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Should You Invest in an Old Bottle of Whisky or in a Bottle of Old Whisky? A Hedonic Analysis of Vintage Single Malt Scotch Whisky Prices

Published online by Cambridge University Press:  29 July 2019

David Moroz  and
Bruno Pecchioli
David Moroz
Affiliation:
Department of Finance, Economics & Law, South Champagne Business School, 217 Avenue Pierre Brossolette, 10002 Troyes Cedex, France; e-mail: david.moroz@yschools.fr.
Bruno Pecchioli
Affiliation:
Department of Finance, Economics & Law, South Champagne Business School, 217 Avenue Pierre Brossolette, 10002 Troyes Cedex, France; e-mail: bruno.pecchioli@yschools.fr.
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Abstract

This article examines the main determinants of differences in ask prices set by investors for single malt whiskies from Islay in Scotland using an original dataset collected from a web trading platform specializing in whisky investment. We find strong evidence that the vintage age (the number of years between the distillation date and the data collection date) positively affects investor asking prices. More precisely, given that the characteristics of whisky, unlike wine, do not change over time once bottled, we disentangle the vintage age effect by subdividing the vintage age into whisky age (the time spent in the cask) and bottle age (the time spent in the bottle). Our results show that whisky age has a more pronounced impact (8.9% per year on average) than bottle age (6.7%). Other findings include the significant influence of distillery reputation, with a moderating effect for independent bottling (i.e., not in-house by the distiller itself) and a positive impact for cask strength whiskies compared to diluted ones. (JEL Classifications: G11, L15, Q11)

Keywords

hedonic pricesreputationvintagewhisky
Type
Articles
Information
Journal of Wine Economics , Volume 14 , Issue 2 , May 2019 , pp. 145 - 163
Copyright
Copyright © American Association of Wine Economists 2019 

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Footnotes

We wish to thank Olivier Gergaud, Philippe Masset, Karl Storchmann (the editor), and an anonymous reviewer for their useful comments and suggestions that materially improved the article.

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