WINE ECONOMICS Quantitative Studies and Empirical Applications Siv S
Total Page:16
File Type:pdf, Size:1020Kb
Applied Econometrics Association Series General Editors: Orhan Güvenen, Emeritus Professor, Erasmus University, Rotterdam; and Henri Serbat, University of Paris 2 The vital importance of econometrics for understanding economic phenomena is increasingly recognized in every field of economics. The discipline is based on ‘scientific processes, which aim to identify, explain and forecast economic phenomena using formalised tools to produce, measure, structure and model the information’ (Gérard Duru and Henri Serbat, 1991). The Applied Econometrics Association, established 1974, seeks to develop the use of econometric tools by regular updates on the state of the art and the progress made in each specific field, and so to further the transformation of unconnected facts into pertinent information for use in analysis and decision-making. The series was conceived to form a set of working references for advanced students and researchers in each specific field, as well as a guide to development across the discipline more broadly. This exchange of knowledge will be continued permanently by the opening of a debate site on the Internet (http;/www.aea.fed-eco.org). Titles include: Serge Allegrezza and Anne Dubrocard (editors) INTERNET ECONOMETRICS Patrick-Yves Badillo and Jean-Baptiste Lesourd (editors) THE MEDIA INDUSTRIES AND THEIR MARKETS Quantitative Analyses Françoise Bourdon and Jean Bourdon (editors) WAGE ECONOMETRICS AND MODELLING Fabrizio Carlevaro and Jean-Baptiste Lesourt (editors) MEASURING AND ACCOUNTING ENVIRONMENTAL NUISANCES AND SERVICES Arthur Getis, Je´susMur and Henry G. Zoller (editors) SPATIAL ECONOMETRICS AND SPATIAL STATISTICS Eric Giraud-Héraud and Marie-Claude Pichery (editors) WINE ECONOMICS Quantitative Studies and Empirical Applications Siv S. Gustafsson and Danièle E. Meulders (editors) GENDER AND THE LABOUR MARKET Econometric Evidence of Obstacles to Achieving Gender Equality Hans Heijke and Joan Muysken (editors) EDUCATION AND TRAINING IN A KNOWLEDGE-BASED ECONOMY Pavlos Karadeloglou (editor) EXCHANGE-RATE POLICY IN EUROPE Pavlos Karadeloglou and Virginie Terraza (editors) EXCHANGE RATES AND MACROECONOMIC DYNAMICS Sandrine Lardic and Valérie Mignon (editors) RECENT DEVELOPMENTS ON EXCHANGE RATES Benoît Mahy, Robert Plasman and François Rycx (editors) GENDER PAY DIFFERENTIALS Cross-National Evidence from Micro-Data David Marsden and François Rycx (editors) WAGE STRUCTURES, EMPLOYMENT ADJUSTMENTS AND GLOBALIZATION Evidence from Linked and Firm-level Panel Data Danièle Meulders, Robert Plasman and François Rycx (editors) MINIMUM WAGES, LOW PAY AND UNEMPLOYMENT Carine Peeters and Bruno van Pottelsberghe de la Potterie (editors) ECONOMIC AND MANAGEMENT PERSPECTIVES ON INTELLECTUAL PROPERTY RIGHTS Emile Quinet and Roger Vickerman (editors) THE ECONOMETRICS OF MAJOR TRANSPORT INFRASTRUCTURES Philippe Thalmann and Milad Zarin-Nejadan (editors) CONSTRUCTION AND REAL ESTATE DYNAMICS Applied Econometrics Association Series Standing Order ISBN 978–0–333–91990–3 (cased) and 978–0–333–71460–7 (paperback) (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and one of the ISBNs quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England Wine Economics Quantitative Studies and Empirical Applications Edited by Eric Giraud-Héraud Director of Research, Institut National de la Recherche Agronomique, France and Marie-Claude Pichery Professor Emeritus, University of Bourgogne, France Selection, introduction and editorial content © Eric Giraud-Héraud and Marie-Claude Pichery 2013 Individual chapters © Contributors 2013 Softcover reprint of the hardcover 1st edition 2013 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2013 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN 978-1-349-45018-3 ISBN 978-1-137-28952-0 (eBook) DOI 10.1007/978-1-137-28952-0 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. Contents List of Figures ix List of Tables xi Acknowledgements xv Notes on Contributors xvi Introduction and Overview 1 Eric Giraud-Héraud and Marie-Claude Pichery Part I Alcohol Consumption and Welfare 1 Life Satisfaction and Alcohol Consumption: An Empirical Analysis of Self-Reported Life Satisfaction and Alcohol Consumption in OECD Countries 11 Jan Bentzen and Valdemar Smith 1.1 Introduction 11 1.2 Literature review and issues in the happiness–income link 12 1.3 Modelling of the happiness–alcohol relationship 14 1.4 Alcohol consumption and life satisfaction 16 1.5 Estimating the happiness–alcohol model 19 1.6 Conclusions 22 2 Alcohol Demand, Externalities and Welfare-Maximising Alcohol Taxes 28 James J. Fogarty 2.1 Introduction 28 2.2 The alcohol market 29 2.3 Optimal alcohol tax model 36 2.4 Calibration case study 40 2.5 Conclusion 45 3 The Demand for (Non)Alcoholic Beverages in France and the Impact of Advertising 49 Ruben Hoffmann and Yves Surry 3.1 Introduction 49 3.2 Model framework 54 3.3 Data and estimation procedure 56 3.4 Empirical results 58 3.5 Conclusion 65 v vi Contents Part II Consumer Behaviour and Prices 4 The Economic Value of Wine Names That Reference Place in the US Market: Analysis of ’Champagne’ and Sparkling Wine 73 Hyunok Lee and Daniel A. Sumner 4.1 Introduction 73 4.2 Previous econometric research on wine place names 75 4.3 Data source and data description 76 4.4 Econometric estimation of the hedonic price equations with market data 79 4.5 Econometric results and interpretations of the price equation for sparkling wine sold in the United States 81 4.6 Conclusion 85 5 The Price of Wine: Does the Bottle Size Matter? 88 Jean-François Outreville 5.1 Introduction 88 5.2 Does the bottle matter? 89 5.3 A measure of the relative scaled price index 92 5.4 The market price of large bottles at auctions 96 5.5 Conclusion and suggestions for further research 97 6 Wine Judging and Tasting 102 Matteo M. Galizzi 6.1 Introduction 102 6.2 Literature review 104 6.3 The wine judging system and expert panels in Italy: a price formation model? 107 6.4 The three main professional guides in Italy, and their data on wines and awards 110 6.5 Empirical analysis and results: the awards by the professional guides in 2008 112 6.6 Conclusion 124 7 Willingness to Pay for Appellation of Origin: Results of an Experiment with Pinot Noir Wines in France and Germany 129 Pascale Bazoche, Pierre Combris, Eric Giraud-Héraud and Jean-Baptiste Traversac 7.1 Introduction 129 7.2 Willingness to Pay (WTP) for Protected Designation of Origin and other wine characteristics 130 7.3 Experiment design and method 132 7.4 Data and results 134 7.5 Conclusion 142 Contents vii Part III Wine Ranking and Financial Issues 8 How Best to Rank Wines: Majority Judgement 149 Michel Balinski and Rida Laraki 8.1 Introduction 149 8.2 Traditional amalgamation schemes and the ‘Judgement of Paris’ 150 8.3 Why the traditional amalgamation schemes fail 155 8.4 Majority judgement 160 8.5 Majority judgement in use 165 8.6 Conclusion 171 9 Wine as an Alternative Asset Class 173 Philippe Masset and Jean-Philippe Weisskopf 9.1 Introduction 173 9.2 Investment opportunities on the market for fine wine 175 9.3 Academic literature 188 9.4 Empirical study of the market for fine wine 191 9.5 The case of the US wine market 191 9.6 The case of the Swiss wine market 192 9.7 Conclusion 195 10 Financial Reaction to the Business Cycle in Periods of Difficulties: The Case of French Wine Companies 200 Paul Amadieu, Jean-Pierre Couderc and Jean-Laurent Viviani 10.1 Introduction 200 10.2 Theoretical foundations of hypotheses 202 10.3 Data, variables and method 205 10.4 Results 211 10.5 Conclusion 221 Part IV Intermediary Markets and Strategic Decisions 11 The Technical Efficiency of Wine Grape Growers in the Murray–Darling Basin in Australia 231 Tim Coelli and Orion Sanders 11.1 Introduction 231 11.2 Sample