hedonic price equations for each vintage from 1992
(1993 in the case of New Zealand) to 2000. The set
includes 6866 observations from Australia and
1531 from New Zealand. For the Australian sample,
the average quality rating is 87.2 points (range 70–
97) and the average price is A$23.81 (range A$5–
300). For New Zealand, the average quality rating
is 88.6 points (range 73–97) and the average
price is NZ$23.25 (range NZ$7–90). Halliday’s
value of sensory wine quality is defined by the
variable
vintage rating
(100-point scale). He also provides
a
winery rating
(2.5–5 stars) of the producer
as a supplier of premium wine, and a
classic wine
classification in recognition of an outstanding wine.
To evaluate differences in the willingness to pay
for different grape varieties, we distinguish six different
red and six white wine varieties or variety groupings,
respectively. In order to assess the value of
regional denominations in Halliday’s sample, we distinguish
wines from 27 different regions in Australia
as well as six different regions in New Zealand.
Separate equations are estimated for Australia and
New Zealand. The endogenous variable (the taxinclusive
recommended retail price) is expressed in
local dollars per 750 mL bottle.
Table 2 provides an analogous overview of our second
data source from Australia’s popular wine magazine
Winestate
.
4
It provides wine ratings for 12 625
combined observations for Australia and New Zealand.
In contrast to the 100-point scale for sensory wine
quality adopted by Halliday,
Winestate
uses a 5-
star rating scheme, assigning between 3 and 5 stars
but also using half-stars. (Some wines have no rating
at all, which presumably implies less than 3 stars, so
we assigned 2.5 stars for all non-rated wines.) For
simplicity, we have given two points for every star, to
avoid using decimals. From the
Winestate
tastings, a
consistent set is available for each vintage from 1992
to 1999 (1994–99 in the case of New Zealand), amounting
to 11 251 observations from Australia and 1374
from New Zealand. For the Australian sample, the
average quality rating is 3.25 stars and the average
price is A$19.56 (range A$5–385). For New Zealand,
the average quality rating is 3.44 stars and the average
price is NZ$20.59 (range NZ$9–90). In order to