The latest Men's Vogue has a rather interesting article (not online) by Jay McInerney on a small group of real estate moguls who like to drink very, very expensive wine. For these oenophiles, a 1982 Romanee-Conti is a young wine - even their champagne is typically several decades old - and a $500 bottle is borderline plonk. It's not uncommon for these winos to consumer $30,000 worth of rotten grape juice at a single dinner.
Not surprisingly, these expensive wines are often highly praised, with descriptions that feature some very purple prose. And while I would certainly love to drink a 1945 Pol Roger, or a 1982 Burgundy, it's been well documented that a significant percentage of such vintage bottles are actually counterfeit. And yet, I'd wager that even the fakes taste extremely delicious when poured from the proper bottle.
Consider this experiment, led by researchers at Cal-Tech: Twenty people sampled five Cabernet Sauvignons that were distinguished solely by their retail price, with bottles ranging from $5 to $90. Although the people were told that all five wines were different, the scientists weren't telling the truth: there were only three different wines. This meant that the same wines would often reappear, but with different price labels. For example, the first wine offered during the tasting - it was a cheap bottle of Californian Cabernet - was labeled both as a $5 wine (it's actual retail price) and as a $45 dollar wine, a 900 percent markup. All of the red wines were sipped inside an fMRI machine.
Not surprisingly, the subjects consistently reported that the more expensive wines tasted better. They preferred the $90 bottle to the $10 bottle, and thought the $45 Cabernet was far superior to the $5 plonk. By conducting the wine tasting inside an fMRI machine - the drinks were sipped via a network of plastic tubes - the scientists could see how the brains of the subjects responded to the different wines. While a variety of brain regions were activated during the experiment, only one brain region seemed to respond to the price of the wine, rather than the wine itself: the orbitofrontal cortex (OFC). In general, more expensive wines made parts of the OFC more excited. The scientists argue that the activity of this brain region shifted the preferences of the wine tasters, so that the $90 Cabernet seemed to taste better than the $35 Cabernet, even though they were actually the same wine.
Of course, the wine preferences of the subjects were clearly nonsensical. Instead of acting like rational agents - getting the most utility for the lowest possible price - they were choosing to spend more money for an identical product. When the scientists repeated the experiment with members of the Stanford University wine club, they got the same results. In a blind tasting, these "semi-experts" were also misled by the made-up price tag.
What does this have to do with the oenophiles profiled in the McInerney article? I think it's clear that a big part of the pleasure of consuming such outrageously expensive wines has to do with the price tag. (Just imagine how excited the OFC must get when tasting a $10,000 bottle.) I'm not saying these wines aren't delicious or worthy of praise. But would they be as delicious if they didn't cost more than a small car? I think not.
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I've often felt that a lot of really expensive stuff just doesn't make sense. It's hard for me to imagine every choosing to buy a Bugatti Veyron - a snip at just over 1m Euros. Objectively, it's just not good value for money. I'd rather have a BMW M3, or a nice Aston Martin. Or both and a nice house.
Same for silly wine and whiskey. Even at the lower end I've never seen the point of things like Middleton whiskey at over a grand when I can pick up a bottle of the extremely good Redbreast in my local supermarket for around 25 quid.
But if it really does taste better for knowing that it's so expensive, maybe it is worth it. Taste's all in the mind, so it doesn't really matter that it's subjective.
As someone raised almost exclusively on generic branded food, why am i never approached for these studies?? I'd love to see how the "derision" centers in my brain light up upon being told i'm consuming $90 wine. Even $45 is far above what i'm willing to pay.
But i suppose if all of us eccentric data points got in the studies, we wouldn't be eccentric any more ;)
My first thought was, "What's the big deal about a 1982 Burgundy?" My second thought was, "Oh, God, I'm really, really old."
In fact, I'm pretty sure I've had a 1982 Burgundy. I dare say it was probably better than the 1979 Chateau Boone vin du fraises I got sick on in high school.
This just goes to show the remnants of Puritanism in our culture. Rather than just enjoy cheap wine, we need to create a spectacle of sacrifice (of money) to get any pleasure. Its like good old Dimmesdale in the Scarlet Letter--whipping himself after an unholy tryst with Hester. One could say he was flogging himself as a punishment, but it is just as likely that it added to the pleasure. Maybe a hyperbolic example, but certainly the amount we sacrifice to feel pleasure is related to the amount of pleasure we feel.
My 2004 Chateau de Chien Fou brings me to epicurean bliss every time.
There seem to have been a slew of fool the wine drinkers tastes of late. We never see the comparative taste/cost merits of colon cleansers. OK, so Consumer reports conducts more frequent testing of premium ice cream than frozen Brussels sprouts.
Did none of the test participants get the least bit suspicious when asked to imbibe through a tube inside an fMRI rig? (No, the new and more expensive donut hole rig makes the wine taste so lovely, really...).
No wonder other animals mock us.
The oenophile who taste tests with eyes shut could save a bundle.
The Thunderbird grand cru... exquisite, maybe not.
My brother's highest wine rating goes to the bottles that friends bring for dinner parties. Free is quite tasty.
I don't think sacrifice and stupidity are so closely bound as McFawn suggests (and Hawthorne so ably documents in much of his writing), but the idea that paying in advance to be allowed to experience pleasure is so human, for some humans. There is also the pleasure of watching some fool waste his money on an overpriced toy and the comeuppance sequel of disappointment. It's all about pleasure.
And which brain real estate lights up when a subject feels the full effect of being cheated?
Yttrai, no one asks eccentrics anything. We skew the data.
On the rational agent idea: Maybe they are acting as rational agents if you view the decision as a "Lemon Problem," for lack of a better term. The idea is that consumers make decisions using the knowledge of what all possible outcomes are and an estimate of the probability of each outcome. They make the decision based on the estimated utility of the product they are buying. In this case, the wine buyer knows that only wines that meet their quality requirement will be sold at the price given and they are wiling to pay the additional money from what the wine is worth for this guarantee.
In making their judgement in the blind taste test, they use the same logic to rate the wine. Very few low-quality wines will be sold for $45, while many low-quality wines are sold at the $5 price level. As the subjects did not have the discerning taste to make their judgement with, they used what information they had about the quality of each wine.
Yeah... I'm a Neuroscience major that has also taken an Econ class.
@SimonG
You can fool most wine drinkers. There are so many producers that it's difficult for any single connoisseur / expert to differentiate between producers, much less between vintages of different producers. There's an information deficit.
Whisky though, has many fewer producers, all of whom produce a distinctive (-ish) style which can be identified fairly easily. Some of these are better than others, so of course command higher prices. Plus you have the rarity value of closed distilleries... I disagree with you in the main - more expensive whisky generally tastes better (the correlation is strong, probably over 80%). There's far less pricing inefficiency in whisky, due to the greater level of information.
As you rightly point out, some prices are stupid, and you'd be better off with a Redbreast than Johnnie Walker Blue Label. But an Oban 32 yo blows Redbreast out of the water for 80% of drinkers, and in my opinion represents far better value for money at 12 times the price.
The thing you have to remember about these people is that they have vastly more money than you or I. They probably sign the slips for their triple-platinum, no-limit credit cards with diamond encrusted platinum Cartier fountain pens. Does a diamond encrusted platinum Cartier fountain pen work better than a Bic biro? No significantly...
It's all about status display. That's what they're paying for - not the wine itself. To ask whether these purchasing decisions are rational in the conventional economic sense is to completely miss the point. The whole point of spending $30,000 on wine is to demonstrate that you can afford to spend $30,000 on wine.
People tend to value things that cost a lot. The boot camp sergeant says 'the harder I make it the better your going to feel about it later'. The higher cost in blood, sweat and tears translates into fond memories and a feeling you 'did something'.
In this society money is the surrogate of the blood, sweat and tears'. Similarly tossing pennies out a window lends no thrill. Doing the same with $100 dollar bills is wasteful but evokes a much deeper response. Perhaps not if your a billionaire.
Marketers have long known that often you can make a product sell better, and certainly make a better profit, if you raise the price. Multiply the price and suddenly something people took for granted takes on subtle qualities as people pay attention. You can see this at work at most any 'water bar'. Toss bit of decent tap water into the bottle of a $100 a bottle brand and people will gush on in gushing prose about its subtle nuances and satisfying aftertaste.
I suspect people who are most prone to this sort of thing have an exaggerated external locus for validation. Everyone feel a bit better with nice surroundings. But some are more dependent on their surroundings and external cues to feel good about themselves.
at least these people (those who purchased it intentionally that is) are honest with themselves. :)
http://latimesblogs.latimes.com/technology/2008/08/iphone-i-am-ric.html
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at least these people (those who purchased it intentionally that is) are honest with themselves. :)
expensive wine is to understand that I have not retained in the stomach 1 hour for pleasure, I pity this much money
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The thing you have to remember about these people is that they have vastly more money than you or I. They probably sign the slips for their triple-platinum, no-limit credit cards with diamond encrusted platinum Cartier fountain pens. Does a diamond encrusted platinum Cartier fountain pen work better than a Bic biro? No significantly
In this society money is the surrogate of the blood, sweat and tears'. Similarly tossing pennies out a window lends no thrill. Doing the same with $100 dollar bills is wasteful but evokes a much deeper response. Perhaps not if your a billionaire
That settled it! There won't a second time when I foolishly broadcast opinions without backing them with hard evidence.