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GASTRONO MIC HIERARCHIE S OF VALUE The Market for French AOC Wines Emily Gullickson  International Thesis Forum  May 5, 2010.

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Presentation on theme: "GASTRONO MIC HIERARCHIE S OF VALUE The Market for French AOC Wines Emily Gullickson  International Thesis Forum  May 5, 2010."— Presentation transcript:

1 GASTRONO MIC HIERARCHIE S OF VALUE The Market for French AOC Wines Emily Gullickson  International Thesis Forum  May 5, 2010

2 The Food Economy

3 Agriculture & the Global Markets

4 Fast Food vs. Slow Food

5 buono, pulito, e giusto

6 Value, Quality & Differentiation

7 Willingness to Pay

8 Brands, Marketing, Reputation, & Standards

9 Labels “Good Source of Vitamin C” “Prevents Cancer” “425 Calories” C.O.O.L.

10 Geographic Indications of Origin

11 What is the effect of a labeling system on prices?

12 France

13 Varietals, Vintages & Terroir

14 Appellation d’Origine Contrôlée

15

16 Bordeaux v v

17

18 What is the effect of a labeling system on prices?

19 13 Regions 314 Appellations 77,590 bottles of wine February 2010 The Model

20 Dependent Variable: Price

21 Independent Variables: AOC Vintage Region AOC Area Ratio AOC Production Ratio

22 Hedonic Price Model with Interactions: Price = β 0 + β 1 ×Q + β 2 ×K + β 3 ×R + β 4 ×q + β 5 ×r + λ 0 ×Q +λ 1 (Q×K)+λ 2 (Q×R)+λ 3 (Q×q)+ λ 4 (Q×r)

23 A quality label alone does not increase regional, anti-competitive distortions in the food economy.

24 Results Q = - % Q×Age = + 182% Q×Area = +33% Q×Prod = +79% Q×Age×Area = +84% Q×Age×Prod = +130% France

25 Bordeaux v v

26 What is the effect of a labeling system on the wine market?

27 The AOC system both solves & creates a market failure.

28 As a form of product differentiation, the AOC provides market information while setting a standard.

29 If enough producers join the standard, then they obtain market power.

30 What is the effect of a labeling system on the food economy?

31 New Information Market

32 New Institutions

33 Globalism & Regionalism

34 Fast Food vs. Slow Food

35 Acknowledgments: My advisor, Professor Thierry Warin My Family My Friends


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