A hedonic price function, relating the price of Australian wine to its attributes, is estimated. Six attribute groups are found to be statistically important in explaining deviations from average wine prices, i.e., quality, cellaring potential, grape variety/style, grape region, grape vintage and producer she. Various interaction terms between these variables and the impact of the year of marketing are also modelled. The consequent marketing implications for producers and consumers are discussed.

This article examines the empirical support for the hypothesized hedonic theoretical relation between the price of wine and its quality. The examination considers over 180 hedonic wine price models developed over 20 years, covering many countries. The research identifies that the relation between the price of wine and its sensory quality rating is a moderate partial correlation of +0.30. This correlation exists despite the lack of information held by consumers about a wine's quality and the inconsistency of expert tasters when evaluating wines. The results identify a moderate price‐quality correlation, which suggests the existence of strategic buying opportunities for better informed consumers. Strategic price setting possibilities may also exist for wine producers given the incomplete quality information held by consumers. The results from the meta‐regression analysis point to the absence of any publication bias, and attribute the observed asymmetry in estimates to study heterogeneity. The analysis suggests the observed heterogeneity is explained by the importance of a wine's reputation, the use of the 100‐point quality rating scale, the analysis of a single wine variety/style, and the employed functional form. The most important implication from the analysis is the relative importance of a wine's reputation over its sensory quality, inferring that producers need to sustain the sensory quality of a wine over time to extract appropriate returns. The reputation of the wine producer is found not to influence the strength of the price‐quality relationship. This finding does not contradict the importance of wine producer reputation in directly influencing prices.

No abstract

Accumulated theoretical and empirical evidence suggests that wine prices depend on quality, reputation and objective characteristics. Unlike previous studies, we recognize that quality and reputation are latent constructs and therefore employ factor analysis and 2SLS techniques to consistently estimate hedonic prices in the presence of attributes measured with error. The application to Australian premium wines points to signi¢cant reputation e¡ects but insigni¢cant quality e¡ects. It is also illustrated that inappropriately using standard OLS procedures can seriously distort the statistical signi¢c-ance of attributes, the implicit marginal attribute prices, and the predictions of`average' prices for a given set of characteristics.

ABSTRACT. Although previous studies have examined adaptive capacity using a range of self-assessment procedures, no objective self-report approaches have been used to identify the dimensions of adaptive capacity and their relative importance. We examine the content, structure, and relative importance of dimensions of adaptive capacity as perceived by rural landholders in an agricultural landscape in South-Eastern Australia. Our findings indicate that the most important dimensions influencing perceived landholder adaptive capacity are related to their management style, particularly their change orientation. Other important dimensions are individual financial capacity, labor availability, and the capacity of communities and local networks to support landholders' management practices. Trust and confidence in government with respect to native vegetation management was not found to be a significant dimension of perceived adaptive capacity. The scale items presented, particularly those with high factor loadings, provide a solid foundation for assessment of adaptive capacity in other study areas, as well as exploration of relationships between the individual dimensions of adaptive capacity and dependent variables such as perceived resilience. Further work is needed to refine the scale items and compare the findings from this case study with those from other contexts and population samples.