Wine and Economics

Wine and Economics

Transacting the Elixir of Life

Denton Marks

What is distinctive about the economics of wine? Wine’s health benefits stir debate, but many appreciate life-enhancing qualities from its production and enjoyment. Few products enjoy such wide distribution, rich history, and interest. This book emphasizes microeconomic principles and related research – drawing upon various fields from international trade to public choice, relating economic reasoning to management. Topics range from economic fundamentals to the challenge of knowing what is in the bottle and the importance of wine as a cultural good.

Chapter 2: The relevance of economics

Denton Marks

Subjects: development studies, agricultural economics, economics and finance, agricultural economics, environmental economics, international economics, public choice theory, environment, agricultural economics, environmental economics, water

Extract

When most of us think of wine, our minds do not immediately jump to economics, especially if we have little or no background in the field. However, as the “science of choice”, economic behavior permeates the world of wine. A variety of decision makers populate that sector of the global economy, and decision making is “choice making”. Why is the idea of choice integral to economics? All forms of life must deal with scarcity: they typically lack enough of many things to satisfy completely all that they want or to “make the most” of their opportunities, either now or in the future. Most of economics addresses this challenge from the perspective of humans—how we allocate our spending and our time, how we choose between spending and saving, how we allocate current spending for immediate versus future gratification—but the challenge is pervasive in nature. Animals act as if they make choices—for example, where to settle to economize on their costs of raising a family and finding food and water (see, for example, Alcock 2009). Plants act as if they make choices such as seeking maximum sunlight by turning their leaves toward the sun and developing roots in the direction of moisture (e.g., Chamovitz 2012).

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