Hostname: page-component-cd9895bd7-lnqnp Total loading time: 0 Render date: 2024-12-29T07:40:05.187Z Has data issue: false hasContentIssue false
  • English
  • Français

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).
Get access Rights & Permissions [Opens in a new window]

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 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

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.

References

Ashenfelter, O., and Storchmann, K. (2010). Using hedonic models of solar radiation and weather to assess the economic effect of climate change: The case of Mosel Valley vineyards. Review of Economics and Statistics, 92(2), 333–349.Google Scholar
Bicknell, K., and MacDonald, I. (2012). Regional reputation and expert opinion in the domestic market for New Zealand wine. Journal of Wine Research, 23(2), 172–184.CrossRefGoogle Scholar
BBC News. (2008). France to expand Champagne region. 13 March. Retrieved from http://news.bbc.co.uk/2/hi/europe/7294487.stm.Google Scholar
Cross, R.; Plantinga, A. J.; and Stavins, R. N. (2011). The value of terroir: Hedonic estimation of vineyard sale prices. Journal of Wine Economics, 6(1), 1–14.Google Scholar
Douglas, M. (1986). How institutions think. Syracuse, NY: Syracuse University Press.Google Scholar
Gergaud, O., and Ginsburgh, V. (2010). Natural endowments, production technologies and the quality of wines in Bordeaux. Does terroir matter? Journal of Wine Economics, 5(1), 3–21.Google Scholar
Gokcekus, O., and Finnegan, C. (2013). Did the Great Recession change the regional reputation premium for wine in the U.S.? Wine Economics and Policy 2(1), 27–32.Google Scholar
Gokcekus, O., and Finnegan, C. (2014). Classification and re-classification: Oregon's Willamette Valley AVA and its new sub-AVAs. American Association of Wine Economists, AAWE Working Paper No. 151.Google Scholar
Johnson, R., and Bruwer, J. (2007). Regional brand image and perceived wine quality: The consumer perspective. International Journal of Wine Business Research, 19(4), 276–297.Google Scholar
Landon, S., and Smith, C. E. (1997). The use of quality and reputation indicators by consumers: The case of Bordeaux wines. Journal of Consumer Policy, 20(3), 289–323.Google Scholar
Lecocq, S., and Visser, M. (2006). What determines wine prices? Objective vs. sensory characteristics. Journal of Wine Economics, 1(1), 42–56.CrossRefGoogle Scholar
MacNeil, K. (2001). The Wine Bible. New York, NY: Workman Publishing Company.Google Scholar
Zeruvabel, E. (1996). Lumping and splitting: Notes on social classification. Sociological Forum, 11(3), 421–433.Google Scholar
Zhao, W. (2005). Understanding classifications: Empirical evidence from the American and French wine industries. Poetics, 33(3/4), 179–200.Google Scholar