Skip to main content
    • Aa
    • Aa

The Value of Expert Opinion in the Pricing of Bordeaux Wine Futures*

  • Robert H. Ashton (a1)

The value of expert opinion for establishing prices in the Bordeaux futures market is analyzed. The expert opinions examined are the wine quality ratings provided by two of the world's foremost wine experts, Robert Parker and Jancis Robinson, for more than 1,700 red Bordeaux wines over the period 2004–2012. The results show that the experts' ratings have both a statistically and practically significant impact on prices after controlling for the effects of other known determinants of price. Thus, expert opinion has significant value in this setting. The results further show that although Parker's impact on prices is significantly greater than Robinson's, combining the quality ratings of both experts has a significantly greater impact than Parker's ratings alone. As hypothesized, the strength of the results differs for wines produced in different regions of Bordeaux because of differences in the availability of other quality-related information. All results are robust to several alternative sample specifications and other research design choices. (JEL Classifications: C52, G13, L11, L15, M21)

Hide All

I am indebted to Alison Ashton for comments on an earlier version, to Bill Mayew for advice on econometric issues, and to Huihao Yan for excellent research assistance. I am especially grateful for the suggestions of an anonymous reviewer that helped me improve the paper significantly.

Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

A. Abadie (2005). Semiparametric difference-in-differences estimators. Review of Economic Studies, 72(1), 119.

F. Allen (1984). Reputation and product quality. Rand Journal of Economics, 15(3), 311327.

O. Ashenfelter (2008). Predicting the quality and prices of Bordeaux wine. Economic Journal, 118(529), F174F184.

R.H. Ashton (2011). Improving experts’ wine quality judgments: Two heads are better than one. Journal of Wine Economics, 6(2), 160178.

R.H. Ashton (2012). Reliability and consensus of experienced wine judges: Expertise within and between? Journal of Wine Economics, 7(1), 7087.

J.-M. Cardebat , J.-M. Figuet , and E. Paroissien (2014). Expert opinion and Bordeaux wine prices: An attempt to correct biases in subjective judgments. Journal of Wine Economics, 9(3), 282303.

J.-M. Cardebat , and E. Paroissien (2015). Standardizing expert wine scores: An application for Bordeaux en primeur . Journal of Wine Economics, 10(3), 329348.

E. Dimson , P.L. Rousseau , and C. Spaenjers (2015). The price of wine. Journal of Financial Economics, 118(2), 431449.

P. Dubois , and C. Nauges (2010). Identifying the effect of unobserved quality and expert reviews in the pricing of experience goods: Empirical application on Bordeaux wine. International Journal of Industrial Organization, 28(3), 205212.

C. Hay (2007). Globalisation and the institutional re-embedding of markets: The political economy of price formation in the Bordeaux en primeur market. New Political Economy, 12(2), 185209.

C. Hay (2010). The political economy of price and status formation in the Bordeaux en primeur market: The role of wine critics as rating agencies. Socio-Economic Review, 8(4), 685707.

J. Hilger , G. Rafert , and S. Villas-Boas (2011). Expert opinion and the demand for experience goods: An experimental approach in the retail wine market. Review of Economics and Statistics, 93(4), 12891296.

G.V. Jones , and K.-H. Storchmann (2001). Wine market prices and investment under uncertainty: An econometric model for Bordeaux Crus Classés. Agricultural Economics, 26(2), 115133.

K.J. Lancaster (1966). A new approach to consumer theory. Journal of Political Economy, 74(2), 132157.

P. Mahenc , and V. Meunier (2003). Forward markets and signals of quality. Rand Journal of Economics, 34(3), 478494.

D. Malter (2014). On the causality and cause of returns to organizational status: Evidence from the grands crus classés of the Médoc. Administrative Science Quarterly, 59, 271300.

P. Nelson (1970). Information and consumer behavior. Journal of Political Economy, 78(2), 311329.

P. Nelson (1974). Advertising as information. Journal of Political Economy, 82(4), 729754.

M.H. Riordan (1986). Monopolistic competition with experience goods. Quarterly Journal of Economics, 101(2), 265280.

S. Rosen (1974). Hedonic prices and implicit markets: Product differentiation in pure competition. Journal of Political Economy, 82(1), 3455.

H. Schnabel , and K. Storchmann (2010). Prices as quality signals: Evidence from the wine market. Journal of Agricultural & Food Industrial Organization, 8(1), 121.

J. Shanteau (1987). Psychological characteristics of expert decision makers. In J.L. Mumpower , L.D. Phillips , O. Renn , and V.R.R. Uppuluri (Eds.), Expert Judgment and Expert Systems. Berlin: Springer-Verlag, 289304.

J. Shanteau (1992). The psychology of experts: An alternative view. In G. Wright , and F. Bolger (Eds.), Expertise and Decision Support. New York: Plenum, 1123.

C. Shapiro (1983). Premiums for high quality products as returns to reputations. Quarterly Journal of Economics, 98(4), 659679.

Q.H. Vuong (1989). Likelihood ratio tests for model selection and non-nested hypotheses. Econometrica, 57(2), 307333.

W. Zhao (2008). Social categories, classification systems, and determinants of wine price in the California and French wine industries. Sociological Perspectives, 51(1), 163199.

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Wine Economics
  • ISSN: 1931-4361
  • EISSN: 1931-437X
  • URL: /core/journals/journal-of-wine-economics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *



Altmetric attention score

Full text views

Total number of HTML views: 6
Total number of PDF views: 77 *
Loading metrics...

Abstract views

Total abstract views: 275 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 25th September 2017. This data will be updated every 24 hours.