Monday, March 7, 2011

The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices

Abstract: We examine the value of terroir, which refers to the special characteristics of a place that impart unique qualities to the wine produced. We do this by conducting a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attributes, such as slope, aspect, elevation, and soil types, or designated appellations are more important determinants of price. We find that prices are strongly determined by sub-AVA appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, although the reality of terroir – as proxied for by locational attributes – is not significant"

by Robin Cross, Andrew J. Plantinga, Robert N. Stavins
National Bureau of Economic Research (NBER)
NBER Working Paper No. 16762; Issued in February 2011
via REPEC Research Papers in Economics and FEEM Fondazione Eni Enrico Mattei

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