IDEAS home Printed from https://ideas.repec.org/p/ags/feemdp/101289.html
   My bibliography  Save this paper

The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices

Author

Listed:
  • Cross, Robin M.
  • Plantinga, Andrew J.
  • Stavins, Robert N.

Abstract

We examine the value of terroir, which refers to the special characteristics of a place that impart unique qualities to the wine produced. We do this by conducting 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 sub-AVA appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, although the reality of terroir – as proxied for by locational attributes – is not significant.

Suggested Citation

  • Cross, Robin M. & Plantinga, Andrew J. & Stavins, Robert N., 2011. "The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices," Sustainable Development Papers 101289, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemdp:101289
    DOI: 10.22004/ag.econ.101289
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/101289/files/NDL2011-012.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.101289?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    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. 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.
    6. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koen Deconinck & Martijn Huysmans & Jo Swinnen, 2015. "The political economy of geographical indications," Working Papers of LICOS - Centre for Institutions and Economic Performance 509755, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    2. Kym Anderson & Glyn Wittwer, 2019. "Asia’s Evolving Role in Global Wine Markets," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 14, pages 347-377, World Scientific Publishing Co. Pte. Ltd..
    3. Pecchioli, Bruno & Moroz, David, 2023. "Do geographical appellations provide useful quality signals? The case of Scotch single malt whiskies," Economic Modelling, Elsevier, vol. 124(C).
    4. Gokcekus, Omer & Finnegan, Clare M., 2014. "Classification and Re-Classification: Oregon’s Willamette Valley AVA and its New Sub-AVAs," Working Papers 164642, American Association of Wine Economists.
    5. Jeremy Galbreath, 2019. "Drivers of Green Innovations: The Impact of Export Intensity, Women Leaders, and Absorptive Capacity," Journal of Business Ethics, Springer, vol. 158(1), pages 47-61, August.
    6. Ginsburgh, Victor & Monzak, Muriel & Monzak, Andras, 2013. "Red Wines of Médoc: What is Wine Tasting Worth?," Journal of Wine Economics, Cambridge University Press, vol. 8(2), pages 159-188, November.
    7. Jeremy Galbreath & David Charles & Des Klass, 2014. "Knowledge and the Climate Change Issue: An Exploratory Study of Cluster and Extra-Cluster Effects," Journal of Business Ethics, Springer, vol. 125(1), pages 11-25, November.
    8. Robert N. Stavins, 2017. "The Evolution Of Environmental Economics: A View From The Inside," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(02), pages 251-274, June.
    9. Aaron J. Staples & Trey Malone & J. Robert Sirrine, 2021. "Hopping on the localness craze: What brewers want from state‐grown hops," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 463-473, March.
    10. Kym Anderson, 2019. "Is Georgia the Next “New” Wine-Exporting Country?," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 13, pages 311-345, World Scientific Publishing Co. Pte. Ltd..
    11. Dachary-Bernard, Jeanne & Rambonilaza, Tina & Lemarié-Boutry, Marie, 2014. "The response of land markets to flood protection and flood experience: a hedonic price modeling on the Gironde estuary (France)," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 169761, Agricultural Economics Society.
    12. Giraud, Georges, 2014. "The Effect of Terroir on Wine Business Model in Burgundy: To Make Wine or to Sell Harvest?," 2014 International European Forum, February 17-21, 2014, Innsbruck-Igls, Austria 199067, International European Forum on System Dynamics and Innovation in Food Networks.
    13. Kym Anderson, 2012. "Rural Development in Georgia: What Role for Wine Export Growth?," Wine Economics Research Centre Working Papers 2012-01, University of Adelaide, Wine Economics Research Centre.
    14. Svetlana Ignjatijević & Jelena Vapa Tankosić & Nemanja Lekić & Duško Petrović & Sandra Brkanlić & Bojan Vapa & Vladimir Tomašević & Nikola Puvača & Radivoj Prodanović & Irena Milojević, 2022. "Agro-Environmental Practices and Business Performance in the Wine Sector," Agriculture, MDPI, vol. 12(2), pages 1-21, February.
    15. Fedoseeva, Svetlana, 2020. "(Dynamic) willingness to pay and e-commerce: Insights from sparkling wine sector in Russia," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    16. Stefano Castriota & Paolo Frumento & Francesco Suppressa, 2024. "Identifying the collective reputation premium: a spatial discontinuity approach," Discussion Papers 2024/310, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Carlo Altomonte & Italo Colantone & Enrico Pennings, 2016. "Heterogeneous Firms and Asymmetric Product Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 64(4), pages 835-874, December.
    3. Ay, Jean-Sauveur & Le Gallo, Julie, 2021. "The Signaling Values of Nested Wine Names," Working Papers 321851, American Association of Wine Economists.
    4. Christopher R. Gustafson & Travis J. Lybbert & Daniel A. Sumner, 2016. "Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 91-103, January.
    5. Catherine Haeck & Giulia Meloni & Johan Swinnen, 2019. "The Value of Terroir: A Historical Analysis of the Bordeaux and Champagne Geographical Indications," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(4), pages 598-619, December.
    6. repec:lic:licosd:40818 is not listed on IDEAS
    7. Swinnen, J. & Meloni, G. & Haeck, C., 2018. "What is the Value of Terroir? Historical Evidence from Champagne and Bordeaux," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277221, International Association of Agricultural Economists.
    8. Jean‐Sauveur Ay, 2021. "The Informational Content of Geographical Indications," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 523-542, March.
    9. Meloni, Giulia & Swinnen, Johan, 2018. "Trade and terroir. The political economy of the world’s first geographical indications," Food Policy, Elsevier, vol. 81(C), pages 1-20.
    10. Gergaud, Olivier & Plantinga, Andrew J. & Ringeval-Deluze, Aurelie, 2015. "Anchoring and Property Prices: The Influence of Echelle Des Crus Ratings on Land Sales in the Champagne Region of France," Working Papers 231136, American Association of Wine Economists.
    11. Mérel, Pierre & Ortiz-Bobea, Ariel & Paroissien, Emmanuel, 2021. "How big is the “lemons” problem? Historical evidence from French wines," European Economic Review, Elsevier, vol. 138(C).
    12. Pecchioli, Bruno & Moroz, David, 2023. "Do geographical appellations provide useful quality signals? The case of Scotch single malt whiskies," Economic Modelling, Elsevier, vol. 124(C).
    13. Koen Deconinck & Martijn Huysmans & Jo Swinnen, 2015. "The political economy of geographical indications," Working Papers of Department of Economics, Leuven 509755, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    14. Fares, M'hand & Orozco, Luis, 2014. "Tournament Mechanism in Wine-Grape Contracts: Evidence from a French Wine Cooperative," Journal of Wine Economics, Cambridge University Press, vol. 9(3), pages 320-345, December.
    15. Gergaud, Olivier & Plantinga, Andrew J. & Ringeval-Deluze, Aurelie, 2017. "Anchored in the past: Persistent price effects of obsolete vineyard ratings in France," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 39-51.
    16. Gokcekus, Omer & Finnegan, Clare M., 2014. "Classification and Re-Classification: Oregon’s Willamette Valley AVA and its New Sub-AVAs," Working Papers 164642, American Association of Wine Economists.
    17. Vincent Hoang & Takao Iida & Shigeru Matsumoto & Natsuki Watanabe & Clevo Wilson, 2016. "Consumer’s comparison between local and imported organic products: a hedonic analysis of the Japanese table wine market," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(3), pages 405-415, December.
    18. Kym Anderson & Vicente Pinilla, 2022. "Wine's belated globalization, 1845–2025," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(2), pages 742-765, June.
    19. Loïc Henry, 2023. "Adapting the designated area of geographical indications to climate change," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(4), pages 1088-1115, August.
    20. Fabien Candau & Florent Deisting & Julie Schlick, 2017. "How Income and Crowding Effects Influence the World Market for French Wines," The World Economy, Wiley Blackwell, vol. 40(5), pages 963-977, May.
    21. Kym Anderson, 2019. "Evolving Varietal and Quality Distinctiveness of Australia’s Wine Regions," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 24, pages 599-628, World Scientific Publishing Co. Pte. Ltd..

    More about this item

    Keywords

    Agricultural and Food Policy;

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:feemdp:101289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.