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Abstract
The market for fine wines is characterized by the presence of a variety of players: amateurs, connoisseurs, investors and collectors. These clienteles chose their wines according to their positioning along two complementary dimensions: liquidity vs. rarity, and value-for-money vs. prestige. As a consequence, some fine wines are regarded as “good-value” whereas other are said to be “investable” or even “collectible”. The article then examines the implications of this segmentation on the pricing and performance of fine wines. Our results show that the most investable wines are often too expensive when they start being traded and they consequently tend to underperform during their first ten years on the market, whereas less prestigious wines are initially more fairly-priced. In general, investable and collectible wines deliver higher returns but are also more sensitive to broad economic and financial conditions than good-value wines.