Enjoyment and the price of wine

Over at the American Association of Wine Economist's blog, Robin Goldstein and Johan Almenberg discuss their paper Do More Expensive Wines Taste Better? Evidence from a Large Sample of Blind Tastings (joint work with A. Dreber, J. W. Emerson, A. Herschkowitsch, and J. Katz) which is due out in the forthcoming issue of the Journal of Wine Economics. They say

Our main finding is that participants in blind tastings do not appreciate expensive wines more than cheap wines. In our sample of over 6,000 blind tasting observations, compiled by food and wine critic Robin Goldstein and discussed at length in his new book, The Wine Trials (Fearless Critic Media, 2008), we find that the correlation between price and overall rating is in fact small and negative, suggesting that individuals on average enjoy more expensive wines slightly less.

They go on to ask

Why, then, do everyday wine drinkers spend money on expensive wines? The price tag itself may influence how much we appreciate the good. This is in line with a familiar finding in marketing research: increasing the price of a good sometimes increases the demand for the good for psychological reasons alone (see for example Cialdini, 1998), by signaling that the good is covetable. Goldstein explores this effect in The Wine Trials, which examines the methods of modern wine marketing, the undue deference of consumers toward numerical ratings in industry publications such as Wine Spectator, and the inconsistencies between controlled blind-tasting results and those sorts of ratings, which exhibit a strong positive correlation with price.

So cheap may not be nasty. You may just think it is. Given that you have seen the price.