Wine Quality and Varietal, Regional and Winery Reputations:Hedonic Prices for Australia and New Zealand

We estimate hedonic price functions for premium wine from Australia and New Zealand, differentiating implicit prices for sensory quality ratings, wine varieties, and regional as well as winery brand reputations over the vintages 1992 to 2000. For Australia, the results suggest regional reputations in general are becoming increasingly significant through time, indicating intensifying regional quality differentiation. In particular, some specific cool-climate regions are becoming increasingly preferred over other regions. Price premia based on brand reputation also are shown to be significant. For New Zealand also, regional quality differentiation is significant, although less so than in Australia. In each country, price premia associated with both James Halliday’s and Winestate magazine’s sensory quality ratings, and with Halliday’s winery ratings and classic wine designations, are highly significant.