Wine investment and portfolio diversification gains

Research output: Chapter in Book/Conference paperChapter

Abstract

The existing literature on the return to wine is mixed. Some studies have found wine to be an unattractive investment option and others have found wine to be an investment class that provides excess risk adjusted returns. However, provided the return to wine does not have a strong positive correlation with standard financial assets, even if the return to wine is low, it is possible that including wine in an investment portfolio will provide a diversification benefit. Here the repeat sales regression methodology is used to estimate the return to Australian wine, and the return is shown to be lower than for standard financial assets. Several measures are then used to show that despite the return to Australian wine being lower than the return to standard financial assets, wine does provide a modest diversification benefit.

Original languageEnglish
Title of host publicationPrices, Finance, and Expert Opinion
EditorsOrley Ashenfelter , Olivier Gergaud, Karl Storchmann, William Ziemba
Place of PublicationUSA
PublisherWorld Scientific Publishing
Pages337-352
Number of pages16
Volume1-2
ISBN (Electronic)9789813232723
ISBN (Print)9789814740579
DOIs
Publication statusPublished - 21 Mar 2018

Publication series

NameWorld Scientific Handbook in Financial Economics Series
Volume6

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  • Cite this

    Fogarty, J. J. (2018). Wine investment and portfolio diversification gains. In O. Ashenfelter , O. Gergaud, K. Storchmann, & W. Ziemba (Eds.), Prices, Finance, and Expert Opinion (Vol. 1-2, pp. 337-352). (World Scientific Handbook in Financial Economics Series; Vol. 6). World Scientific Publishing. https://doi.org/10.1142/9834