1. GASTRONO MIC HIERARCHIE S OF VALUE The Market for French AOC Wines Emily Gullickson  International Thesis Forum  May 5, 2010

2. The Food Economy

3. Agriculture & the Global Markets

4. Fast Food vs. Slow Food

5. buono, pulito, e giusto

6. Value, Quality & Differentiation

7. Willingness to Pay

8. Brands, Marketing, Reputation, & Standards

9. Labels “Good Source of Vitamin C” “Prevents Cancer” “425 Calories” C.O.O.L.

10. Geographic Indications of Origin

11. What is the effect of a labeling system on prices?

12. France

13. Varietals, Vintages & Terroir

14. Appellation d’Origine Contrôlée

16. Bordeaux v v

18. What is the effect of a labeling system on prices?

19. 13 Regions 314 Appellations 77,590 bottles of wine February 2010 The Model

20. Dependent Variable: Price

21. Independent Variables: AOC Vintage Region AOC Area Ratio AOC Production Ratio

22. Hedonic Price Model with Interactions: Price = β 0 + β 1 ×Q + β 2 ×K + β 3 ×R + β 4 ×q + β 5 ×r + λ 0 ×Q +λ 1 (Q×K)+λ 2 (Q×R)+λ 3 (Q×q)+ λ 4 (Q×r)

23. A quality label alone does not increase regional, anti-competitive distortions in the food economy.

24. Results Q = - % Q×Age = + 182% Q×Area = +33% Q×Prod = +79% Q×Age×Area = +84% Q×Age×Prod = +130% France

25. Bordeaux v v

26. What is the effect of a labeling system on the wine market?

27. The AOC system both solves & creates a market failure.

28. As a form of product differentiation, the AOC provides market information while setting a standard.

29. If enough producers join the standard, then they obtain market power.

30. What is the effect of a labeling system on the food economy?

31. New Information Market

32. New Institutions

33. Globalism & Regionalism

34. Fast Food vs. Slow Food

35. Acknowledgments: My advisor, Professor Thierry Warin My Family My Friends