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The price of wine

Research output: Contribution to journalArticle

Using historical price records for Bordeaux Premiers Crus, we examine the impact of aging on wine prices and the long-term investment performance of fine wine. In line with the predictions of an illustrative model, young maturing wines from high-quality vintages provide the highest financial returns. Past maturity, famous chateaus deliver growing non-pecuniary benefits to their owners. Using an arithmetic repeat-sales regression over 1900-2012, we estimate a real financial return to wine investment (net of storage costs) of 4.1%, which exceeds bonds, art, and stamps. Returns to wine and equities are positively correlated. Finally, we find evidence of in-sample return predictability. Crown Copyright (C) 2015 Published by Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)431-449
JournalJournal of Financial Economics
Issue number2
StatePublished - Nov 2015
Externally publishedYes

    Research areas

  • Wine prices, Alternative investments, Price indexes, Psychic return, Bubbles
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