So, $30-40 is outside your strike zone?
Determining whether something is a Veblen good is not a matter of why you specifically buy it–you might wish it were cheaper and merely tolerate the price because you liked the wine–but of how the market treats the product. I agree with Mel that the concept is, by nature, going to make it hard to pin down in a lot of specific cases. That doesn’t mean it doesn’t describe something real and that for some people, at least, some well-known wines are status symbols, good because they are costly,and, in that sense, Veblen goods.
FWIW, I’m not sure Cristal is still a good example of a Veblen good. It was primarily rappers driving that status, and they dropped the brand when they felt the love was not reciprocated.
As far as Neal’s point, Cristal is not a Veblen good to him, whether or not it is still a Veblen good in the broader market (as mentioned, I doubt that it is).
-Al
I do the same thing with watches, shoes, and really everything. I live by the motto of too poor to buy cheap and The Zen and the Art of Motorcycle Maintenance might have had an impression on me; I do love quality.
I do think that an automatic movement is superior to a quartz movement and a sapphire crystal face is certainly better than glass or plastic but I would never buy a Rolex (not just because they are ugly compared to Bauhaus styling but also that they are a Veblen good). I am tempted by some of the newer smartwatches especially the Withings/Nokia Steel. Digressing to shoes, it’s probably hard to compare men’s and women’s as I don’t think of the fashion aspect of mens shoes nor know much about the cordwaining techniques of quality women’s shoes. I think I have six pairs that have a goodyear or Norwegian welt construction and prefer the uppers to be made of good leather or shell cordovan–but am never going to buy anything that signifies status. I did just get my grandfather’s square dancing cowboy boots that I inherited resoled. On cars there too many details to discuss. I really like a manual with a straight six engine and hate a variable speed transmission. The half-life of lithium-ion batteries has still scared me too although the replacement cost has plummeted, so less so now. Looking forward to seeing what the new electric cars develop in terms of quality. As you can tell from above, I’ve given up on being cool long ago.
I guess with most things it’s easy to discern what makes a thing have quality. Wine is harder. People spend their whole life trying to figure out the Je Ne Sais Quoi of making quality wine. Ohio (where I live) has a long tradition of making wine–but so far not much I would call quality. Evidently there is a small section of Ohio in Adams County that has identical soil composition to St. Emilion. The owner of Chehalem Vineyards and winemaker from Erath started a winery there based on this, Kinkead Ridge. It was making the best wines from Ohio, and doing the things I look for in quality wine. They were really doing everything right in terms of the vineyard and winemaking. Unfortunately, it was sold when the vines were still young and the new owners lost most of the vines in a hard freeze. It’s now a soy bean field and I will never know if it’s possible to make something comparable to Château Angélus from Ohio. The things I look for in a quality red wine are it seems you need: great terroir in the soil composition, dry farmed old vines not planted too close and properly trained, good canopy management, pruning, and thinning of bad grape clusters, a Mediterranean climate with cooler nights than most of the Mediterranean region. Biodynamic agriculture that you let be fallow for years between planting grapes. Some good rain, but no hail, and certainly no rain near harvest. Hand harvested grapes picked at night or early in the morning. A nice gentle press like a basket press. A temperature controlled fermenter, native wild yeast, gentle punch downs with no pumping overs but maybe a certain amount of stems, whole cluster, and/or grape skins. Not too much new oak for the elevage and maybe some of it that is in concrete tanks or amphora for a minimum of 18 months; I’m still learning.
I do think Constellation is moving towards becoming a luxury brand (they are going to need some strong marketing after being a plonk maker for so long). While there certainly is a class signifier from showing up to a party with Arbor Mist, I don’t think someone buys Schrader, Mondavi, and Opus if you don’t want to move in that luxury direction. I actually read they are going to stop making or sell Arbor Mist and all wine under $11, forlorn. I guess I’m trying to do my best not to be fooled by marketing and especially not the marketing aimed at conspicuous consumption. I hate that LVMH champagnes are so renowned around here and keep rooting for the récoltant manipulant (I have bought quite a bit of Comtes). I’ve never had a properly aged Dom or Cristal and probably never will though–so I don’t know. Maybe ignorance is bliss.
Maybe I’m conflating Veblen goods with my egalitarian anti-Aristocracy view but I would prefer to never give a penny to anyone on similar lists as these: France’s top 10 richest drinks barons - Page 3 of 11 - The Drinks Business (sorry it’s a slide show)
See the very end of my post just above. I am conflating some things. I do see LVMH as the worst offender of specifically marketing as conspicuous consumption and would especially hope not to support that (including Ruinart). While Mondavi and Guigal do make some plonk, they also unfortunately own To Kalon and the Lala’s (in my opionion, lala’s are a Veblen good), respectively. While I left Jadot out of this rant, as they certainly don’t fit, those huge négociants seem to equally provoke my ire and hopefully never get a penny from me. If you’re a huge negociant that also makes lalas…
We can change it to Armand de Brignac.
While there is no specific price point that can be identified as the dividing line between a Veblen good and a normal product, it may be safe to assume that a Veblen good is generally priced exponentially higher than a basic product in the same category.
It’s an interesting question and certain wines probably qualify as Veblen good’s, demand has increased as prices have increased. In my world, I used to get more offers at lower prices, but now that the wines are “it” wines prices have doubled and tripled and I get offered less and less. My incomplete list would include mostly Burgundy:
DRC (across the lineup but especially RC and La Tache)
Rousseau Chambertin and Beze
Roumier BM and Musigny
Coche (across the lineup but especially the CC and MP)
Leroy
Jayer
Truchot
Raveneau (Le Clos is getting there)
Petrus but not necessarily all the first growths.
(Certain vintages of first growth Bordeaux qualify, but I’m not sure that as a blanket statement all the first growths qualify as Veblen goods.)
I posted something above about that and how much it’s dropped in price as it’s losing it’s Veblen good status due to the boycott–therefore proving it was a Veblen good (less so now). It’s funny that is the example given on Wiki as Roederer is one of the last négociant manipulant that is still family owned and has not been bought by a luxury products company.
Wow. Ok. Interesting perspective.
I had to look that up. Wow! That has to be the ugliest and most gaudy wine bottle I’ve ever seen. If it tastes good, it could be top contender for this thread and the fugly label thread:
https://wineimport.discoursehosting.net/t/great-wines-fugly-labels/148858/63
They should make a Cuvee Trump edition with a gold bottle, an orange spades, and yellow foil.
First of all, Josh, are you saying that showing up at a party with a couple of bottles of Arbor Mist doesn’t make me the coolest cat in the house?? Or should I just avoid the Blackberry Merlot?? Would I be more popular if I took my commemorative decanter of Apothic??
Second, isn’t it the point of luxury brands to create Veblen Good?? Take some brass, some leather and make a bag out of it with an easily identifiable mark on it. Get housewives from Asia to line up at your boutique for their allocation and life is good! Why not wrap some leather and metal around a bottle and add $75 to the bottle price??
Third, I don’t know if we can ever determine what wine represents Veblen Good, but we do know that if Thorstein were alive he’d have fun with the wine biz. I’d even go to a wine auction with him.
Finally, Anton D, are those names friends of Rudy the K or brands that Precept has cooked up??
Clearest, simplest description of a Veblen good I’ve ever seen.
Well done.
No and you make a good point - I painted with too broad a brush. But I don’t have an interest in paying several hundred dollars for a bottle that is only costing that much because people want to own that wine and be known to own that wine. Those wines that are good and that are in your range are the antithesis of Veblen goods. They are just good wines and there’s no status conferred in showing off the labels.
Something I’ve noticed is that academics from every field are sneaking into the wine world.
Mel - you’re right, those bastards! We thought it was bad when it was only minerality and taste maps of the tongue.
Now we have wine sociologists!
Actually, it would be interesting to see some articles on the people who posture on wine boards. Like we all do! ![[soap.gif]](/uploads/db3686/original/2X/a/a7ea1fffd3ef237e8f19d17a83270ad8452218ca.gif "soap"){kind=small}
I thought that might be the case; just checking. You and I are in pretty much the same place.
Do you buy wine that is considered a Veblen good?
I don’t buy wines that I consider to be Veblen goods. There’s no widely approved list…although there’re certainly prime suspects as you’ve mentioned, i.e.: Screagle and DRC. I’m not convinced about Cristal. The wine really can be exceptional (tasted the 2008 and 2009 over the past year or two). At $200 - $250/bottle it’s pushing towards the curve…but it’s not particularly high for world class champagne. On the other hand, Bordeaux First Growths are on the curve IMHO. I’m not convinced that Cristal would sell more briskly at $300 or $400/bottle…but I could be wrong.
Where is the line between scarcity and Veblen?
Not sure what you’re asking. I think it’s unknown. Demand and price are the only parameters, independent of supply. Scarcity may or may not contribute.
RT
I think the Veblen territory for wine is actually not at the top end, but in the mid-range. I really don’t think there is more demand for high end burgs (for example) that astronomically in price. But you hear all the time about cases where the price point is felt to be too low to represent the “quality” that’s in the bottle. So price is raised, and the wine actually sells better.
The argument for First Growth Bordeaux as Veblen goods really dates to the period when Chinese buyers first entered the market in a big way. The people with enough wealth to play had to have “the best” and the rising prices validated their choice as “the best” and drove demand and prices higher. Various factors contributed to the end of this period, prices dropped and then stabilized, albeit at high values. I think they are now simply luxury goods with the branding and demand to continue to support high prices, but no longer Veblen goods. Some of the Chinese buyers decided there was too much FG Bordeaux for them to really be “the best” and they turned their attention to certain high end Burgundy.
-Al
I am an economist and I wrote my thesis about the market structure for wine in Norway. While the concept of Veblen goods is pretty easy to grasp, it’s desperately tricky to quantify. I haven’t tasted Armand de Brignac, but I suspect it has an element of Veblen. I agree with Al about First Growth Bordeaux as well…
And while cheap wine may be a Giffen good for an alcoholic, it certainly isn’t for anyone here. Wine certainly isn’t an inferior good for anyone here, which it has to be to be a Giffen good.
Completely agree.
Looking forward to the genus in Burgundy who can jigger the names…
虎
阴茎
Hǔ yīnjīng
Or…
犀牛角
Xīniú jiǎo
Wine as a status symbol is different from many such Veblen items in that it requires specialist knowledge to recognize the item in question. Only a wine geek would be wowed by a La Tâche, Leroy RSV, Henri Jayer anything, etc. Drive a Ferrari down any street and heads will turn. Not that flashing a fancy bottle doesn’t get you cred, of course it does. But only in certain places, among certain tribes. I don’t know, maybe all billionaires take a class on ‘top 20 wine brands you should be impressed by.’