a fall in the price of red wine as these farmers continued to concentrate on quality reds. The new regions compensated for falling prices by increasing crop size with irrigation and fertilizer and extending the area planted, but with less concern for quality. This appears to be more successful in efficiency terms, but as international demand for quality wine increases it may be a poor long‐term strategy.     

贺兰山东麓银川地区酿酒葡萄农业气候资源对气候变化的响应

[目的]为合理利用农业气候资源,主动适应气候变化提供依据。[方法]基于宁夏银川地区1961-2015年地面气象观测资料,明确了酿酒葡萄生长季内主要农业气候资源、影响酿酒葡萄品质的主要农业气候因子及主要农业气象灾害的演变特征。[结果]近55年银川日平均气温稳定通过10℃起始时间提前,结束时间显著推迟,日平均气温稳定通过10℃持续时间显著增加,每10年分别增加97.6℃和2.6d,尤其是1995年后积温出现了明显增加。近55年酿酒葡萄适宜的放条出土时间提前,可能的生长季呈显著延长趋势,生长季内热量资源显著增加。近55年酿酒葡萄全生育期内日照时数呈显著减少趋势,生育期内日较差均呈不显著的减少趋势,但在酿酒葡萄适宜生长范围内。最热月(7~8月)平均气温显著增加,每10年增加0.28℃,不利于酿酒葡萄优良品质的形成。酿酒葡萄采收前1个月(9月)降水量及降水日数表现为增加趋势,对品质形成不利。不同级别霜冻及越冬冻害发生频率有所减少。[结论]热量资源增加为晚熟品种的成熟提供了保证,但是霜冻及越冬冻害依然不容忽视。     

Who gains from Australian generic wine promotion and R&D?

The present paper estimates the distributions of aggregate returns from different types of research and promotion investments by the Australian grape and wine industry among grapegrowers, winemakers, domestic and foreign consumers, and the tax office. The results show that most of the gains from cost-reducing R&D in grape and wine production go to producers and that producers get a far larger share of the benefit from export promotion than that from domestic promotion. Foreign consumers of Australian wine also enjoy a significant share of the benefits from Australian R&D. Sensitivity analysis shows that the key results hold for a wide range of parameter values.     

Segmenting the Wine Market Based on Price: Hedonic Regression when Different Prices mean Different Products

Many economists have estimated hedonic price functions for red and white wine. However, estimating a single hedonic price function imposes the assumption that the implicit prices of the attributes are the same for any red or white wine. We argue that even within these two categories, wines are differentiated, and disregarding this heterogeneity causes an aggregation bias in the estimated implicit prices. By estimating hedonic functions specific to price ranges, we show that the wine market is segmented into several product classes or market segments. We find that a model accounting for the existence of wine classes has greater ability to explain the variability in the data and produces more accurate and interpretable results regarding the implicit prices of the attributes.     

Analyzing Consumer Preference for Wine Product Bundles: Implications for the Retail and Wine Industry

This research examines a marketing technique (bundling) that wine companies may use to gain access to retail stores. The study examined consumers' perception toward bundling with respect to the Australian wine market and the results allowed for the formulation of market segments, which aimed to provide a better understanding of the wine-bundle purchaser. Cluster analysis highlighted three market segments, in particular, one consumer segment is prone to purchasing wine bundles and is interested in deals. While exploratory in nature, the research may provide an insight into global wine marketing strategy.     

Formation and adaptation of reference prices in grain marketing: an experimental study

This study aimed to explore how producers’ reference prices are formed and adapt over time, and how they affect marketing decisions. Results indicate that producers focus on three major variables to form their reference prices: the current market price, the highest price to date, and their expectation about price behavior. Further, they update their reference prices during the marketing season mainly in response to changes in current market prices, their own expectations about price behavior, and the general price trend. Finally, our findings suggest that producers’ marketing decisions are based on the spread between current market price and reference price, the general market trend and price expectation.     

The relation between Australian wine show results and prices

This paper assesses wine show results and their relation with wine prices across seven Australian shows. Consistent with previous studies, only a moderate degree of agreement for medals exists among shows. The correlation of wine show points across shows is also only moderate. Hedonic wine price functions, which employ show medal/points as direct measures of quality, indicate that for some shows estimated premiums are statistically significant and may possibly be practically important. The relation of show opinion with prices, however, is reduced for models which recognise the separate impact of objective quality and show opinion on prices. The results imply that producers should seek to improve the objective quality of their wines to achieve price premiums. Producers could also selectively target some wine show opinions to gain additional higher prices.     

IMPERFECT COMPETITION AND THE COBWEB THEOREM: A VEGETABLE CASE

Producer price changes are dependent on final demand, marketed volume and marketing cost, but the less than perfect competition which may determine this last is ignored in formulating the cobweb theorem. Attention to monopsonistic buying of farm products has importance in the choice between stabilisation measures directed at producers and marketing firms, and also as regards the need for integration of the theory of imperfect competition and the analysis of agricultural price cycles. Cyclical instability is a serious problem in the New Zealand vegetable industry. The size and inflexibility of retail margins significantly accentuate producer price fluctuations. Auctions are the main mechanism for price formation, and high retail margins appear to be permitted by the non-competitive elements in this marketing system. The most promising avenues for improvement would be in reform of auction procedures and exploration of alternative marketing channels for vegetables.     

Latent Class Analysis of Consumer Preferences for Wine in Tirana,Albania

This research aimed to determine wine attributes preferred by consumers in Tirana, Albania, and consumer segments based on preferences and sociodemographic factors. To accomplish these objectives, a conjoint choice experiment was designed. Data were analyzed with the latent class approach. Initial results showed a 5-class model fit best. Results indicated that younger people tend to prefer Italian wines over domestic wines, whereas some older consumers strongly prefer domestic, lower priced wines. Other domestic wine consumers sought higher prices, possibly indicating a niche demand for high-quality Albanian wines. The wine industry and its marketers might use this information to strategically market their wine to different groups. Overall, the majority of the respondents preferred Italian wines, but many might be persuaded toward domestic wine. Government assistance in standardizing the quality of wine and introducing new grape cultivars and efficient farming practices should aid long-term competitiveness of domestic wine in Albania.     

Sunburn on the Vineyard: Terroir and the Sustainability of Juice Grapes in an Arid Climate

Agricultural sustainability practices make the best use of both nature's resources and available technology, and generally avoid those land use practices that lead to greater environmental stress. There are examples in some agro-ecosystems, however, where stress is vital to food quality and productivity. In the case of grape production, a limited amount of environmental stress actually leads to an increase in fruit quality, and with wine grapes, to improved wine quality. But when the stress exceeds an acceptable threshold, vine vigour declines and production and quality may be compromised. Using our experiences with environmental stress in grapes grown in the landscapes of Central and Eastern Washington, USA, we question how agricultural sustainability should consider environmental stress, and at what point management interventions contribute or detract from a sustainable system. Framed by the two French land-related terms ‘appellation’ and ‘terroir’, we discuss agricultural sustainability for grape cultivation in an arid climate.     

Disaggregated econometric estimation of consumer demand response by alcoholic beverage types

The paper presents estimates of price elasticities of demand for 12 disaggregated alcoholic beverages in Australia: premium beer, full strength beer, low alcohol beer and mid‐strength beer; red bottled wine, white bottled wine, sparkling wine, cask wine; dark and light ready‐to‐drink (RTD); and dark and light spirits. These disaggregated categories correspond closely to the commodities of interest to public policymakers with respect to taxation and health policies. The system of demand equations is estimated with Nielsen's data using a semiflexible Almost Ideal Demand System model in order to impose negative semi‐definiteness on the demand parameters. Results indicate elastic own‐price elasticities for virtually all commodities. Cross‐price elasticities suggest that beverages most linked with negative externalities, namely full strength beer, dark RTD and dark spirits, may need to be taxed jointly. Any proposed tax increase to cask wine may also result in consumers shifting demand to more undesirable beverages. The elasticity estimates are used to illustrate the effect of a hypothetical change towards taxation equalisation based on alcohol content. These elasticities offer crucially needed inputs for analysing any tax change policies.