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Natural Endowments, Production Technologies and the Quality of Wines in Bordeaux. Does Terroir Matter?*

Published online by Cambridge University Press:  08 June 2012

Olivier Gergaud
University of Reims (Troyes Institute of Technology) and Reims Management School.
Victor Ginsburgh
ECARES, Brussels and CORE, Louvain-la-Neuve.


We study whether quality assessments made by wine experts and by consumers (based on prices obtained at auction between 1980 and 1992), can be explained by variables describing endowments (land characteristics, exposures of vineyards) and technologies (from grape varieties and picking, to bottled wines). However, since technological choices are likely to depend on endowments, the effects can only be identified using an instrumental variables approach. We show that technological choices affect quality much more than natural endowments, the effect of which is negligible. (JEL Classification: L66, Q12, Q13, Q16)

Copyright © American Association of Wine Economists 2010

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