Hedonic price indexes and the qualities of wines

Abstract

This paper provides a critique of recent attempts to use hedonic price techniques for understanding market prices of wines. It suggests that such attempts are flawed for four main reasons: difficulties in identifying the most appropriate variables to use; uncertainty over the aims of such methods; problems in the definitions of wine quality; and internal inconsistencies. Much further research is required on consumer behaviour with respect to wine, before it will be possible to comment with any certainty about the factors influencing people's perceptions of wine quality and their effects on price.