The purpose of this paper is to assess the role of expert opinion on the pricing of Bordeaux wines. To this end, we compile an original dataset including (1) retail prices, (2) scores attributed to wines from France, Spain, and the United States by nine experts from 2000 to 2010, and (3) the meteorological conditions under which the grapes were produced. With this dataset, we aim to determine the presence of bias rooted in the subjectivity of the experts. We assume that the expert wine scores have two main components: (1) an objective one that is driven by the fundamentals of wine production (the quality of soil, producers' skills, and climate conditions) and (2) a subjective one that is determined by the individual opinion of the experts. We use control function techniques to compare the respective impacts of these two factors and find that prices are influenced more deeply by the fundamental quality of the wine than they are by the judge's subjectivity. Furthermore, we notice the great impact of "highest ratings" on pricing, which we interpret as a "marketing effect": the most favorable score is likely to be the most publicized, which influences the price of the respective wine. (JEL Classifications: C21, D89, L15)

The aim of this article is to explain Bordeaux wine prices for the 1996-1999 vintages. The hedonic price method is applied to determine the main explanatory factors of price differences. It shows that reputation remains an important determinant of the price. However sensory characteristics have greater explanatory power compared to previous studies. Increasing competition and reductions in information asymmetries on the wine market are two important factors explaining this result.

This paper examines the strong version of the law of one price (LOOP) on the auction market for fine wine. We draw on worldwide auction prices from eight auction houses,1 covering the time period from 2000 to 2012. Employing a hedonic approach, we find significant price premiums in particular in Hong Kong and between auction companies (independent of their locations). The price premiums by far exceed the expected transaction costs, casting doubt on the existence of the strong version of LOOP in the fine wine market. Our results suggest that heterogeneity in buyer preferences may crucially contribute to the observed price dispersion. In particular, although wines suspected of being counterfeits are sold at discounts in Western markets, they fetch price premiums in Hong Kong. (JEL Classifications: Q14, G11)

In this paper we provide a simple and transparent non parametric methodology to express the scores of each wine expert on the same rating scale. We discuss the advantage of this methodology over a linear transformation. The non-paramatric method ensures the comparability of scores among experts and allows for a relevant average calculation of available wine scores. (JEL Classifications: Q13, L15, C14).

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