Preamble: because it’s Friday, I’m ending this week’s series of posts with wine. This post is about price, and how it changes the way we experience things.
In my last year of high school, I was part of the Toastmasters’ Society. During one of the last meetings of the year, after everyone had finished turning 18 and legal, there was an annual wine-tasting.
How that wine-tasting rolled out:
- There were a selection of cheap wines, and a selection of moderately-priced wines.
- These were all presented with either great flourish or profuse disgust, as demanded by the price-tage on the label.
- We were all asked to maintain ratings sheets.
- And if this sounds like a set up – it was.
- Almost no wine was in its original bottle.
Inevitably, wines poured out of moderately-priced bottles received higher ratings than the wine in the cheaper bottles.
And what followed was the great reveal – where everyone was universally “wrong” except for those members that had already been victims in the previous year’s event.
Wine: The Price Is Not An Indicator
Two conclusions from this wine-tasting experiment:
- People are herd animals that respond to signals #sheeps; and also
- Wine pricing is arbitrary and has little to do with the quality of the wine.
This – this has troubled me.
Not least because I now treat any and all wines with great suspicion. Although this has created the general impression that I have a discriminating palate, so I can thank Toastmasters for that. But it does make one unpopular when one’s host opens a prized bottle and one pronounces it vinegar.
Here is a youtube clip from Vox.
Good news! It turns out that expensive bottles of wine taste better because your brain activates differently when it already knows that the bottle of wine is expensive.
Meaning that: there is no such thing as a blind-taste test. When you taste blind, you are not drinking in the same way. In fact, you are drinking badly. Because as it turns out, here are the ingredients necessary for tasting wine:
- A nose, for the bouquet;
- A tongue, to catch all the hints of obscure spice and vegetable;
- An eye, to inspect the clarity; and
- A primed and prejudiced mind, because that will change the way that your neurons interpret parts 1 through 3.
If you drink wine and you’re missing the prejudice, it’s the same as trying to drink wine with a blocked nose.
To quote Dumbledore:
“Of course it is happening inside your head, Harry, but why on earth should that mean that it is not real?”
Also, if you do happen to serve cheap wine, just tell everyone that it’s really expensive.
It might just work.
Rolling Alpha posts opinions on finance, economics, and sometimes things that are only loosely related. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha. Also, check out the RA podcast on iTunes: The Story of Money.