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Price Effects of Establishing a New Sub-AVA within Oregon's Willamette Valley AVA*

Published online by Cambridge University Press:  10 July 2017

Omer Gokcekus  and
Clare M. Finnegan
Omer Gokcekus*
Affiliation:
School of Diplomacy and International Relations, Seton Hall University, South Orange, NJ 07079
Clare M. Finnegan
Affiliation:
School of Diplomacy and International Relations, Seton Hall University, South Orange, NJ 07079; e-mail: finneganclare@msn.com.
*
e-mail: Omer.Gokcekus@shu.edu (corresponding author).
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Abstract

The creation of new sub-divisions within Oregon's Willamette Valley American Viticultural Area (AVA) may indicate a desire on the part of well-established wineries to “split” or separate their social groupings from those with lesser qualifications. Once their social clusters have been differentiated, we theorize that these wineries would be able to capitalize on their newly developed distinctiveness and collect larger regional reputation premiums. Based on 2,221 Wine Spectator–rated pinot noirs from between 1984 and 2008, regression analyses demonstrate that regional reputation premiums have significantly increased with the creation of sub-AVAs and that the price-quality ratio gap between sub-AVAs and the rest of Willamette has widened. (JEL Classifications: D22, Q12, L14)

Keywords

AVAclassificationregional reputation premiumterroirwine
Type
Articles
Information
Journal of Wine Economics , Volume 12 , Issue 4 , November 2017 , pp. 345 - 353
Copyright
Copyright © American Association of Wine Economists 2017 

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Footnotes

*

We would like to thank Karl Storchmann for providing the wine price and quality data and Huseyin Cakal, Joe Czerwinski, John Haeger, Neal Hulkower, Edward Tower, and attendees at the Seventh Annual American Association of Wine Economists (AAWE) Conference in Stellenbosch, South Africa, for their helpful comments and suggestions.

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