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Macroeconomic determinants of wine prices

Author

Listed:
  • Linda Jiao

    (Larefi - Laboratoire d'analyse et de recherche en économie et finance internationales - UB - Université de Bordeaux)

Abstract

Purpose The purpose of this paper is to identify the macroeconomic determinants of fine-wine prices and estimate their impacts. Design/methodology/approach The author models the Liv-ex fine-wine price indices with the macroeconomic variables of emerging and developed markets on a monthly basis from 1996 to 2015. Findings The demand from emerging markets plays a key role in fine-wine pricing and, more precisely, in the price fluctuation of prestige Bordeaux wines. Furthermore, the continuous weakening of the US dollar in real terms favors an increase in fine-wine prices. Since 2011, the slowdown in economic growth in emerging markets, followed by the depreciation of national currencies, has negatively affected the luxury wine market. Along with the process of financialization in the fine-wine market, prices have become more volatile. Factors such as money supply, real interest rates and the growth of investment funds have started to show their influence on fine-wine pricing. Originality/value Complementary to the hedonic price modeling, this research can provide an analysis to wine-price modeling and forecasting within the macroeconomic approach.

Suggested Citation

  • Linda Jiao, 2017. "Macroeconomic determinants of wine prices," Post-Print hal-03879803, HAL.
    • Handle: RePEc:hal:journl:hal-03879803
    DOI: 10.1108/ijwbr-09-2016-0032
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    Cited by:

    1. Hachmi Ben Ameur & Eric Le Fur & Julien Pillot, 2023. "The Influence of Economic Policy Uncertainty and Business Cycles on Fine Wine Prices," Computational Economics, Springer;Society for Computational Economics, vol. 62(2), pages 589-608, August.
    2. Potrykus, Marcin, 2023. "Investing in wine, precious metals and G-7 stock markets – A co-occurrence analysis for price bubbles," International Review of Financial Analysis, Elsevier, vol. 87(C).

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