Expert Opinion and Bordeaux Wine Prices: An Attempt to Correct Biases in Subjective Judgments

The purpose of this paper is to assess the role of expert opinion on the pricing of Bordeaux wines. To this end, we compile an original dataset including (1) retail prices, (2) scores attributed to wines from France, Spain, and the United States by nine experts from 2000 to 2010, and (3) the meteorological conditions under which the grapes were produced. With this dataset, we aim to determine the presence of bias rooted in the subjectivity of the experts. We assume that the expert wine scores have two main components: (1) an objective one that is driven by the fundamentals of wine production (the quality of soil, producers' skills, and climate conditions) and (2) a subjective one that is determined by the individual opinion of the experts. We use control function techniques to compare the respective impacts of these two factors and find that prices are influenced more deeply by the fundamental quality of the wine than they are by the judge's subjectivity. Furthermore, we notice the great impact of highest ratings on pricing, which we interpret as a marketing effect: the most favorable score is likely to be the most publicized, which influences the price of the respective wine.