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What Is the Value of Terroir?

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  • Robin Cross
  • Andrew J. Plantinga
  • Robert N. Stavins

Abstract

We examine the value of terroir--the set of special characteristics of a location that impart unique qualities to the wine produced. We conduct a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attributes--such as slope, aspect, elevation, and soil types—or designated appellations are more important determinants of price. We find that prices are strongly determined by appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, but that the reality of terroir--as proxied by locational attributes--is not significant.

Suggested Citation

  • Robin Cross & Andrew J. Plantinga & Robert N. Stavins, 2011. "What Is the Value of Terroir?," American Economic Review, American Economic Association, vol. 101(3), pages 152-156, May.
    • Handle: RePEc:aea:aecrev:v:101:y:2011:i:3:p:152-56
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    References listed on IDEAS

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    1. Orley Ashenfelter & Karl Storchmann, 2010. "Using Hedonic Models of Solar Radiation and Weather to Assess the Economic Effect of Climate Change: The Case of Mosel Valley Vineyards," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 333-349, May.
    2. Gergaud, Olivier & Ginsburgh, Victor, 2010. "Natural Endowments, Production Technologies and the Quality of Wines in Bordeaux. Does Terroir Matter?," Journal of Wine Economics, Cambridge University Press, vol. 5(1), pages 3-21, April.
    3. Goldstein, Robin & Almenberg, Johan & Dreber, Anna & Emerson, John W. & Herschkowitsch, Alexis & Katz, Jacob, 2008. "Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings," Journal of Wine Economics, Cambridge University Press, vol. 3(1), pages 1-9, April.
    4. Veale, Roberta & Quester, Pascale, 2008. "Consumer Sensory Evaluations of Wine Quality: The Respective Influence of Price and Country of Origin," Journal of Wine Economics, Cambridge University Press, vol. 3(1), pages 10-29, April.
    5. Gergaud, Olivier & Ginsburgh, Victor, 2010. "Natural Endowments, Production Technologies and the Quality of Wines in Bordeaux. Does Terroir Matter?," Journal of Wine Economics, Cambridge University Press, vol. 5(01), pages 3-21, March.
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