What determines wine prices: Objective vs. sensory characteristics

The hedonic technique is applied to wines. In the price equation we include objec tive characteristics appearing on the label, as well as sensory characteristics and a grade assigned by expert tasters. We have three almost identically structured data sets (two on Bordeaux wines, and one on Burgundy wines). The results are used to make comparisons between two of the most important wine regions in France, and comparisons over time (the two Bordeaux data sets are sampled at different points in time). Another puzzle is the lack of correlation between price and pleasure. Perhaps it is not so surprising that a first-rate example of a little known wine can seem much more memorable than something more famous selling at ten times the price; part of the thrill is the excitement of discovery and the feeling of having beaten the system. What is more extraordinary is the wild price variation at the very top end. Demand bubbles up mysteriously, apparently fuelled by fashion and rumour as much as by intrinsic quality. - Jancis Robinson, Confessions of a Wine Lover, Penguin Books, 1997.