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The Value of Terroir: Hedonic Estimation of Vineyard Sale Prices*

Published online by Cambridge University Press:  08 June 2012

Robin Cross ,
Andrew J. Plantinga  and
Robert N. Stavins
Robin Cross
Affiliation:
Department of Agricultural and Resource Economics, Oregon State University, Corvallis, OR 97331. e-mail:robin.cross@oregonstate.edu
Andrew J. Plantinga
Affiliation:
Department of Agricultural and Resource Economics, Oregon State University, Corvallis, OR 97331. e-mail: plantinga@oregonstate.edu
Robert N. Stavins
Affiliation:
John F. Kennedy School of Government, Harvard University, 79 John F. Kennedy Street, Cambridge, Massachusetts 02138, National Bureau of Economic Research and Resources for the Future, e-mail:robert_stavins@harvard.edu
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Abstract

We examine the value of terroir, which refers to the special characteristics of a place that impart unique qualities to the wine produced. We do this by conducting a hedonic analysis of vineyard sales in the Willamette Valley of Oregon to ascertain whether site attributes, such as slope, aspect, elevation, and soil types, or designated appellations are more important determinants of price. We find that prices are strongly determined by sub-AVA appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, although the reality of terroir – as proxied for by locational attributes – is not significant. (JEL Classification: C2, Q11)

Type
Articles
Information
Journal of Wine Economics , Volume 6 , Issue 1 , 2011 , pp. 1 - 14
Copyright
Copyright © American Association of Wine Economists 2011

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