Book review – American Wine Econonmics

As wine becomes more a part of new world lifestyle it shouldn’t come as a surprise that a discipline based on the study of wine economics has emerged.

By using the term discipline I refer to the study of wine economics as a scholarly subject. A public demonstration of this development has been the popular web blog,, published by emeritus professor of political economy at the University of Puget Sound, Mike Veseth. Veseth has published some 400 postings over the past 6 years, he has over 1600 subscribers and receives over 20,000 visits to his site each month. These are not top-of-the-chart numbers but remember we are writing about the economics of wine, not wine itself. As an extension of his blog, Mike has written two books, one of which I reviewed a number of months ago, Wine Wars, which describes the segmentation of the wine market and predicts trends for the evolution of this segmented market.

The study of wine economics is growing such that there are now both American and European Associations of Wine Economists and scholarly papers are published by members on such topics as Wine Pricing, Agency Costs, Vertical Integration and Ownership Structure: The Case of Wine Business in France, Women in Top Roles in the Winery Industry: Forging ahead or falling behind?, Wine Tax Reform: The impact of Introducing a Volumetric Excise Tax for Wine, and so on. This is not trivial stuff.

Similarly wine business programs have been offered for many years at universities in wine regions around the world and these are growing in number and range of offerings to include MBA degrees in wine at some elite schools.

To a degree the disciplines of wine economics and wine business studies are a logical evolution as a reflection of such things as the growing academic study of the biology of grapes and the advanced technologies of wine making.

At the same time the economic impact of the wine industry has become visible as a public policy matter and there is a recognition that grape growing and wine production and distribution are important factors to the local economy in those regions where wine is made.

This brings me to the topic of this brief, namely a new book that I have recently read, American Wine Economics (AWE). This is an excellent book that is eminently readable despite its title and which is much broader in its relevance than to the USA only or to wine economists.

The author of AWE is James Thornton, a professor of economics at the University of Eastern Michigan. He has written a book that is a comparative page-turner and which calls for almost no prior knowledge of economics to be understood and enjoyed.

Thornton explains the importance of the wine industry in the Introduction.

• There are over 7,000 wine firms in the USA, a number which has grown annually by 7% in the 10 years since 2002.
• Wine is made in all 50 states and 12 states have over 100 wineries.
• Each year roughly 30 million people visit wineries as tourists.
• The dollar value of grape production is higher than for any other fruit grown in the USA.
• Wine-related activity accounts for over 1 million jobs and the wine economy generates over $160 billion in outputs.
• 100 million Americans drink wine including some 11 million who consume wine daily.
• Per capita wine consumption has increased annually since 1994 and continued to increase through the economic collapse of 2008-09.

Wine is an important economic engine in the USA and it is growing in its importance as more Americans discover wine and as they consume more of it. Hence Thornton believes the study of wine economics will become more important and considers an understanding of this aspect of the industry to be fundamental to policy makers, growers, producers and interested consumers.

The book considers the economics issues from several perspectives: grape growing and grape markets, wine production, bulk wine and wine alcohol, wine distribution and government regulation, the wine-firm and its behavior, the wine consumer and his/her behaviour and, globalization.

The breadth of economics as interpreted by Thornton is comprehensive and a reader will derive a comprehensive understanding of markets, behaviours, industry structures and linkages in a painless and interesting package. Thornton is a master at presenting complex material in an easily-absorbed manner and he does so without dumbing it down or appearing condescending. I suspect he is a very good teacher.

This is an important book for readers who want to learn more about the dynamics of the wine industry, for students who need to understand the industry for study purposes and for general readers who simply seek a good read.

This is one of the best books I have read in a long time.

à bientôt…
Copyright© W. John Switzer 2003 – 2014.


Author: John Switzer

I am wine writer, educator and tour guide. From 2005 to June 2014 I published a bi-weekly newsletter, the Winesights Vintages Newsletter (WVN). This Newsletter was closed in July 2014 when the Government of Canada put in place the onerous administrative requirements of Canada's Anti-Spam Legislation. The legacy of WVN continues on this blog spot where I post wine-related articles as well as reviews of a small selection of best-value wines from each bi-weekly LCBO Vintages release. I hold the WSET Diploma, I am a WSET Certified Educator, I teach in the WSET program at the Independent Wine Education Guild in Toronto where I am the past Director of the WSET Diploma program. Since 2010 I have been a judge at Decanter World Wine Awards on the Rhône panel and I am a member of the Society of Wine Educators.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s