We identify and examine the performance of frontier investments from 2002 to 2017. Using fine wine as a setting, we find that the trade frequency and value of frontier investments in the form of Alpine wines have increased in recent years, leading to a rise in their prices above inflation rates. We further document that this frontier investment has been favorable in terms of risk-adjusted returns and volatility for investors. We also observe that the inclusion of frontier wines in a financial portfolio is favorable for investors, both in terms of returns and diversification benefits, due to low correlation coefficients. The identification and investment into frontier assets appears beneficial for investors looking for new opportunities. (JEL Classifications: C60, G11, Q11)

This paper examines the ratings of 12 influential wine critics on the Bordeaux en primeur market over the vintages 2003–2012. We hypothesize that wine experts differ significantly in their rating approach and influence on prices. We find that European critics are less transparent and in general more severe in their scoring than their American counterparts. Experts also appear to reach a relatively strong consensus on overall wine quality but have more diverse opinions on wines that achieve a surprising level of quality given the vintage, the ranking, or the appellation from which they originate. Our evidence also suggests that Robert Parker and Jean-Marc Quarin are the most influential critics, as a 10% surprise in their scores leads to a price increase of around 7%. We further find that their impact is higher for appellations and estates that are not covered by the official 1855 classification and for the best vintages. (JEL Classifications: C60, G11, Q11)

This paper explores empirically the causes of extreme fluctuations in commodity prices from January 1990 to June 2010 and seeks to identify the relative contribution of advanced and emerging market economies to the changes in commodity prices. Our assumption is that analyzing two very distinct goods—crude oil and fine wine—helps to identify common determinants of commodity prices. We find that the growth rate of global aggregate demand is the key macroeconomic determinant of the fluctuations in both crude oil and fine wine prices over the sample period. While advanced economies account for more than half of global consumption, emerging market and developing economies make up the bulk of the incremental change in demand, thereby having a greater weight in commodity price formation. The coefficient of emerging market industrial output growth is about three times as high as that of advanced economies in oil price regressions and almost five times as powerful in fine wine price regressions. The results also show that the shift in the composition of aggregate commodity demand is a recent phenomenon. (JEL Classifications: Q11, Q39, Q41, Q43)