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Robin Garr

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WineAdvisor: Wine and the Dismal Science

by Robin Garr » Wed Jul 05, 2006 12:28 pm

<table border="0" align="right" width="150"><tr><td><img src="http://www.wineloverspage.com/graphics1/jwe.gif" border="1" align="right"></td></tr><tr><td>The Journal of Wine Economics is gray, of course, and dense with facts, figures and formulas. We think serious wine "geeks" will love it.</td></tr></table>Wine and the Dismal Science

Even in the rarefied air that wafts through the groves of academe, economists often lack for respect. Their field of inquiry is jokingly called "the dismal science," and amid the joy of graduation, postgrad economics majors line up wearing dull gray academic hoods identified as "drab."

But lately there've been signs of a heartbeat beneath those monochromatic vestments. From cameo appearances in the gossip columns by the longtime Federal Reserve chief Alan Greenspan to the breakout best-seller list appearance of "rogue economist" Steven D. Levitt's intriguing book <i>Freakonomics</i>, economists are suddenly becoming hot properties.

So it was clearly only a matter of time before someone came up with the idea of viewing the world of wine through an economist's lens: Put your hands together and welcome the <I>Journal of Wine Economics</I>, a thick and admirably scholarly periodical published by the newborn American Association of Wine Economists, a consortium of five economic academics who also happen to be wine geeks in the finest sense of the word.

The wine-economics all-star team of Professors Orley Ashenfelter (Princeton University), Kym Anderson (University of Adelaide and the World Bank), Victor Ginsburgh (Université Libre de Bruxelles), Robert Stavins (Harvard University) and Karl Storchmann (Whitman College in Walla Walla, Wash.), operating as the non-profit American Association of Wine Economists, have just launched the new journal. Vol. 1, No. 1, dated May 2006, includes contributions by a dozen economists including Ashenfelter, an economist who's been known in wine circles for a long time for his sometimes controversial analyses of the wine marketplace.

Make no mistake, the <I>Journal of Wine Economics</i> is a scholarly journal. dense with facts, figures and formulas. Without a strong background in statistics, chances are most non-economist readers will skim the more austerely mathematical bits. But there's a lot to skim, and even casual browsing turns up all manner of interesting nuggets and factoids.

The first edition contains six deep articles, and for dessert, a math-free movie review (Alexander Payne's <i>Sideways</i>, reviewed by Stavins) and book review (George Taber's <I>Judgement of Paris: California vs. France and the Historic 1976 Paris Tasting That Revolutionized Wine</I>, reviewed by Ashenfelter, who compares Taber's analysis with his own study of the Paris tasting).

It opens with an examination of "Interstate Wine Shipments and E-Commerce" by Prof. Daniel L. McFadden of the University of California at Berkeley, which concludes with a free-the-grapes call for the U.S. Federal Trade Commission to deter attacks on interstate commerce by "concentrated economic interests" when such attacks deprive consumers of the benefits of a free and competitive market.

The graphs, tables and formulas start to appear in Princeton Prof. Richard E. Quandt's paper, "Measurement and Inference in Wine Tasting," a lengthy study of the difficulties inherent in ranking evaluations by a group of judges in blind tasting. In "Analysis of a Wine Tasting," Emeritus Prof. Dennis V. Lindley of University College London pursues an in-depth, statistical analysis of the judges' scoring at the famous 1976 California-vs.-France tasting in Paris, and reaches a much more nuanced conclusion than the conventional wisdom that "California won."

In another intriguing if math-dense analysis, colleagues Sébastien Lecocq and Michael Visser of Institut National de la Recherche Agronomique (INRA) in Paris conduct a thorough study of the relative impact of sensory characteristics (judgment of the wine by expert tasters) and objective characteristics (appellation, varietal and related information) on wine market prices. Their perhaps surprising conclusion: "Characteristics that are directly revealed to the consumer upon inspection of the bottle and its label (ranking, vintage and appellation) explain the major part of price differences. Sensory variables to not appear to play an important role."

Rounding out the first issue are two reports on more variables that influence wine pricing: "Early Sales of Bordeaux Grands Crus" by Philippe Mahenc of INRA and Valérie Meunier of the University of Aarhus in Denmark; and "Assessing the Effect of Information on the Reservation Price for Champagne" by Pierre Combris (INRA), Christine Lange (Centre Européen des Sciences du Goût in Dijon) and Sylvie Issanchou (INRA).

If your preferences go more in the direction of light beach reading about wine (and there's no shame in that), or if you'd rather drink wine than read about it, it's not likely that the <I>Journal of Wine Economics</i> is for you. But I spent a surprising amount of time with my copy, even if I did speed-read past the formulas. I think serious wine "geeks" will love this publication, even if we're not economists.

A subscription to the <i>Journal of Wine Economics</i>, which contains no advertising, is included with membership in the American Association of Wine Economists. Individual membership is $39 per year in the U.S., $45 to cover postage for members elsewhere. Institutional membership (incl. libraries) is $100 annually.

For more information about the journal and how to join The American Association of Wine Economists, visit the Association's Website,
http://www.wine-economics.org
Last edited by Robin Garr on Wed Jul 05, 2006 12:50 pm, edited 1 time in total.
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Bob Ross

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Re: WineAdvisor: Wine and the Dismal Science

by Bob Ross » Wed Jul 05, 2006 12:47 pm

Excellent review, Robin -- thanks.
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lewis.pasco

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Re: WineAdvisor: Wine and the Dismal Science

by lewis.pasco » Sun Jul 16, 2006 6:11 am

Hi Robin,

I found this review extremely stimulating. I wonder if the article by the INRA colleagues Lecocq and Visser investigated the function of the crlationship of production quantity to price. I suspect rarity is a huge factor in price determination. I was not surprised at all to see that the label is more significant than the product in "determining" price.

Lewis
Life is too short to drink bad wine.

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