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

Published online by Cambridge University Press:  08 June 2012

Danielle Wood  and
Kym Anderson
Danielle Wood
Affiliation:
Productivity Commission, Melbourne, Australia. Email: dwood@pc.gov.au.
Kym Anderson
Affiliation:
World Bank, University of Adelaide and CEPR, Washington DC. Email: kanderson@worldbank.org.
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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 seemingly unrelated regression 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. (JEL codes: C23, D12, D44, D80, G12)

Type
Articles
Information
Journal of Wine Economics , Volume 1 , Issue 2 , Fall 2006 , pp. 141 - 161
Copyright
Copyright © American Association of Wine Economists 2006

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