Wine Investment

Topics: Bordeaux wine, Wine, Bordeaux Pages: 26 (7950 words) Published: March 31, 2013
Editor Victor Ginsburgh

Héla Hadj Ali Sébastien Lecocq Michael Visser

April 2007

The impact of gurus: Parker grades and en primeur wine prices H´la Hadj Ali† S´bastien Lecocq‡ Michael Visser§ e , e , September 2005 ∗

Abstract The purpose of this paper is to measure the impact of Robert Parker’s oenological grades on Bordeaux wine prices. We study their impact on the so-called en primeur wine prices, i.e., the prices determined by the chˆteau owners when the wines are still extremely young. The Parker a grades are usually published in the spring of each year, before the wine prices are established. However, the wine grades attributed in 2003 have been published much later, in the autumn, after the determination of the prices. This unusual reversal is exploited to estimate a Parker effect. We find that, on average, the effect is equal to 2.80 euros per bottle of wine. We also estimate grade-specific effects, and use these estimates to predict what the prices would have been had Parker attended the spring tasting in 2003.

Keywords: Expert opinion, natural experiment, treatment effect, Bordeaux wine price. JEL codes: C21, D89, L15. ∗ We

are grateful to Alan Duncan, Fabrice Etil´, Victor Ginsburgh, Sylvie Lambert, and participants at the VDQS e

conference (Dijon, 2004), the RES conference (Nottingham, 2005), the JMA meeting (Hammamet, 2005), and the EEA congress (Amsterdam, 2005), for their helpful comments and suggestions. † INRA,

Chemin de Borde Rouge, Auzeville, BP 27, 31326 Castanet Tolosan, France.



65 boulevard de Brandebourg, 94205 Ivry, France. Email: 48 boulevard Jourdan, 75014 Paris, France. Email:




The judgment of experts and gurus matters in many types of markets. For instance, in art markets for books, music, and movies, opinion leaders have an important effect on consumer decisions via their rankings in all sorts of guides and competitions (see Ginsburgh (2003)). Similarly, in auctions of paintings, art experts influence sale prices via the publication of their pre-sale estimates in auction catalogues (see Bauwens and Ginsburgh (2000)). Other markets where expert opinion leaders are very active and influential are sports betting markets (see Avery and Chevalier (1999)), financial stock markets (see Shleifer (1986)), the market for restaurants (see Chossat and Gergaud (2003)), etc... Given the importance of experts and gurus, it seems of interest to be able to precisely measure their impact on market outcomes. In this paper we consider a particularly well known expert, the American wine critic Robert Parker, and study the effect of his opinion on Bordeaux wine prices. More specifically, we analyze the effect of Parker’s opinion on the so-called en primeur wine prices. These are prices set by Bordeaux chˆteaux owners just 6 or 7 months after the grape harvest, i.e., a when the wines are still very young and not yet bottled.1 Robert Parker is widely regarded as the most influential wine expert in the world.2 It is often claimed by those working in the wine industry that his wine reports and oenological grades, published in the bimonthly journal The Wine Advocate and in his wine books, exercise much power over wine prices: good grades may cause prices to rocket sky-high, while, inversely, very bad grades 1 Bordeaux

en primeur wines should not be confounded with Beaujolais primeur wines. The latter are specially

produced and bottled for immediate consumption (starting in November, just two or three months after the harvest), while the former first go through the usual vinification process (a period lasting between 1 one and two years), in the cellars of the chˆteaux, before being bottled and put on the market. a 2 One...
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