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.
Olivier Gergaud and Victor Ginsburgh
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