Spatial discontinuity approach reveals collective reputation significantly affects wine prices in notable regions, highlighting heterogeneity.
In this work we propose a spatial discontinuity approach around the borders of wine appellation areas in Piedmont and Tuscany to solve the identification issue when measuring the impact of collective reputation on price. Using a database of geolocalised firms we show that collective reputation carries a significant price premium for well known appellations, whereas the effect is not significant or even surprisingly negative for weaker ones. We propose some possible explanations for such negative effect. These include the excessive proliferation of appellations, the different effectiveness of wine names, as well as group heterogeneity and the role of consortia.
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Castriota et al. (2025) studied this question.
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