Red wine as a merit good

Saturday, July 05, 2008

The red wine provided by Leith’s of London at the Business Studies conference yesterday went down very well at the end of a long week. And travelling home on the train I enjoyed reading this piece in the Economist on the health benefits of a couple of glasses of a decent red! Perhaps we should add red wine to the list of perceived merit goods! Part of the pleasure and benefit comes from anticipating the consumption of a good bottle. And behavioural economists would no doubt tell us that the private benefit is increased simply by thinking the red wine is expensive even if it isn’t! (The power of the placebo applied to wine lovers!).

The American Association of Wine Economists might have something interesting to say about this! And there is a series of articles on wine economics in the latest version of the Economics Journal.

Posted to Market Failure • Merit Goods
Tags: external benefit, wine, placebo, private benefit
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