The price of wine

Elroy Dimson*, Peter L. Rousseau, Christophe Spaenjers

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

34 Citations (Scopus)

Abstract

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
Volume118
Issue number2
DOIs
Publication statusPublished - Nov 2015
Externally publishedYes

Keywords

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

Cite this

Dimson, E., Rousseau, P. L., & Spaenjers, C. (2015). The price of wine. Journal of Financial Economics, 118(2), 431-449. https://doi.org/10.1016/j.jfineco.2015.08.005