THE ECONOMICS OF WINE: PRICING, QUALITY AND RATE OF RETURN: Part 1 Introduction

This thesis consists of six chapters, and the main research contributions are contained in chapters two through five inclusive. The topics addressed in each chapter are distinct, but related, and the specific contributions to knowledge made by the different chapters are related to: (i) understanding more fully the nature of the demand for alcohol; (ii) explaining the relationship between reputation characteristics and consumers’ willingness to pay for wine; (iii) estimating the rate of return to Australian wine; and (iv) using financial analysis to reveal the risk diversification benefits available by including wine in an investment portfolio.

Expert opinion and cuisine reputation in the market for restaurant meals

As food is an experience good, the market for restaurant meals is a market where the cost of acquiring information regarding quality is relatively high. In such markets consumers often turn to reputation measures to guide purchase decisions. As Australia does not have a longstanding cuisine style of its own, and given Australia has been open to substantial immigration inflows since federation, it represents an especially appropriate market to study regarding the impact of individual restaurant reputation and collective cuisine reputation on meal prices. The following study uses the hedonic price approach to investigate the implicit price of individual reputation indicators, cuisine type reputation indicators, and other objective indicators in the market for restaurant meals. The empirical findings presented suggest that both individual restaurant reputation and cuisine type reputation are important. Other important factors are shown to include the quality of the restaurant wine list, the availability of private dining rooms, and whether or not there is an outdoor dining option.Expert Opinion, Food, Hedonic Pricing, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, D12, R22,

Expert opinion and cuisine reputation in the market for restaurant meals

As food is an experience good, the market for restaurant meals is a market where the cost of acquiring information regarding quality is relatively high. In such markets consumers often turn to reputation measures to guide purchase decisions. As Australia does not have a longstanding cuisine style of its own, and given Australia has been open to substantial immigration inflows since federation, it represents an especially appropriate market to study regarding the impact of individual restaurant reputation and collective cuisine reputation on meal prices. The following study uses the hedonic price approach to investigate the implicit price of individual reputation indicators, cuisine type reputation indicators, and other objective indicators in the market for restaurant meals. The empirical findings presented suggest that both individual restaurant reputation and cuisine type reputation are important. Other important factors are shown to include the quality of the restaurant wine list, the availability of private dining rooms, and whether or not there is an outdoor dining option.Expert Opinion, Food, Hedonic Pricing, Research Methods/ Statistical Methods, D12, Q18, Z10,

EXPERT OPINION AND CUISINE REPUTATION IN THE MARKET FOR RESTAURANT MEALS

As food is an experience good, the market for restaurant meals is a market where the cost of acquiring information regarding quality is relatively high. In such markets consumers often turn to reputation measures to guide purchase decisions. As Australia does not have a longstanding cuisine style of its own, and given Australia has been open to substantial immigration inflows since federation, it represents an especially appropriate market to study regarding the impact of individual restaurant reputation and collective cuisine reputation on meal prices. The following study uses the hedonic price approach to investigate the implicit price of individual reputation indicators, cuisine type reputation indicators, and other objective indicators in the market for restaurant meals. The empirical findings presented suggest that both individual restaurant reputation and cuisine type reputation are important. Other important factors are shown to include the quality of the restaurant wine list, the availability of private dining rooms, and whether or not there is an outdoor dining option.Expert Opinion, Food, Hedonic Pricing, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety,

Optimal alcohol taxes for Australia

Objective: To estimate welfare maximising tax rates for beer, wine, and spirits using a mathematical model that considers both the welfare loss alcohol taxes impose on non-abusive consumers and the welfare gains due to alcohol taxes reducing externality costs. Results: Optimal per litre of pure alcohol (LAL) tax rates are substantially different to both current alcohol tax rates and the uniform tax rate recommended as part of the 2010 Australian Government Tax Review. Given an individual consumer utility decision model, the best estimate values of the welfare maximising LAL tax rates are: $37 for beer,$11 for wine, $50 for spirits, and$77 for ready-to-drink spirits. Conclusion: As externality costs and the responsiveness of consumers to price changes are different for each alcohol type, community welfare is maximised by setting beverage specific LAL tax rates.Tax, Alcohol, Externalities, Demand and Price Analysis, Health Economics and Policy, I18, H23, H21,

Wine tax reform: The impact of introducing a volumetric excise tax for wine

In addition to the GST, alcohol sold in Australia is subject to excise tax. Although both beer and spirits are subject to a volumetric excise tax, wine is subject to an additional value added tax known as the Wine Equalisation Tax (WET). The recent Henry tax review recommended substantial changes to Australian alcohol taxation policy. Here, the implications for the wine industry of the Henry tax review recommendations are explored using a computable general equilibrium model. The results show that: (i) replacement of the WET with a revenue neutral volumetric excise tax would have a small negative impact on the wine industry; (ii) removal of the WET rebate would have a substantial negative impact on small wineries; and (iii) applying a uniform alcohol tax equal to the packaged beer excise rate across all alcoholic beverages would have a notable negative impact on the wine industry.wine, alcohol taxation, general equilibrium modelling, Demand and Price Analysis, Health Economics and Policy, R13, H23,

Return to wine: A comparison of the hedonic, repeat sales, and hybrid approaches

Comparisons between the return to wine and standard financial assets are complicated in that the return to wine must be estimated from infrequent sales of heterogeneous wine brands. Wine returns can be estimated using several different approaches, and here the performance of the hedonic approach, repeat sales approach, and hybrid approach are compared using 14,102 auction sale observations for Australian wine over the period 1988 to 2000. For the data set considered the results show that the hybrid approach provides the most efficient estimates, and that the repeat sales approach provides significantly higher total return estimates than the other two approaches. The portfolio diversification benefit attributed to holding wine is then shown to vary with estimation method.Return to wine, Price index, Research Methods/ Statistical Methods, C33, G12,

Patterns in the politics of drugs and tobacco: The Supreme Court and issue attention by policymakers and the press

Past research has demonstrated lasting effects of important Supreme Court decisions on issue attention in the national media. In this light, the Court has served as an important agenda setter. We significantly expand on these findings by arguing that these salient Court decisions can raise the perceived importance of political issues and induce heightened, short-term policy attention in the broader political system. Using measures of media attention, congressional policy actions, and presidential policy actions, we utilize dynamic vector autoregressive modelling to examine the Court’s impact on issue attention in the macro policy system regarding tobacco and drug policy. Overall, this study suggests that the Supreme Court’s most important decisions might significantly affect broader issue attention in the American political system

Local Government Efficiency in Western Australia

The State government of Western Australia is currently working through a significant program of local government reform that has as a core objective a reduction in the number of local councils. The perception that there are economies of scale in service delivery is a key reason behind the State government’s desire to see a reduction in the number of councils in Western Australia. The following article uses the technique of Data Envelopment Analysis to measure the technical and scale efficiency of councils in Western Australia. The average pure technical efficiency score for Western Australian councils was found to be 83 per cent, and the average scale efficiency score was found to be 94 per cent. This suggests that pure scale effects are not a major source of inefficiency. Detailed returns to scale analysis for the 73 councils where complete data was available revealed that 17 councils were operating at the optimal scale, 26 were operating below the optimal scale, and 30 were operating above the optimal scale.Data Envelope Analysis, Local Government, Efficiency, Productivity Analysis,

Visual display and alarm system for wind tunnel static and dynamic loads

A wind tunnel balance monitor and alarm system developed at NASA Ames Research Center will produce several beneficial results. The costs of wind tunnel delays because of inadvertent balance damage and the costs of balance repair or replacement can be greatly reduced or eliminated with better real-time information on the balance static and dynamic loading. The wind tunnel itself will have enhanced utility with the elimination of overly cautious limits on test conditions. The microprocessor-based system features automatic scaling and 16 multicolored LED bargraphs to indicate both static and dynamic components of the signals from eight individual channels. Five individually programmable alarm levels are available with relay closures for internal or external visual and audible warning devices and other functions such as automatic activation of external recording devices, model positioning mechanisms, or tunnel shutdown