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Price Effects of Establishing a New Sub-AVA within Oregon's Willamette Valley AVA*

  • Omer Gokcekus (a1) and Clare M. Finnegan (a2)

Abstract

The creation of new sub-divisions within Oregon's Willamette Valley American Viticultural Area (AVA) may indicate a desire on the part of well-established wineries to “split” or separate their social groupings from those with lesser qualifications. Once their social clusters have been differentiated, we theorize that these wineries would be able to capitalize on their newly developed distinctiveness and collect larger regional reputation premiums. Based on 2,221 Wine Spectator–rated pinot noirs from between 1984 and 2008, regression analyses demonstrate that regional reputation premiums have significantly increased with the creation of sub-AVAs and that the price-quality ratio gap between sub-AVAs and the rest of Willamette has widened. (JEL Classifications: D22, Q12, L14)

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Corresponding author

e-mail: Omer.Gokcekus@shu.edu (corresponding author).

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We would like to thank Karl Storchmann for providing the wine price and quality data and Huseyin Cakal, Joe Czerwinski, John Haeger, Neal Hulkower, Edward Tower, and attendees at the Seventh Annual American Association of Wine Economists (AAWE) Conference in Stellenbosch, South Africa, for their helpful comments and suggestions.

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References

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Price Effects of Establishing a New Sub-AVA within Oregon's Willamette Valley AVA*

  • Omer Gokcekus (a1) and Clare M. Finnegan (a2)

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