AAWE Papers in Portland: Health Information and Wine Choice

May 22, 2008, by  Karl Storchmann (Journal of Wine Economics)

During the past decade, it seems, we have been inundated with information regarding the health benefits or dangers of wine. However, associating wine and health is not new.  The medical profession has recognized the healthful and nutritive properties of wine for thousands of years. Hippocrates recommended specific wines to purge fever, disinfect and dress wounds, as diuretics, or for nutritional supplements, around 450 B.C. On the Mosel, many vineyard names are health related. Bernkasteler Doctor or Trittenheimer Apotheke (pharmacy) are just a few examples.

Most of the pathogens that threaten humans are inhibited or killed off by the acids and alcohols in wine. Because of this, wine was considered to be a safer drink than much of the available water up until the 18th century.

Wine is a mild natural tranquilizer, serving to reduce anxiety and tension. As part of a normal diet, wine provides the body with energy, with substances that aid digestion, and with small amounts of minerals and vitamins. It can also stimulate the appetite. In addition, wine serves to restore nutritional balance, relieve tension, sedate and act as a mild euphoric agent to the convalescent and especially the aged.

French paradox
Only when CBS’ news magazine "60 Minutes" reported in November, 1991, the phenomenon that has come to be known as the French Paradox did popular thinking of wine as medicine rather than toxin begin to return. Typically, the diet of people in Southern France includes a very high proportion of cheese, butter, eggs, organ meats, and other fatty and cholesterol-laden foods. This diet would seem to promote heart disease, but the rate there was discovered to be much lower than in America; herein lies the paradox.

Anti-Cancer & Coronary Benefits
Moderate consumption of red wine on a regular basis may be a preventative against coronary disease and some forms of cancer. The chemical components thought to be responsible are catechins, also known as flavanoids and related to tannins . Catechins are believed to function as anti-oxidants, preventing molecules known as "free-radicals" from doing cellular damage. One particular form of flavinoid, called oligomeric procyanidin, recently proved to prevent hardening of the arteries.


There are also compounds in grapes and wine (especially red wine, grape juice, dark beers and tea, but absent in white wine, light beers and spirits) called resveratrol and quercetin. Clinical and statistical evidence and laboratory studies have shown these may boost the immune system, block cancer formation, and possibly protect against heart disease and even prolong life.

One recent study, published in the 2004 year-end edition of the American Journal of Physiology, indicates that resveratrol also inhibits formation of a protein that produces a condition called cardio fibrosis, which reduces the heart's pumping efficiency when it is needed most, at times of stress. More evidence suggests that wine dilates the small blood vessels and helps to prevent angina and clotting. The alcohol in wine additionally helps balance cholesterol towards the good type.

Research is ongoing and it is a mistake for anyone to radically change their consumption pattern based on preliminary data. A study of obese mice showed that doses of resveratrol prolonged their lifespans, but for a human to duplicate this prescription using wine, he would to drink over 250 gallons per day!

 

On the other hand, many of these studies have been heavily criticised. Some of the older studies have been attacked by critics who charged that the results were biased because the abstainers studied included many people who were not drinking because they were already in bad health, or were possibly abstaining alcoholics. Others point at the income bias. Wine drinkers have higher incomes than the rest of the population and live a healthier life in general.

 

AAWE Economics Paper: Consumer Choice

Whatever the truth is, the arrival of new information influences our choices. When the news is out that red wines prolong you life -- who wants to stay with white wine or even beer?  Among the 14 sessions at the Second Annual Conference of the American Association of Wine Economists in Portland from Aug 14-16, 2006, one is entirely devoted to “health and wine”; of course, from an economics point of view.  


Brenda Dyack of the Australian Bureau of Agricultural and Resource Economics (ABARE) and Ellen Goddard of the University of Alberta at Edmonton, examine the influence of health information about red wine on consumption for Ontario, Canada, from 1991 to 1998. They find that about 25% of the increase in red wine consumption is due to new information about red wines’ beneficial health impact. Not bad, if you think what that means in terms of dollars.

 

Here is their abstract:

This paper describes applied econometric research that tests the commonly-held hypothesis that information change concerning the relative health benefits of consuming red and white wine caused a switch in preferences from white wine to red wine.

A significant effect of health information change on consumer choice of red versus white wine is estimated.  Approximately one half of the change in demand over the period 1991 to 1998 in Ontario, Canada is estimated to have been caused by a combination of the ageing of the post war “baby boom” generation and the change in health information provided by newspapers. The results are based on the following: 

- Measurement of the flow of new information about the health impact of consuming wine;

- Development of Health Information Indicators for All Wine and for Red Wine based on the measured health information flow; and, 

- Estimation of the impact of health information change on consumption of four wine types (red and white domestic and imported wines) using a two-stage translog demand model for wine that incorporates the Health Information Indicators.

The approach to measuring information change developed here is novel; however, it is an extension of the method used by others who have previously developed proxy variables for the quantity of health information change based on counts of articles. The new method involves scoring the flow of information.  The score reflects both the quantity and the quality of the information provided.

This paper provides evidence to support the widely-held belief is that red has been substituted for white wine due to increasing evidence that red wine provides cardiovascular health benefits. Although there seem to have been many reports linking red wine consumption to better health and it may seem like an obvious cause and effect situation, until now, there has been no significant empirical evidence to support the claim. The results provided here indicate that consumers have made a significant and sustained change in behaviour in response to information they received about healthy food choices.  This means that consumers have:

- Received enough information to induce a change in their beliefs;

- Trusted the information they received;

- Changed their attitudes/beliefs about the good; and,

- The change in attitude has been translated into an effective and substantial change in demand for red and white wines.

The implications of this kind of consumer response to information change for consumers, governments and producers are not trivial.  For other goods, recent concerns about food safety and other health consequences of consumption have highlighted the impact of consumer purchasing decisions on consumer health, producer profits and government responsibility for reporting on health impacts of food consumption. The Health Information Indicators developed here provide a refinement of the way information change is measured and incorporated into food demand models. Hence, these improved methods can contribute to better-informed policy choices.

A further, if less surprising result, is that the switch from white to red wine is associated with an ageing population.  Anecdotally, we know that typically, one matures from sweet whites and soft drinks to full bodied reds and scotch. The results here indicate that ageing dominates health impacts although it is expected that the ageing impacts embody some reaction to health information as well.

 

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