Wine Price and the Veblen Effect

By mthomas

I am really enjoying reading Wine and Philosophy edited by Fritz Allhoff.  It is much more accessible than many other books on the subject and has chapters by Kent Bach and the Lehrers on wine talk that are particularly of interest. The final section on the politics and economics of wine is also strong and contains a gem of a chapter by Justin Weinberg on taste, price and rationality.

In the Chapter ‘Taste how expensive this is’ Weinberg, a philosophy Professor at the University of South Carolina with a name that appropriately translates as ‘mountain of wine’, cites the work of Thorstein Veblen. Veblen a Norwegian-American sociologist and economist published The Theory of the Leisure Class in 1899 and coined the term ‘conspicuous consumption’. Weinberg examines wine as a Veblen Good i.e. a product that becomes more desirable as it increases in price.

Weinberg uses examples such as Screaming Eagle 1997 to illustrate complex points about consumer thought and behaviour. He explores wine price as a proxy for quality and demonstrates that this, like many heuristics, is flawed. He goes on to criticise wine scores and the notion of typicity. This reminded me of a recent exchange I had with someone from the wine world about the value of such scores. He defended the convenient fiction of rating scales yet had little understanding of the statistical nature of such scales (which are arbitrary and, more importantly, at best have ordinal rather than interval properties). Weinberg uses Martin Reyes analogy of jackets (suit or ski) to illustrate that ‘better’ is linked to purpose and context.

Weinberg suggests that price and quality are not correlated and also that quality and pleasure are similarly unrelated in any simplistic manner. He goes on to explore ‘wine enthusiast culture’ and argues that despite irrationality this stimulates wine production and is therefore ‘good’. We live in a time when it is possible to get great pleasure from relatively inexpensive wines (bargains - the opposite of Veblen Goods). I would agree with this perspective and am amazed at some of the absurd quality justifications made for the price of some wines when it is obviously primarily scarcity, status and economic drivers that dictate price.

As Weinberg points out ‘we are sometimes in the position of choosing what is rational and what is good, and it is not clear which wins, or why’. I hope you read the full essay and enjoy it as much as I did.

Allhoff, F. (Ed.) (2008) Wine and Philosophy Wiley-Blackwell

Quinta De Azevedo Vinho Verde 2008

By mthomas

This is an increasingly well known and widely available refreshing white that is perfect on hot days. It  is ‘only’ 10.5% alcohol and thus less likely to leave you nursing a mid-afternoon headache after a few glasses at lunch.

Made from Loureiro and Pederña grape varieties it has a light spritz and sparkling acidity. Ideal as an aperitif with salty snacks and olives, it has lemony and slightly herbaceous notes. It is also great for washing down shellfish and grilled fish. It is £5.99 (or £4.99 if you buy 2) from Majestic and is also sometimes stocked by Waitrose. A good credit crunch alternative to kiwi Sauvignon Blanc at half the price. It is easy on the liver as well as the wallet.

This is a wine with a lot of character and I think I could recognise it in a blind tasting.

The Wine Society Tasting Guide and the Social Media Revolution

By mthomas

I am an unapologetic fan (and member) of The Wine Society and generally find it to be the best UK independent wine retailer in terms of wine quality and customer care.  Over the last 135 years it has built up relationships with producers that are based on trust and symbiosis rather than fleeting market trends and global branding concerns. As a member of a co-operative I feel valued and engaged with the business in a way I never experience whilst browsing the shelves of supermarkets.

The society website, whilst not exactly cutting edge, is functional and worth a visit. It has a useful text guide to tasting that includes a basic ‘how to’ but also extends to spotting faults and matching wine with food. A new addition is a short and simple video guide to tasting which I guess signals a move towards new ways of communicating with members.

I have been reading up on new communication and marketing technologies and trends in the wine world and guess my site and blog are representative of some of these. The Wall Street Journal has recently published an article related to this under the headline ‘Luxury Wine Market Reels from Downturn’. It suggests that some wineries are using online services such as Facebook and Twitter to target consumers directly and that this is increasing revenue. The evidence for the efficacy of this approach appears limited at present but the exponential increase in social networking media suggests that it will be increasingly important in future.

You have probably noticed the AddThis buttons at the bottom of my posts. These let you share posts etc with friends via sites like digg and Facebook. If you are not already using these, try them out. Try to find a sharing site that has the kind of content you like and also start flagging up articles for others to enjoy.

Catch up on Research References

By mthomas

This post is a bit of a catch up. I have been busy marking theses and examining at doctoral vivas. It is interesting work but time-consuming so I have not done as much updating of the site as I would have liked. I have been sent lots of references for papers and books so will be adding lots more to the wine research section over coming weeks. I am going to make more information available electronically and increase applications on the site too.

The world of wine continues to be full of contradictions and contention. It was widely reported this week that French wine is being ’shunned’ by consumers in the UK.  Having dropped below Australia in 2004 and the USA in 2008, French wine is now 5th with South African and Italian wines also ahead in the popularity stakes. The top-selling brands in the UK include more than a few of what I regard to be nasty confections dependent on branding tricks and huge financial backing. These wines tend to be more refined (in the industrialised not elegant sense!) lower in ‘good stuff’ such as polyphenols and lack a connection with terroir. I will continue to try to support smaller makers and communities with ethical and thoughtful production techniques. The essential problem is that consumers base their buying decisions on a price/risk trade off and these familiar brands are cheap, consitent (in their blandness) and familiar. In risk terms they therefore tick all the boxes.

Linked to this is corporate sponsorship and journos on jollies. I went to Wimbledon on the final sunday and thought that the Federer/Roddick final almost as good as last year’s epic. My visit was not laid on by any corporate host but I was aware of lots of schmoozing of journalists by a range of companies (including those with wine interests). It will be telling to see how they retain their independence when reviewing wines from those who entertain them so lavishly. Psychology (and its less esoteric relative - common sense) would suggest that they are unlikely to bite the hand that feeds them…

Food and Wine Matching Widget

By mthomas

Here is an amusing and functional widget from Natalie Maclean of NatDecants. It is a food and wine matching tool. Just click on the food or wine tabs to find a match.

Have fun.

Rare Bottles Released by Collectors

By mthomas

I have heard from a couple of retailers recently and although I tend to avoid plugging offers it seems appropriate in this instance. They are relatively small operations and the wine they are offering is likely to be of interest to people concerned about terroir and accessing good quality individual bottles from Burgundy and the Rhone with solid provenance. The also have something to ’say’ about the psychology and economics of collecting wine.

First is a tranche of Armand Rousseau’s finest being offered by the antique wine company. These wines have come from one cellar, the owner of which had (and still retains) a direct allocation with the producer. They have mixed cases such as one from 1985;
1985 - 75cl - 1bt - Chambertin
1985 - 75cl - 1bt - Charmes Chambertin
1985 - 75cl - 4bt - Gevrey Chambertin 1er Cru Clos St Jacques
1985 - 75cl - 6bt - Clos de la Roche
The only catch is the £7500 you would have to find to indulge in such wonderful wines.

More affordable but equally interesting are wines available from Corky’sWine (possibly the worst name for a fine wine retailer I am aware of - apart from the connotations of wine being corky, it could also read as Corky Swine!). However, the wine available here includes superb Rhones such as The Roasted Slopes mixed case of Cote Roties;
1997 Chapoutier Côte Rôtie La Mordorée
1998 Guigal Côte-Rôtie Château d’Ampuis
2001 Michel Ogier Côte-Rôtie
2000 Rene Rostaing Côte-Rôtie Côte Blonde
1999 J M Gérin Côte Rôtie les Grandes Places
1998 Tardieu-Laurent Côte Rôtie
Not cheap at £390 (and out of my league as I have had to curtail spending to buy a new car) but some wonderful wines available in mixed cases. These too are the result of someone collecting with a passion but finding themselves with a surplus. Below is an extract from the site explaining the rationale of offering mixed cases rather than auctioning off the collection;

“The reason is the personal affection that is felt for the wines themselves, those who have made them, and those who have sold them. These wines need to go to ‘good homes’. To be bought, in other words, by those who would cherish them and enjoy them in the way, he believes, their producers intended: with food and friends, for personal pleasure and to learn more about terroir and the craft of great wine creation.”

I hope to share the full story of these wines with you in a post in a few weeks.

In the meantime consider Beverland (2006) who suggests that ‘authenticity’ is a ‘cornerstone of contemporary marketing practice’. After looking at 20 ‘ultra-premium’ wineries and interviewing wine drinkers, six key attributes of ‘authenticity’ were identified:
1. heritage and pedigree
2. stylistic consistency
3. quality commitments
4. relationship to place
5. method of production
6. downplaying of commercial motives
These attributes resonated with consumers but were both ‘real and stylized versions of the truth’.

I also hope to update the research page of the site soon as I have been sent so many new references to papers and books about wine and psychology.

Mindhacks and The Troublemaker’s Fringe

By mthomas

During the week I joined a few hundred other hot, but well-mannered, people crammed into a basement in Holborn to participate in a Troublemaker’s Fringe event. Speakers were Vaughan Bell, Ben Goldacre and Petra Boynton. Vaughan is a neuropsychologist, researcher, clinician and associate editor colleague of mine on the Psychologist Magazine. He also writes for Mindhacks  a great site about ‘neuroscience and psychology tricks to find out what’s going on inside your brain’. It is well worth bookmarking as it is a site full of good content. Vaughan  spoke about ‘media scaremongering’ about technology such as email and his excellent presentation can be found here.

Ben Goldacre might be known to you from his writing for the Guardian’s Bad Science slot and badscience.net. He is a vitriolic presenter and could cut it on the stand-up comedy circuit. His message was deadly serious though and he set out the implications of  science writers ‘misleading the public’. Petra Boynton is a social psychologist and agony aunt with an interest in sexual health and relationships. She also spoke about the dangers of taking advice from ‘media experts’, particularly in relation to sexual matters which tend to be ’spun’ into lightweight entertainment.

It was great night in that it challenged us to think more critically about psychology how our work is can be communicated to a wider audience in a way that might be more evidence based and useful.  There was a hint of stereotyping of all journalists as either inept, corrupt or both and, as someone who has had an opinion on psychology misrepresented, I am usually sympathetic to the view. However, there are noble exceptions among writers and I was relieved recently to be portrayed accurately by Rosi Hinton of Decanter (see August issue ‘My Passion for Wine’ article). 

The wine world and other areas are not immune from tensions relating to media representation but I think psychology is an exceptionally difficult subject to write about and most journos are not skilled as scientific journal readers. It can be hard to translate an abstract full of technical terms into something meaningful for a wider audience. On the other hand some are just tabloid hacks who knowingly trivialise and should be ashamed of their negative contribution to human experience, knowledge and well-being…