Are Top Wine Prices Really Falling?

Omer Gokcecus reports on the cost of Wine Spectator’s annual wine listing:

The real price (in 1988 prices) for the basket of the entire Top 100 list was $4,313 in 1988; $3,132 in 1993; $2,533 in 1999; and $2,421 in 2004. That is nearly a 44% decrease in prices from 1988 to 2004.

Tyler Cowen buys it, but after looking at the data, which Gokcecus helpfully provides, I don’t.

Here’s the chart of the cost of the wine basket, by year; for some reason, 1998 is missing. The red bars are the ones cited by Gokcecus; click on the chart for a bigger version.

As you can see, the 44% decrease in prices cited by Gokcecus is largely a function of the fact that 1988 was an extreme outlier, and partly due to the fact that the other years were chosen quite strategically. You might instead say that the average price from 1994 to 1999 was $2,434; the average price from 2000 to 2005 was $2,728. Which is a rise of 12%. Or you could say that the price of the basket soared by 67% between 1996 and 2000.

It’s all true, but the fact of the matter seems to be that the real price is more or less constant, over the years, with a pretty high standard deviation from whatever the mean might be. I’m a huge fan of the globalization of wine. I even believe that it’s helped to bring prices down. But not necessarily in the Wine Spectator top 100 wines – those are the kind of wines which are often considered collectible, and a lot of them have been rising in price quite dramatically.

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