Some friends were buying wine for their wedding from a discount beverage store in Berkeley, CA. So they invited a couple of us over and had a blind tasting of various wines. The best-rated wines were to be the ones they’d purchase for their wedding. Invariably, I picked the cheapest wines. Apparently, I am not alone:
bq. Individuals who are unaware of the price do not derive more enjoyment from more expensive wine. In a sample of more than 6,000 blind tastings, we find that the correlation between price and overall rating is small and negative, suggesting that individuals on average enjoy more expensive wines slightly less. For individuals with wine training, however, we find indications of a positive relationship between price and enjoyment. Our results are robust to the inclusion of individual fixed effects, and are not driven by outliers: when omitting the top and bottom deciles of the price distribution, our qualitative results are strengthened, and the statistical significance is improved further. Our results indicate that both the prices of wines and wine recommendations by experts may be poor guides for non-expert wine consumers.
Here is the paper.
[Hat tip to Freakonomics. Be sure to read Steven Levitt’s personal anecdote.]
[ADDENDUM: See Seth Roberts’ explanation for the behavior of Levitt’s colleagues.]