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Modeling Grape Price Dynamics in Mendoza: Lessons for Policymakers

Published online by Cambridge University Press:  30 October 2019

German Puga
Affiliation:
Agricultural and Resource Economics, School of Agriculture and Environment, University of Western Australia, 35 Stirling Highway, Crawley WA6009, Australia; e-mail: 22284819@student.uwa.edu.au.
James Fogarty*
Affiliation:
Agricultural and Resource Economics, School of Agriculture and Environment, University of Western Australia, 35 Stirling Highway, Crawley WA6009, Australia
Atakelty Hailu
Affiliation:
Agricultural and Resource Economics, School of Agriculture and Environment, University of Western Australia, 35 Stirling Highway, Crawley WA6009, Australia; e-mail: atakelty.hailu@uwa.edu.au.
Alejandro Gennari
Affiliation:
National University of Cuyo, Department of Economics, Policy and Rural Administration, Provincia de Mendoza, Argentina; e-mail: agennari@fca.uncu.edu.ar.
*
e-mail: james.fogarty@uwa.edu.au (corresponding author).

Abstract

Mendoza is the main wine-producing province of Argentina, and the government is currently implementing a range of policies that seek to improve grape grower profitability, including a vineyard replanting program. This study uses a dataset of all grape sales recorded in Mendoza from 2007 to 2018, totaling 90,910 observations, to investigate the determinants of grape prices. Key findings include: smaller volume transactions receive lower-average prices per kilogram sold; the discount for cash payments is higher in less-profitable regions; and the effect of wine stock levels on prices is substantial for all varieties. Long-run predicted prices are also estimated for each variety, and region; and these results suggest that policymakers should review some of the varieties currently used in the vineyard replanting program. (JEL Classifications: Q12, Q13, Q18)

Type
Articles
Copyright
Copyright © American Association of Wine Economists 2019

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Footnotes

The authors thank an anonymous referee and the editorial team at JWE (especially Karl Storchmann) for their comments and assistance in progressing this paper to its final version.

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