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Faculty Research Working Paper Series
Robert N. Stavins
Albert Pratt Professor of Business and Government
phone: (617)495-1820
The Value of Terroir: Hedonic Estimation of Vineyard Sales Prices
Cross, Robin, Andrew J. Plantinga, and Robert N. Stavins. "The Value of Terroir: Hedonic Estimation of Vineyard Sales Prices." HKS Faculty Research Working Paper Series and NBER Working Papers (RWP11-009 and 16762), January 2011.
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.
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