In Vino Veritas, Sort Of

Who and what affects the price of wine? (Photo by Jeff Pachoud/AFP/Getty Images)

This week on Freakonomics Radio’s Marketplace segment, we ask a simple question about a simple product: wine. It’s the quintessential holiday party gift, but which one should you buy?

One would assume that wine, like most other products, follows basic price theory: you get what you pay for. But according to a growing body of wine economists, this is rarely true. Instead, wine prices are based on the expert opinions of a selected few. Host Stephen Dubner investigates whether the experts really know their wine, and to what degree their opinions affect your wallet and palate.

Marketplace Segment

In Vino Veritas, Sort Of

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And what kind of wine will Kai Ryssdal buy for the Marketplace holiday party that he’s hosting this year? Will he listen to a wine expert like Robert Parker, or stoop to following the advice of an economist like Steve Levitt?


Yes!!! Finally, I have been doing something right all along. I really enjoyed this segment as I, too, have frequently pondered this question. One day, I finally gave up and decided to purchase wine based on how "pretty" the label is (as long as it's in the day's set budget). I have to say, this method has never steered me wrong and I was really thrilled when Steven Levitt recommended it!
Thanks Guys!

Willliam Godfrey

Mr. Dubner:

Listened in last night on the drive home from work to Kai R and you.

Enjoyed the segment on wine. Couldn't agree more on the premise and findings. As a former publisher of 'Arizona Wines -from A to Z,' I was often blown away by wine tastings and results by panels and tasters. More often than not, the lesser price wine was the chosen one. And we had some sophisticated and not-so-sophisticated tasters in the group.

I will continue for future interviews on our station, KJZZ-FM, in Phoenix.

William Godfrey, Author
Golf Historian/Wine guru


Bottom line: drink what you like. Best way to do that, DRINK A LOT and figure it out!

Harrison B

Why aren't the NPR segments in the Freakonomics RSS feed?

Keep up the good work!

Ask Your Freakonomics Questions -

[...] thought of the abortion/crime link, or what kind of blackjack player he is, or how he goes about selecting a bottle of wine to bring to a holiday party. We tried this once before, when our publisher wanted to add a Q&A [...]


I highly recommend The Wine Trials book.

Why Is Buying Wine So Difficult? « Aaron Berdofe's Wine and Food Experience

[...] Freakanomics Radio: Take a listen to the podcast.  It’s only about 5min. long.  In it, they talk about the economics of wine, because it is and industry after all, just like everything else.  The question they ask is how do we as consumers know what wine to buy.  We buy wine to enjoy it. So how can we make sure we’ll enjoy the bottle we buy? They reference an article by the Journal of Wine Economics  that states the people enjoyed expensive wines slightly less than they enjoyed cheaper wines.  The reasoning behind this (mine, not theirs) is simple. Buying wine, like buying anything else is a value proposition.  As long as we think we’re getting a deal, we’re more likely to enjoy something.  If we just bought a Picasso to show off to our friends, the experience will be…well, rather fleeting.  Because the general public in America knows next to nothing about wine we look to the experts to tell us what to get.  In the podcast they mention the 100 point rating systems that are common these days, but what they neglect to mention is that these rating systems are rating the wine quality not whether you’ll enjoy it or not.  This is much like a movie critic rates a movie.  Critics are wonderful for these purposes of judging quality of something because there are hard and fast values that they are judging.  Much like a movie of a certain genre needs to contain certain elements (quantitative) and those elements can be graded (qualitative) wines are critiqued in the same way.  For example, all Cabernet Sauvignons will have similar aromas.  There is a range of what a Cab Sauv can smell like.  It smells like Cab Sauv or it doesn’t (quantitative).  Now how prominent that aroma is and the blend of the unique aromas within the range can all vary on a scale (qualitative).  All these ratings tell you is how good of a spot was picked to grow the grapes and the level of craftsmanship of the wine.  It won’t tell you whether you like it or not. Unfortunately, the podcast ends with no conclusion, no help and little information about how to actually buy wine. They even insinuate that only wine “snobs” buy more expensive wines and everyone else should buy cheap wines.  I always get a little worked up when people say things like this because its simply untrue.  True wine nerds (or geeks) buy wines at a wide range of prices, because we appreciate the experience we have with each of them.  We also know that making a simple meal generally requires a simple wine to be paired with it.  Therefore, you can easily spot a true wine snob who doesn’t actually know much about wine if they flatly state that they won’t ever buy “cheap” wines.  The price you pay generally has to do with either the legally designated ranking of quality within the country of origin or because the wine is a premium brand.  Let’s face it, with everything else you buy sometimes you get whatever is on sale and other times you like to treat yourself. Wine should be no different. [...]


Freakonomics Radio: Do More Expensive Wines Taste Better? -

[...] You can hear Ashenfelter in a related Marketplace piece that aired recently. Stephen J. Dubner is an author and journalist who lives in New York City. [...]


Trust me, price is an indicator of the cost of the process or based on an OPINION but not a tell-all about qaulity. Bottom line: do your own research.
Or try this...
Drink Yellowtail (cheapo) for a month. Then drink Qupe Central Coast Syrah (reasonably priced at $15-20/bottle but quality) for a month. Then try to go back to Yellowtail.
You may find your palate can't stomach the Yellowtail any more. If nothing else you'll be drunk for a few!


My wife and I both enjoy wine. Many of our friends collect and even invest in wine. I have never been persuaded of the necessity or merit of buying expensive wine (with a few exceptions, I will very occassionally spend $30 on half bottles of some dessert wines). Otherwise most of our wine is around $10.

However I think the analysis is too crude in this podcast. Really expensive wine ($50+) has strong Giffin good properties and this will distort the results if you look at simple correlation for price and appreciation.

I am fairly convinced that $3 cartons are inferior to $10 bottles and I will take the 'Pepsi' challenge on that and back most others to do the same.

However overall I love this series and I really appreciate this particular episode. Can I recommend BBC's More or Less program (also Podcast) for similar ideas and insight.


I am a collector of "premiers crus" the type of wine that costs a thousand dollar a bottle. I do it for health reason. I cannot tolerate additives that they put in wine to increase their longevity. But the difference in taste is astounding. You do not convince me that a Château d'Yquem tastes like a Chablis or a Corton Charlemagne for that matter. You have to buy a bottle about 20 years old, let it "breathe"for two hours after opening it and then there is magic. The taste of Yquem sent you right to heaven. The lingering taste that you keep in your mouth is real and last a long time. And the more you wait, the more this supposedly sweet wine becomes the best you ever tested. Take another red wine, Petrus. It is good, but I consider it overprices. "Le cheval Blanc" is more exquisite and the taste reminds you that life is worth living only for having drinking this marvelous wine.
See, it all depends on how much you like wine and how much you want to put into it. For casual consumer of wine, it is useless to indulge into this kind of wine. For people with money, I don't know. There is no relation between goog taste and money. It is an acquired taste like you can get buying paintings as a hobby if you can afford it.
People who evaluate the wine by its price definively don't know really good wine. As for the chef, it is the case of every Frenchman I know (being one of them), we will rather lie than saying we don't know. Men are still men. And chefs are master in their domain. Amen


Tim Miller

For almost a decade has been trying to bring you the exact truth discovered here. Congratulations and Happy Solstice.

Conrad Parke

I got a sense from the tone of the podcast that you were almost being wilfully provocative but nevertheless I do feel I need to put you straight. Throughout the podcast you keep repeating the same mistake of assuming there is just one scale for judging wine. On one hand you judged a wine on whether people liked it and then compared it the cost and made a conclusion as if they were relative - these are two completely different scales! This was one of the first things I was taught when I did a very basic "introduction to wine tasting" course and it is disappointing that the wine experts involved your research didn't explain this to you.

In fact there are three scales for judging wine:-
1. Like versus dislike - in other words a subjective measure based on personal taste.
2. Good versus bad - an objective measure based on a technical knowledge of wine.
3. Cheap versus expensive - a market driven measure based on fashion and scarcity.

It is probably easier to think of these as the three axis on a three dimensional graph if that helps.

If you think this sounds complicated or far fetched they are exactly the same sort of measures people use all the time when judging music. I like classical music but I don't like Mozart. I can, however, still appreciate that Mozart was a master of his craft. He just doesn't appeal to my personal taste. Similarly I like the Rolling Stones and spend a lot of money getting hold of rare original recordings even though there are now much cheaper and better recorded digitally re-mastered versions available. The same behaviours also apply to appreciating wine.

The other point I didn't like about the podcast was that you seemed to be advocating wilful ignorance. That a acquiring a knowledge of wines was a waste of time because (according to your logic) the most expensive wines do not taste the best - whereas the reality is that the reason the majority of people develop an appreciation of wine IS SO YOU DON'T HAVE TO DRINK EXPENSIVE WINES! In other words by developing a good understanding of what sorts of wine you like and a good knowledge of where good wines can be found you can then avoid buying over priced or over rated alternatives. For example (and here is a tip for you) if you like really robust, full bodied red wines you will be tempted by Australian Shiraz or French Cabernet Suavignon. Don't. True, both can be very good but both are also fashionable choices and therefore overpriced. Instead try an Argentinian Malbec. Some Argentinians vineyards produce very good quality wine and the malbec grape makes for a fully bodied red. Both country and grape are, however, unfashionable so a bottle can be purchased very cheaply. It is this knowledge that makes studying wine but worthwhile and economic sense.