Wine as a Veblen Good?

Do you buy wine that is considered a Veblen good? On the wiki page for Veblen good, there is a picture of a bottle of Louis Roederer Cristal–a forum favorite. That said, I can think of much worse examples than Cristal (Screaming Eagle, DRC, First Growths). How much of some wines high prices is scarcity vs. the Veblen effect? Certainly Screaming Eagle (21 times the price of other Napa 100 point wines) is a Veblen good but where is the line between scarcity and Veblen?

Or maybe there was a reason that Cristal didn’t seem like the best example of a Veblen good to me: Veblen Goods: An Example From The Real World

I don’t, which is why I don’t buy classified growth Bordeaux, high-end Burgundy, and allocated Napa Cabs. To me, the juice in the bottle is not that much better, if at all better, than many other wines and I’m not interested in letting people know what I’m drinking or conspicuous consumption. In some cases, the wines are quite good - I haven’t had every one.

Things like Cristal also became fashion items. I suppose that doesn’t really make any difference but I imagine that when a company has spent a lot of time creating a brand image of exclusivity and rarity, that making it available to just anybody with money isn’t quite in the same spirit of things. A Veblen good has to be about more than just money, as every expensive thing isn’t necessarily a Veblen good.

Definitely a Veblen good. Without these Veblen Wines (we should copyright that) many oenophiles would have no satisfying way to fulfill their need to work social signaling into the hobby.

If there were no Veblen wines, would we have ever had the bozos in the “heavy lumber” wine tasting crowd?

It takes a Veblen good to generate something like a self-referential frat of winos…Hollywood Jef, Big Boy, King Angry, The Punisher, The Bone Collector, The Pope
King Angry, The Hillbilly, The Big Ticket, Bad Boy Bruce, and The Don.

Wine bleeds Veblen.

Thanks. I will never buy Sceaming Eagle, anything owned by LVMH (Château Cheval Blanc, Château d’Yquem, Dom Perignon, Veuve Clicquot, Ruinart, Krug), E. Guigal, M. Chapoutier, Groupe Artémis (Château Latour), Constellation Brands (Mondavi and Opus), or Penfolds Grange as the conspicuous consumption is one of my least favorite parts of wine culture. Where I am confused is where to draw the line? It’s easy to identify the especially guilty luxury goods conglomerates or négociants, but certainly there are many expensive Burgundies whom’s main goal is to only make great wine (not money)–so it’s not just price (of course, there’s a good chance that all of Burgundy is turning into a Veblen good). I’m fine with paying for scarcity as that fits into the supply and demand curve.

Could be…if you let it.

I don’t know who any of those people are so I must be doing something right? They all sound like they could be names of upcoming blends of Dave Phinney wines (same thing?). I did fall guilty that I didn’t know Nowness.com is just marketing for LVMH: Nowness - Wikipedia

Tricky bastards!

Looks like someone beat us to the punch:

Damn!!!

While Crystal is a true Veblen good, much of the wine we, as collectors purchase, are actually Giffen goods. Like Veblen goods where demand increases with price, Giffen goods demand also increase with price because their correlated Veblen goods become too expensive driving up demand and subsequent price of lower cost alternatives. The classic example is the demand for 1er cru Burgundy as GC wines become unobtainable/unaffordable.

Yup, my wine hobby strays into Giffen territory!

Veblen goods.
Giffen goods.
Plain old good does it for me.

I don’t really know where to draw the line either. If classed growth Bordeaux and tête de cuvée Champagne are Veblen or Giffen goods then I guess I am guilty of contributing to the problem. Not losing sleep over it. I’ve given up on a number of them as prices increased beyond my tolerance but I have no objection to buying wine with caché if the price/quality is OK for me. Does Pichon Lalande give me 5 times the pleasure of Lanessan or Meyney? No, but it’s still worth it to me.

Pierre Gonon St. Joseph Vieilles Vignes Cuvee Giffen. Certainly much of the Northern Rhone has undergone a Burgundgiffication (it’s amazing if you combine any three words, it then sounds German).

Something I 've noticed is that academics from every field are sneaking into the wine world. Geologists are a natural fit. We’ve got the Society of Wine Economists, which can claim TV as one of their own, although sociology might make a claim. Climatologists are having a field day. There’s always the history of wine. Political scientists can ruminate about how lines for appellations are drawn…our own version of gerrymandering.

For sociologists wine has got to be a goldmine of opportunity, Status seekers, label drinkers. I love how people will tell me something like, I buy my wine from Kermit Lynch/Scribe/Alice Feiring/France/Grocery Outlet…subtext I am cool.

Every time I read about a wine auction I think of Veblen. He talked about how charity balls were just another chance to show everybody how successful you were…maybe a fancy dress gown for your beautiful wife…a new chariot…I remember Wine Spectator pix of various auctions…yikes!

Owning a winery is the second best thing next to owning a sports franchise in terms of getting your name out there.Not so good in terms of making money.

I knew a woman who was a chain gang supply person for a big drinks company. She did not understand why anybody would pay more than $35 for a bottle of wine, but was proud of her collection of Jimmy Choos etc. Most people want to be cool. Buying expensive goods may not really help with this but that doesn’t stop people. Does your Rolex tell better time than my Casio? Does your Ferrari get you through rush hour traffic better than my Honda?? Is your Tesla more ecological than my Prius or are you just richer?? (my soft spot: I want the expensive Tesla so I can be both ecological and cool)

Josh Grossman, are you boycotting Arbor Mist because of Constellation?? Don’t do that. You are denying yourself one of the great pleasures of this planet, especially the Pink Moscato Raspberry.Word on the street is they are selling Arbor Mist, so everything will be ok as long as the new owners don t change the blend.

For the conspicuous side of conspicuous consumption, put OWC’s in the cellar full or empty. Its all about perception, baby!

We drink our treasures unlike many other Veblen goods; we piss away the ownership and the display factor, not like driving a Lambo, or having a substantial yacht, a $50M estate, a Picasso, or flashing a 10 carat diamond which “is forever”. Pull the cork and the pride and flash of ownership evaporates. Additionally, Veblen juice is significant to just a tiny sliver of the population, so I say semi Veblen. It ain’t the same if you need to splain it when 98% of minds start shutting down with the word Chateau, then add Le Pin and lose 99+% which may be where you would want to be, but a poor ROI for a Veblen good

For a product to be a true Veblen good, its demand must increase as a result of its price increasing because the higher price makes it a status symbol. Issues of supply are not relevant. This may be true of Cristal, for all I know, but it is surely not true for high end Burgundy where at least some part of the price, if not most of it, is due to the extreme scarcity of the wine. I’m willing to believe that first growth Bordeaux are Veblen goods given that they are made in decent quantities, but I’d like to see some studies showing that the price increases have caused demand increases rather than enhanced world wide demand increasing price. Even if the bordelais manipulate demand by aritificially reducing supply (holding much of a vintage back to release at a later date), I don’t think this would be sufficient to make it a true Veblen good since if it were one, they wouldn’t have to manipulate the supply. They’d just keep increasing the price.

+1

Jonathan
These things are hard to figure. Sancerre used to be cheap and now it is much more expensive and much more popular. Is this a Veblen good or a fad?
It is easier to say what isn’t a Veblen good than say what is.

I am not following. A $14 Mondavi or $15 Guigal CDR or $45 Ruinart is a badge of conspicuous consumption? I am obviously not doing this right.

This is a weird thread. I bought a couple of bottles of 2009 Cristal because it is a sensational wine and nearly $100 less than the 2008. Is that a Veblen good? If so, wouldn’t I have bought the 2008? And if I was buying it as a signaling device, wouldn’t it be counterproductive to drink it at home with my wife, for whom the only thing it signals is that I spent too fucking much money on the wine? Again, I am obviously not doing this right. I need remedial social climbing tutoring

To answer the OP question, no, I don’t because doing so is stupid. Not to put too fine a point on it