No abstract

Data on 14,284 bottles of wine from six regions or countries, used to estimate a hedonic price model that causally relates wine prices to individual quality and country brands.A positive and statistically significant relationship between price and individual quality is confirmed, and it is found that the premium or penalty attaching to wines because of their associated country brand has held steady over time, as has price-quality elasticity.Individual quality being equal, Chilean and Argentine wines continue to suffer a penalty of over 50% relative to Californian wines. Another finding is that the country brand problem will not be solved until countries that are newcomers to the industry, such as Chile and Argentina, succeed in producing a critical mass of wines of outstanding quality, for this is the factor that will ultimately determine whether their producers benefit from a good collective image or reputation.

Using quarterly data on the Chilean economy from 1986 to 2009, this article looks at the effect of gradual implementation of an inflation-targeting regime on exchange rate passthrough to prices. Initially, the introduction of inflation-targeting contributes to substantial reductions in the pass-through coefficient. However, in the second phase of implementation, once the monetary authority extends the policy horizon and introduces greater flexibility into the exchange rate system, the pass-through coefficient rises sharply. The findings of this study show that exchange rate pass-through to prices, in addition to being sensitive to the inflationary environment, is closely tied to the rules of the game that shape the monetary policy framework.

Purpose The purpose of this paper is to analyze whether or not the reputation of a region/country in the international wine market depends on a region/country’s efforts to specialize in a specific grape variety. Design/methodology/approach Data on 19,959 bottles of wine corresponding to six vintages across ten wine producing regions worldwide are used to estimate a hedonic price model that measures consumer valuations of the different wine attributes. Findings The results of this study show that although variety specialization has successfully underpinned the reputation of some New World regions, such as the Napa Valley (with its Cabernet Sauvignon) or Oregon (with its Pinot Noir); in others, such as Australia (with its Shiraz), this has not been successful. Practical implications Over the last ten years, the exponential growth of Australian bulk wine exports has seriously harmed the reputation of Australian wine. With respect to the Napa Valley wines, price discount received by Australian wines increases between the 1997 and 2007 vintage from 33 to 61 percent. Thus, in order to successfully build a collective reputation of an entrant (New World) country, an institutional framework that mediates differences of interest between the large and small vineyards and, above all, that regulates the free-rider problem in the wine market is required. Originality/value This paper empirically illustrates how cooperative (and non-cooperative) behavior between firms can help to build (and to destroy) collective reputation of wines that come from the same region or country.

No abstract