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Macroeconomic Determinants Of Wine Production In The European Union

Author

Listed:
  • Jana Katunar

    (University of Rijeka)

  • Vinko Zaninovic

    (University of Rijeka)

  • Hrvoje Katunar

    (University of Rijeka)

Abstract

This paper focuses on the determinants of wine production in the European wine industry. In the last two decades, the European wine industry has undergone many changes due to the entry of new countries into the world wine market. Although increasing competitiveness became the priority of the European Common Agricultural Policy, wine production and consumption in the EU have decreased in the last two decades, and therefore the aim of this research is to analyse and identify the macroeconomic determinants of wine production, i.e. what factors besides the price influence wine production in selected EU countries and in how they can be controlled. Empirical research was conducted using data for EU member states traditionally engaged in wine production. Panel data on wine production, wine consumption, average wine price, wine imports, wine exports and EU support to the wine sector were collected from secondary sources for 15 wine-producing EU countries and for the period 2009-2018. We estimated the econometric model using pooled OLS, as diagnostic tests indicated that this estimator was the best fit for our data. Our results suggest that domestic demand and domestic (EU) subsidies are the main drivers of wine production. To keep up with New World wine producers, even more emphasis should be placed on promoting the wine drinking culture.

Suggested Citation

  • Jana Katunar & Vinko Zaninovic & Hrvoje Katunar, 2021. "Macroeconomic Determinants Of Wine Production In The European Union," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 30(1), pages 43-55, june.
    • Handle: RePEc:avo:emipdu:v:30:y:2021:i:1:p:43-55
    DOI: 10.17818/EMIP/2021/1.2
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    References listed on IDEAS

    as
    1. Antonio Stasi & Antonio Seccia & Gianluca Nardone, . "Market Power and Price Competition in the Italian Wine Market," Enometrica, Enometrica - Review of the Vineyard Data Quantification Society (VDQS) and the European Association of Wine Economists (EuAWE) - Macerata University, Faculty of Communications.
    2. Outreville, 2015. "The market structure-performance relationship applied to the Canadian wine industry," Applied Economics Letters, Taylor & Francis Journals, vol. 22(18), pages 1486-1492, December.
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    More about this item

    Keywords

    EU wine industry; wine production; wine consumption; wine import; wine export;
    All these keywords.

    JEL classification:

    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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