Explaining Wine Scores Through Stochastic Frontier Analysis

GUSTAVO FERRO; NICOLÁS GATTI

Córdoba

Congreso; LVII Reunión Anual de la AAEP; 2023

FCE-UNC

Experts give scores to wines, which are quality proxies for marketers and buyers. The production of wine qualityis explained by a set of observable objective attributes, plus another set of unobservable and subjective (sensory)features, and randomness. We use a Stochastic Frontier Approach (SFA) to understand whether objective andsubjective (sensory) characteristics of wines explain the differences in wine scores. We estimate a wine qualitystochastic frontier production function, using a database of 1800 top-scored wines, in an 18 years-windowencompassing objective determinants (price, production, year, grape, country, etcetera), being sensory aspectsrelated to wine grading unobservable. We find that the variables included explain half of the “efficiency” inattaining scores and our results suggest that sensory variables may have a role in explaining inefficiency.