[Uncle Erik]

Came across this today (http://freakonomics.blogs.nytimes.com/2010/12/16/freakonomics-radio-do-more-expensive-wines-taste-better/?src=me&ref=general):

Freakonomics Radio: Do More Expensive Wines Taste Better?
By STEPHEN J. DUBNER

Do More Expensive Wines Taste Better?: They should! It’s a cardinal rule: more expensive items are supposed to be qualitatively better than their cheaper versions.

When you take a sip of Cabernet, what are you tasting? The grape? The tannins? The oak barrel? Or the price?

Believe it or not, the most dominant flavor may be the dollars. Thanks to the work of some intrepid and wine-obsessed economists (yes, there is an American Association of Wine Economists), we are starting to gain a new understanding of the relationship between wine, critics and consumers.

One of these researchers is Robin Goldstein, whose paper detailing more than 6,000 blind tastings reaches the conclusion that “individuals who are unaware of the price do not derive more enjoyment from more expensive wine.”

So why do we pay so much attention to critics and connoisseurs who tell us otherwise?

That’s the question we set out to answer in this podcast. Along the way, you’ll hear details about Goldstein’s research as well as the story of how his “restaurant” in Milan, Osteria L’Intrepido, won an Award of Excellence from Wine Spectator magazine. (Not how you think!)

Also featured: Steve Levitt, who admits his palate is “underdeveloped,” describing a wine-tasting stunt he pulled on his elders at Harvard’s Society of Fellows.

Also, you’ll hear from wine broker Brian DiMarco (featured in the forthcoming documentary Escaping Robert Parker) who pulled a stunt of his own on his very wine-savvy employees. DiMarco also walks us through the mechanics of the wine-purchase business, and describes how price is often a far-too-powerful signal to our taste buds.

A couple of very interesting interviews didn’t make the podcast but are worth a mention here. One was with the noted Princeton economist (and wine buff) Orley Ashenfelter*, who spoke about our general overreliance on experts, whether they’re in the wine field or far beyond:

I mean, S&P, Moody’s, Fitch, these people all rated securities that apparently completely tanked. So there’s obviously something in the demand for expertise, the imprimatur, which is not really about the fact that they do a good job. By the way, those organizations are not transparent either, just as the Wine Spectator isn’t. So there’s some similarity here that I think probably gives us a little insight into things that are much broader than wine and food.
The other interview was with George Taber, author of the fascinating book Judgment of Paris: California vs. France and the Historic 1976 Paris Tasting That Revolutionized Wine. He recalled the moment he realized that even the most sophisticated wine experts can have feet of clay:

And there was just one classic moment when one of the French judges by the name of Raymond Oliver, who was the owner of the Le Grand Vefour restaurant, he had a television show on food in France, he was a big thing in French wine and food circles. He had a white wine in front of him. He looked at the white wine, then he held it up to a light to look at the color very closely. Then he took a sip of it. Then he held it up again. Then he said in French, ‘Ah, back to France.’ And I looked down at my scorecard and he’d just tasted the 1972 Freemark Abbey Chardonnay.
Wishing you the happiest of holiday seasons, and urging you to spend $15 instead of $50 on your next bottle of wine. Go ahead, take the money you save and blow it on the lottery.

* You can hear Ashenfelter in a related Marketplace piece that aired recently.

Stephen J. Dubner is an author and journalist who lives in New York City. Follow @freakonomics on Twitter.

 

[InnerSpace]

I saw this today: "Blood type B is found in a much higher percentage (four times as often) in self-made millionaires than in the rest of the population."
 
Also very Dubner/Levitt.

 

[tohenk2]

Of course you have individuals who do not think for themselves. And yes, some prices are inflated - and sometimes that alone is a reason to buy (look - I can afford it! Especially so with drinks it seems.)
 
Why would it be that it is not the same for beer? (open door...)

 

[tmars78]

Quote:

Of course you have individuals who do not think for themselves. And yes, some prices are inflated - and sometimes that alone is a reason to buy (look - I can afford it! Especially so with drinks it seems.)
 
Why would it be that it is not the same for beer? (open door...)

It is the same for more than just beer. But as we all know price does not always constitute great returns. I think UE posted this as analogy towards high priced cabels. When you don't know, or can't see what you are listening to(drinking), you cannot tell cables apart. 

 

[aamefford]

I had a dear friend who is fond of saying "Any wanker can get a great bottle of wine for $100.  It's getting a great bottle of wine for $10 that is the real challenge."  The point being - it can be done, but it takes some tasting

 

[Dynobot]

If the wine tastes bad just drink it faster...

 

[kite7]

I think this is not only for cables, it can be applied to DACs as well as amplifiers. The easiest thing to tell apart from one another are headphones. I bought a APS v3 cable for my RS1 but until I compare it against another RS1, I can't absolutely say the differences are noticeable only using memory as a reference. I know there are those who allow price to dictate how a cable ranks, price bias. I paid a lot, I would want there to be some sound improvement wouldn't I? Who wouldn't?
 
Quote:

 I think UE posted this as analogy towards high priced cabels. When you don't know, or can't see what you are listening to(drinking), you cannot tell cables apart. 

 

 

[poikkeus]

Quote:

I had a dear friend who is fond of saying "Any wanker can get a great bottle of wine for $100.  It's getting a great bottle of wine for $10 that is the real challenge."  The point being - it can be done, but it takes some tasting

I don't know exactly how one would generalize from wine to headphones, but I agree. 

 

[xnor]

Quote:

I think this is not only for cables, it can be applied to DACs as well as amplifiers. The easiest thing to tell apart from one another are headphones. I bought a APS v3 cable for my RS1 but until I compare it against another RS1, I can't absolutely say the differences are noticeable only using memory as a reference. I know there are those who allow price to dictate how a cable ranks, price bias. I paid a lot, I would want there to be some sound improvement wouldn't I? Who wouldn't?

I appreciate your honesty.
 
 
I have to dig up some youtube video that covers price bias iirc, besides why people play in casinos and other interesting stuff. Hope I can still find it.

 

[Uncle Erik]

Price bias applies to pretty much everything in audio, not just cables. I dropped it here because the article discusses blind tests and I figured that would be discussed. 6,000 of them, at that. Nice sized sample and it is pretty clear that people rank wine based on price. It would not be surprising if this doesn't apply broadly to consumer goods.

I think it is sad that people are so swayed by price. Just drop objective standards and make a decision based on what something costs, because price indicates quality. You see it all the time here, "best for $300," "should I spend 25% of the headphone's value on X," "how much do I have to spend for good bass," and so on. It's not about the money, and so few are willing to critically look at gear.

Instead of comparing one $1,000 amp to other $1,000 amps, look at it as a whole. How is it built, circuit used, component quality, reliability, and everything else. You have to look at all of that to make a decision as to whether it is worth buying.

When you really look at gear, you'll find some uncomfortable results. Some really expensive gear isn't much better than the cheap stuff. Same goes for wine. A good friend is a wine distributor and has a frightening amount of knowledge. He's had a lot of the pricey wines, as well. He likes them, but finds it more interesting to hunt down really good ones for $10-$20 or so.

 

[SpiralStatic]

Beats headphones remind me of this. If Beats headphones were only $80, (pretty much what they are worth, maybe even less) than most people would say that they only have an "alright" sound. But slap another $200 on there and you have yourselves the "best" headphones ever!

 

[Vikingatheart]

Quote:

Beats headphones remind me of this. If Beats headphones were only $80, (pretty much what they are worth, maybe even less) than most people would say that they only have an "alright" sound. But slap another $200 on there and you have yourselves the "best" headphones ever!

I completely agree. I brought my PortaPros into my school a couple of weeks ago and let one of my friends try them. I didn't tell him the price, but at first he said they looked like weird pieces of junk. Once he heard some of my lossless files off of my iPhone, his jaw dropped. He moved the left side of his head and asked me how much they cost. I can only guess, but he seemed to be implying he thought they were "mad expensive". Once I told him they were only 30 bucks he simply looked perplexed. People only assume that good things come from spending a lot of money. If its expensive, its gotta be good. 
 
EDIT: Almost forgot! A couple of days later, he listened to a pair of Skullcandies that another student had brought in. I listened to them as well, for it had been a while since I listened to a pair. Just as I remembered, they were pretty awful, but my friend didn't think so. Once he realized the price difference, he thought my Portas we kinda sucky. There was no use arguing. 

 

[khaos974]

The caveat is that you can't generalized either, some of my friends are into blind wine testing (sometimes even double), and while there are some expensive wines that taste very common and some cheap one that are really extraordinary, the all say that the correlation between price and quality is quite good.

 

[xnor]

Here's the video, partly related: http://www.youtube.com/watch?v=c-4flnuxNV4 (there's even wine at 13:15 

)
 
Shows some interesting aspects, even trivial things if you think about it.

 

[Prog Rock Man]

Not just wine, medicine as well.
 
"Cimetidine was one of the first anti-ulcer drugs on the market, and it is still in use today. In 1975, when it was brand new, it eradicated 80% of ulcers, on average, in various different trials. But as time passed the success rate of cimetidine – this very same drug – deteriorated to just 50%.
This deterioration seems to have occurred particularly after the introduction of ranitidine, a competing and supposedly superior drug.
There are various possible interpretations of this finding: it’s possible, of course, that it was a function of changing research protocols. But one possibility is that the older drug became less effective after new ones were brought in, because of deteriorating medical belief in it."
 
From 'Bad Science' by Ben Goldacre.
 
Create belief around a product and it is more effective. Price and how that reflects in value, worth and quality has a huge influence.