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Bordeaux Wine as a Financial Investment

Author

Listed:
  • Sanning, Lee W.
  • Shaffer, Sherrill
  • Sharratt, Jo Marie

Abstract

For repeat transactions data from monthly auction hammer prices, we analyze the level and quality of Bordeaux wine returns using the Fama-French Three-Factor Model and the Capital Asset Pricing Model. Returns average up to 0.75% per month above those predicted by these models. Further, investment grade wines benefit from low exposure to market risk factors, thus offering a valuable dimension of portfolio diversification. These findings are consistent with simple theoretical considerations and support a documented growing interest in wine investments (JEL Classification: G11.G12).

Suggested Citation

  • Sanning, Lee W. & Shaffer, Sherrill & Sharratt, Jo Marie, 2008. "Bordeaux Wine as a Financial Investment," Journal of Wine Economics, Cambridge University Press, vol. 3(1), pages 51-71, April.
    • Handle: RePEc:cup:jwecon:v:3:y:2008:i:01:p:51-71_00
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    More about this item

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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