Should You Invest in an Old Bottle of Whisky or in a Bottle of Old Whisky? A Hedonic Analysis of Vintage Single Malt Scotch Whisky Prices

Abstract

AbstractThis article examines the main determinants of differences in ask prices set by investors for single malt whiskies from Islay in Scotland using an original dataset collected from a web trading platform specializing in whisky investment. We find strong evidence that the vintage age (the number of years between the distillation date and the data collection date) positively affects investor asking prices. More precisely, given that the characteristics of whisky, unlike wine, do not change over time once bottled, we disentangle the vintage age effect by subdividing the vintage age into whisky age (the time spent in the cask) and bottle age (the time spent in the bottle). Our results show that whisky age has a more pronounced impact (8.9% per year on average) than bottle age (6.7%). Other findings include the significant influence of distillery reputation, with a moderating effect for independent bottling (i.e., not in-house by the distiller itself) and a positive impact for cask strength whiskies compared to diluted ones. (JEL Classifications: G11, L15, Q11)