Publication
Fine wine as an asset: to what extent do U.S. and Eurozone macroeconomic and financial factors explain monthly returns on investment-grade wine?
| Summary: | This thesis examines the extent to which macroeconomic and financial variables shapethe monthly returns of investment-grade wines, using the Liv-ex Fine Wine 100 Index as a reference benchmark. Against the backdrop of increasing financialization in the fine wine market, the study develops an econometric model incorporating twelve key indicators, including equity market performance, inflation rates, interest rates, industrial production, exchange rate fluctuations, and wine-specific demand proxies. Drawing on monthly data from 2002 to 2022, a multiple linear regression framework is employed to quantify these relationships. The findings reveal that fine wine returns are most significantly influenced by financial variables, particularly the S&P 500 and the EUR/USD exchange rate, underscoring the asset’s growing sensitivity to global investor sentiment and currency movements. U.S. inflation also appears as a robust driver, supporting the view that fine wine may offer partial protection against inflation. In contrast, traditional macroeconomic indicators such as industrial production, sector-specific inflation, and import volumes show limited explanatory power, suggesting a disconnect between wine pricing and real economic activity. Overall, the results position fine wine as a hybrid asset class, rooted in tangible consumption but increasingly governed by financial market dynamics. |
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| Main Authors: | Gorjanc, Lucas |
| Subject: | Alternative investments Wine prices Investment-grade wine Financial markets Wine economics Liv-ex index Fine wine returns |
| Year: | 2025 |
| Country: | Portugal |
| Document type: | master thesis |
| Access type: | embargoed access |
| Associated institution: | Universidade Nova de Lisboa |
| Language: | English |
| Origin: | Repositório Institucional da UNL |
| Summary: | This thesis examines the extent to which macroeconomic and financial variables shapethe monthly returns of investment-grade wines, using the Liv-ex Fine Wine 100 Index as a reference benchmark. Against the backdrop of increasing financialization in the fine wine market, the study develops an econometric model incorporating twelve key indicators, including equity market performance, inflation rates, interest rates, industrial production, exchange rate fluctuations, and wine-specific demand proxies. Drawing on monthly data from 2002 to 2022, a multiple linear regression framework is employed to quantify these relationships. The findings reveal that fine wine returns are most significantly influenced by financial variables, particularly the S&P 500 and the EUR/USD exchange rate, underscoring the asset’s growing sensitivity to global investor sentiment and currency movements. U.S. inflation also appears as a robust driver, supporting the view that fine wine may offer partial protection against inflation. In contrast, traditional macroeconomic indicators such as industrial production, sector-specific inflation, and import volumes show limited explanatory power, suggesting a disconnect between wine pricing and real economic activity. Overall, the results position fine wine as a hybrid asset class, rooted in tangible consumption but increasingly governed by financial market dynamics. |
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