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Why Do Distilleries Produce Multiple Ages of Whisky?

Published online by Cambridge University Press:  10 January 2019

Ian B. Page Open the ORCID record for Ian B. Page [Opens in a new window]
Ian B. Page*
Affiliation:
Department of Agricultural and Resource Economics, Symons Hall, University of Maryland, College Park, MD 20742; e-mail: ibpage@umd.edu.
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Abstract

Vintage goods are a unique set of goods that accrue value over time. Unlike producers for many other vintage goods, Scottish distilleries often mature their stocks to different ages and sell a product line that varies significantly in quality. This article develops a theoretical model to examine this maturation strategy and identify market conditions under which a distillery would produce multiple ages of whisky. An empirical analysis of distilleries’ product lines confirms results from the model and highlights the determinants of variety and substitutability between brands. (JEL Classifications: D43, L13, L66)

Keywords

dynamic productionmaturationproduct varietyvintage goodswhiskeywhisky
Type
Articles
Information
Journal of Wine Economics , Volume 14 , Issue 1 , February 2019 , pp. 26 - 47
Copyright
Copyright © American Association of Wine Economists 2019 

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Footnotes

I wish to thank Erik Lichtenberg, the anonymous referee, the journal editor, and the participants at the Annual AAWE Conference in Walla Walla, Washington for their useful comments. All remaining errors are my own.

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