The Impact Of Gurus On Wine Prices: Measuring The Robert Parker Effect On Young Clarets

Robert Parker is widely regarded as the most influential wine expert in the world, particularly for his power over the prices of en primeur Bordeaux wines, those that are still very young and not yet bottled. New economic research estimates the effect of Parker oenological grades and finds that, had he published grades in 2003, the average en primeur price would have been almost three euros higher per bottle.

Robert Parker”s wine reports and oenological grades exercise an enormous power over wine prices, especially en primeur prices, which are established just six or seven months after the harvest. The quality of such young wines is hard to judge, which might explain why Parker has a relatively large influence on en primeur prices.

The research by Michael Visser and colleagues – published in the June 2008 issue of The Economic Journal – exploits the fact that in 2003, the chateau owners had to determine their prices without knowledge of the Parker grades, whereas in previous years the grades were made public before prices were determined. This unusual event makes it possible to estimate the effect of Parker grades.

Each spring (since 1994), Robert Parker comes to Bordeaux to evaluate a sample of en primeur wines of the latest vintage. He publishes his findings in the journal The Wine Advocate, usually the April issue. The en primeur prices are fixed by the chateau owners in the weeks and months thereafter, giving them the possibility to incorporate the information contained in the Parker grades.

In 2003, things went differently because the wine expert did not come in the spring to taste the most recent vintage (the 2002 vintage). It meant that the chateau owners had to determine their prices without knowledge of the grades attributed by Parker. The researchers use this is to estimate a Parker effect on en primeur prices. They obtained the 2002 and 2003 en primeur prices for approximately 250 wines from a large Bordeaux wine broker. These data were matched with data from The Wine Advocate, making it possible to determine which of the wines were graded in 2002.

The Parker effect is simply defined as the mean price evolution (between 2002 and 2003) of the sub-sample of graded wines minus the mean price evolution of the ungraded wines.

The researchers” estimate of the overall Parker effect equals 2.80 euros per bottle (which corresponds to 15% of the average en primeur price in 2003), and this estimate is strongly significant.

The Parker effect increases with the ranking of the wine. Estimates by appellation show that the Parker effect is the largest for wines from Pomerol, which is interesting since these are precisely the wines that Robert Parker appreciates the most.

”The Impact of Gurus: Parker Grades and En Primeur Wine Prices” by Hela Hadj Ali, Sebastien Lecocq and Michael Visser is published in the June 2008 issue of the Economic Journal.

Michael Visser

00-33-1-49-59-69-51 | visser@ivry.inra.fr