ChileanJAR

An hedonic function relating the retail price of Chilean wine in the USA market to the following variables was estimated: quality rating, aging, variety, valley of origin and membership to an association. Estimates for the percentage impact of each of these factors were estimated for all vintages carried out from 1989 to 2002 and for all the vintages. Marginal prices for each attribute were also estimated. The overall conclusion was that variety and location (terroir) are more influential in the commercial success of wines than quality, measured by expert opinions, and aging. This is important because it indicates that wrong long term decisions can not be modified via oenological practices (aging). In general, red varieties and the Valleys north from of the Maipo Valley have a positive effect on prices, whereas valleys located south of this valley and some white varieties have a negative effect. Finally, the analysis by vintage from 1989 onwards, shows that Chilean red wines have been gaining recognition of their quality in the USA.