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Are Consumers Fooled By Expensive Wine Labels?

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Are Consumers Fooled By Expensive Wine Labels?

Some individuals value the finer things in life. However, by what standards are they defining "fine" or "luxury?" Label design? Or price?

Wine, in particular, is one high-culture product whose success has proven to depend in part on its product labeling. While many vintners opt for modern or edgy designs, others adopt a more traditional French appeal.

However, regardless of the style, a recent study by three economic psychologists – Fabian Christandl, Detlef Fetchenhauer and Sebastian Lotz – concluded that consumers are susceptible to the "labeling effect," The Globe and Mail reports. The effect occurs when people evaluate a product's value based on external factors, such as the product label, price or a recommendation.

"[The] findings are not surprising," the news source writes. "If you're a person who likes luxury and who admires people who own expensive things, then you expect expensive wine to taste good and cheap wine to taste bad."

One way that French vintners set apart their wines is by labeling them not based on the type of grape, but by region, such as Vouvray, Gevrey-Chambertin and Côtes du Rhône, The Baltimore Sun explains.