If a vineyard hires a “famous” winemaker, does it have an impact on the price of their wines? The answer is, not surprisingly, yes, according to a recent study. The effect is immediate and possibly double. Immediately when a famous winemaker is hired (or it is announced) the price goes up, long before the winemaker star has had the possibility to have any influence on the quality of the wine – in economic terms this is called the symbolic effect. Later, when the new winemaker has had an impact on the wine there can also be a “substantive effect” if the quality goes up too. Peter Roberts and Christopher Rider from Emory University and Mukti Khaire of Harvard University have recently written a paper on the subject that will be presented at the Association of Wine Economists congress: “Basking in Reflected Glory: Symbolic and Substantive Implications of Winemaker Mobility”.
The results show that the “symbolic” effect, i.e. the immediate effect before any possible change in quality, is an increase in price of 3%. More surprising, perhaps, is that the finding that there is (even later) no change in quality, as measured in WineSpectator ratings. In other words, hiring a famous winemaker makes the wine go up in price but it makes no difference for the quality of the wine… Read more… wine-econ.org
