American Economic Review: Vol. 101 No. 3 (May 2011)


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What Is the Value of Terroir?

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Cross, Robin, Andrew J. Plantinga, and Robert N. Stavins. 2011. "What Is the Value of Terroir?" American Economic Review, 101(3): 152-56.

DOI: 10.1257/aer.101.3.152


We examine the value of terroir—the set of special characteristics of a location that impart unique qualities to the wine produced. We conduct 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 appellation designations, but not by specific site attributes. These results indicate that the concept of terroir matters economically, but that the reality of terroir—as proxied by locational attributes—is not significant.

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Cross, Robin (OR State U)
Plantinga, Andrew J. (OR State U)
Stavins, Robert N. (Harvard U)

JEL Classifications

L11: Production, Pricing, and Market Structure; Size Distribution of Firms
L66: Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
Q13: Agricultural Markets and Marketing; Cooperatives; Agribusiness

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