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The Demand for Expert Opinion: Bordeaux Wine*

Published online by Cambridge University Press:  11 September 2013

Orley Ashenfelter*
Affiliation:
Economics Department, Princeton University, Princeton, NJ 08544-2098
Gregory V. Jones
Affiliation:
Department of Environmental Studies, 101A Taylor Hall, Southern Oregon University, Ashland, OR 97520; e-mail: gjones@sou.edu.
*
(corresponding author) e-mail: c6789@princeton.edu.

Abstract

In this paper, we use unique data from the market for Bordeaux wine to test the hypothesis that consumers are willing to pay for expert opinion because it is accurate. Using proprietary indicators of the quality of the vintage, which are based on both publicly and privately available information, we find that additional publicly available information on the weather improves the expert's predictions of subsequent prices. This establishes that the expert opinions are not efficient, in the sense that they can be easily improved, and that these opinions must be demanded, at least in part, for some purpose other than their accuracy. (JEL Classification: D8, Q13)

Type
Articles
Copyright
Copyright © American Association of Wine Economists 2013 

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Footnotes

*

We are indebted to Victor Ginsburgh and Karl Storchmann for their comments and encouragement and to Professors Pascal Riberau-Gayon and G. Guimberteau for supplying their vintage rating data.

References

Ashenfelter, O. (2014). A Hedonic Approach to Vineyard Site Selection. Presentation to Fifth Annual Meeting of the Vineyard Data Quantification Society. Journal of Wine Economics, forthcoming.Google Scholar
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Di Laurea, T. (1996). Modelli econometrici per ‘l'analisi della domanda e della qualità delle bevande alcoliche. Università degli Studi di Verona, Facoltà di Economia, Working paper.Google Scholar
Di Vittorio, A., and Ginsburgh, V. (1994). Red wines of Medoc vintages from 1949 to 1989 at Christie's auctions, Working paper.Google Scholar
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Wilder, J.M. (1997). An Assessment of Austrian Capital Theory and an Analysis of the Real Rate of Return from 1971 to 1996. (Senior Thesis No. 8464). Princeton University.Google Scholar
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