Perverse demand

What is perverse demand?
Quite simply, the more something is expensive, the more people want it.

What are normal demand and perverse demand? Please give examples. | Homework.Study.com

It sounds kind of sick, pretentious, or just plain stupid, but I admit to succumbing from time to time.
Let me explain.
It’s not trophy wines I’m talking about. That’s for rich people or wannabes ;-). I’m talking about walking into a store and seeing a selection of wines from a region you don’t know (for me, that would be Languedoc or Sicily, for instance) and *assuming* that the most expensive wines are probably the best. And purchasing the wine accordingly – even though I*know* that the relationship between price and quality is only loosely proportional.
I persuade myself to take the risk that the higher market price will reflect something a cut above.

I am especially prone to this when travelling in a vineyard region where none of the wines are really very expensive. So, I figure I might just as well buy the costly ones to take back with me…

Obviously, if someone at the store is there to offer advice, or I can somehow evaluate the choice of wines, I can purchase more intelligently. But this is not always possible.

Any of you get taken in by this phenomenon?

Best regards,
Alex R.
 
This reminds me of a story of Chinese wine that launched at (I think) $500 a bottle in order to appear luxurious. In marketting circles I believe it is called the Chivas Regal effect - it doesn't matter what the quality is, people will buy because they see the price as indicative of quality, even if the two are not linked. Having never drunk Chivas Regal I have no idea if the name is apt!

I must admit to getting lured in by this on things I have no experience of, usually when buying gifts for others unfortunately.
 
Veblen goods. I do wonder if some trophy wines are in / heading towards this.

I think choosing the higher priced wines in an unknown region, in the lack of other information, is not unreasonable. If you think of the regions you do know this law largely holds true. Or at least significantly decreases your chance of getting a dud.

Although possibly exclude those at the far end of the bell curve.
 
For Languedoc, it in general has been the opposite. Producers made a luxury cuvée with lots of oak, extract, and alcohol and charged lots of money for them. For a long time, I had a rule that paying above $20 for a Languedoc wine probably meant you were getting glorified plonk. Now that's probably up to about $30. (There are some exceptions, but not many.)
 
And from a different angle: no one denies that Egon Müller makes fantastic wines. But when you compare current prices with other top Saar producers, e.g., von Oethegraven, von Hövel, van Vloxem, Lauer, Nik Weis, and the still-a-great bargain Schloss Saarstein, it just doesn't make sense. In fact, many Saar producers say that the greatest vineyard in the Saar is not Scharzhofberg, but rather Altenberg and that von Oethegraven has the prime portion (although van Vloxem makes fabulous wine from there, too).
 
In a vinous sense Claude I think you hit the nail on the head. The most expensive wine that truly expresses the native grape and wine style of the region is a safe bet, but this is rarely if ever the most expensive wine on offer. That tends to be ‘more’ powerful/alcoholic/oaky/extracted, dare I say ‘international’? Backed up by a recent lunch where a friend very generously brought along a Gaja brunello which had nothing whatsoever to do with sangiovese clones or tuscany and everything to do with oak regimes and people who like a certain style across the board.
 
This reminds me of a story of Chinese wine that launched at (I think) $500 a bottle in order to appear luxurious. In marketting circles I believe it is called the Chivas Regal effect - it doesn't matter what the quality is, people will buy because they see the price as indicative of quality, even if the two are not linked. Having never drunk Chivas Regal I have no idea if the name is apt!

I must admit to getting lured in by this on things I have no experience of, usually when buying gifts for others unfortunately.
Chivas Regal is now very inexpensive when 'on offer' as it usually is. It used to be a luxury label. Very decent value now though I wish everything wasn't bottled at 40%.
 
The high-pricing strategy doesn't always work. Back in the 1980s, I think, Warsteiner beer entered the US market with a large, costly advertising campaign touting that it was the most expensive beer in Germany. It never really made a dent in the US market.
 
Chivas Regal is now very inexpensive when 'on offer' as it usually is. It used to be a luxury label. Very decent value now though I wish everything wasn't bottled at 40%.
I buy Strathisla cask strength single malt whiskies as this distillery is part of the blend for Chivas. That would, I believe, be more to your liking.
 
For Languedoc, it in general has been the opposite. Producers made a luxury cuvée with lots of oak, extract, and alcohol and charged lots of money for them. For a long time, I had a rule that paying above $20 for a Languedoc wine probably meant you were getting glorified plonk. Now that's probably up to about $30. (There are some exceptions, but not many.)
Clos de Fees Le Petit Siberie springs to mind. 12 years ago tasting it at the winery in a test tube at 200 euros and thinking it was glorified rocket fuel. I passed by the winery the other day chuckling to myself.
 
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I'm not convinced Alex's examples are of Veblen goods or perverse demand. The test for those things is whether demand in general increases as the price increases.

Alex, on the other hands, writes of comparing wines being offered for sale and the assumption that the more expensive ones are better.

In the absence of other information, Alex's assumption is neither unreasonable or perverse, but may of course be wrong. If he had better information he may make another choice.

With Veblen goods the quality is of minor importance. It is the social caché of owning something expensive that counts - snob value if you like
 
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