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?

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  1. Brandy says:

    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!

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  2. 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

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  3. Chris says:

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

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  4. Harrison B says:

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

    Keep up the good work!

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  5. BW says:

    I highly recommend The Wine Trials book.

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  6. KeefInCheeseland says:

    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 months…win-win!

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  7. Clarke says:

    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.

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  8. QuebecMO says:

    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

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