Price is what you pay. Value is what you get. -Warren Buffett
There has been an ongoing debate over the differences between cheap and expensive wines. Many casual drinkers are unable to discern the difference most of the time, while connoisseurs claim they can immediately tell them apart. So this then brings up the question of whether price dictates the quality and value of a wine.
Now as can be imagined, there is no easy yes or no answer to be had here. Some people don’t care of a wines bouquet, finish, or whether it’s been decanted or not. They simply want something to drink that isn’t beer or hard liquor. Others need certain wines to compliment dinner or desert. While there are those that want the golden grails of wine, ones with a rich aroma, deep colors, a reputable vintage, and has a lasting finish.
So how then can we determine whether a wines price dictates its quality and value? The quick answer is you can’t simply because people have different tastes. There are some who may prefer the taste of cheap wine to more expensive ones. But that’s not the answer you came to find out. So let me explain how else the price of wine affects its taste. Though this time, lets try to leave out personal preference and understand how price alone influences perceived value and quality.
If we can recall the quote from Mr. Buffet, we realize that price is separate from value. If it weren’t separate, that would mean anything free would have infinite value because you paid nothing for it. However, we know this not to be true as there are many things in the world that are “free” and you couldn’t pay someone to accept or take. So if price doesn’t directly influence the value and quality of something, what does? The answer to this is an individual overall perception, and perception ladies and gentlemen, is directly influenced by price.
How Price Influences The Perception Of Value
Researches at the Stanford Graduate School of Business performed a case study on how the price of wine directly influences an individual’s perception of its overall value and quality. What they found was that price is not just about inferences of quality, but that it can affect the perceived real quality of the wine as well.
The study was set up with blind taste tests. Where the study subjects were given various wines and told a few facts about each, such as what kind of wine, the vintage, and the cost. They would be given more expensive wines and asked what they thought, and then they were given cheaper wines.
Eventually they got the interesting part where they would be given expensive wines and were told they were cheap, and vice versa. What they found was that the same expensive wines when subjects were told it was cheap would all of a sudden have less favorable remarks. The same held true for cheaper wines that were said to be expensive as the subjects gave better remarks for them.
But the kicker was when subjects were given the same wine twice and told one was expensive while the other was cheaper. Almost 100% of the time, subjects gave the supposed expensive wine better reviews than they did the supposed cheaper one, even though they were both the same. So what this lead them to conclude was that price influenced the perceived value and quality of the wine. It had little to do with anything else such as its type, or vintage. But when a supposed more expensive bottle was offered, it inevitably received better reviews.
So what do we take away from all of this? Does that mean that a cheap wines quality is the same as an expensive one? Certainly not. What this des infer is that when a person purchases something that is more expensive, something that could be considered luxurious, the higher price tag allows people to gain greater enjoyment from it.
This may sound odd, but consider it for a moment. How often do people boast about how much money they spent on something, even though you believe it wasn’t worth it, the buyer is overly happy with their purchase? By spending more money on an item, the buyer may not really think it is intrinsically of higher quality or value, but they receive more enjoyment from it. In essence, price changes people experience with a product, and therefore, the outcomes resulting from consuming that product.
So next time you are considering buying some wine, or any product for that matter, remember that just because it is more expensive doesn’t necessarily make it better. But if you do purchase expensive wine, you will inherently believe is better than it potentially is. So you may find more enjoyment from simply spending more money… and nothing more.
- License: Royalty Free or iStock source: http://www.sxc.hu/
The author of this article is Damien S. Wilhelmi. If you enjoyed this piece you can follow me on Twitter @COSportsZealot. If you are looking for an Online Wine Store, please visit LiquorMart.com.