A weekly(ish) notebook on the economics of food, drink, and place
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In parts of rural America, a dollar store isn't competition for the grocery store. It's the replacement. New research from my own university shows why that matters.
Next PostApril 26, 2026 · Post #2
Two bottles of Chianti. Same grape. Same region. One costs $11 and the other costs $18. What you're paying for is more interesting than you think.
Read this post →April 25, 2026 · Post #1
European wine exports to the United States fell 11% in January 2026. Italian wine got hit even harder. The numbers tell a story anyone paying attention already suspected — but there's more underneath the headline than meets the eye.
Read this post →April 26, 2026 · Post #2
Geographical indications are one of my key areas of interest, and they'll come up often in this blog. Consider this a primer (and maybe a bookmark) if you plan to follow along.
There's a wine shop near my house (or rather just over the state line) where you can buy two bottles of Chianti. One costs $11 and the other costs $18. Same grape: Sangiovese. Same region: Tuscany. Same basic winemaking tradition stretching back centuries. So what's the $7 difference?
Last week I wrote about the decline in European wine exports to the U.S. That shift was driven by tariff uncertainty, front-loaded imports, and what looks like a genuine erosion of market share. But trade statistics are aggregates. They tell you that less wine is crossing the Atlantic Ocean at lower prices. They don't tell you why a particular consumer reaches for one bottle instead of another, or what's actually encoded in the price she pays.
That's a different question, and it starts at the shelf.
The $18 bottle carries a Denominazione di Origine Controllata e Garantita. That DOCG designation means that (1) the grapes were grown in a legally defined zone, (2) the wine was made according to specific production rules, and (3) an independent body verified compliance. The $11 bottle is a broader appellation with fewer restrictions, a larger production area, and less specificity about where and how. The U.S. has a similar system using American Viticulture Areas (AVAs; think Napa, Sonoma, and Columbia Valley), which involve similar regional requirements but less rigid oversight (more on that in future posts).
What you're paying for, in economic terms, is information. The designation reduces your uncertainty about quality. It signals something credible because a regulatory framework backs it up. It's not just a winemaker's marketing copy, but a system of geographic delimitation, production standards, and third-party certification that has legal teeth.
This is what economists call a credence attribute. Unlike the color of the wine (which you can see) or the taste (which you can evaluate after buying), the provenance and production method are things you mostly have to take on faith. Geographical indications exist to convert that faith into something verifiable. One of the most daunting aspects of wine for new consumers is precisely this uncertainty: you don't know the quality of what you're about to buy, you may not be able to judge it while you're drinking it, and by the time you've finished, the bottle is empty and you don't know what you should think. Geographical indications establish a trust infrastructure that eliminates some of those concerns, or at least tempers them.
Here's where it gets interesting. Whether the wine tastes $7 better is an entirely separate question, and the research on this is humbling. In blind tastings, the correlation between price and perceived quality is shockingly weak. Trained panels do somewhat better, but ordinary consumers? They're essentially guessing. Some studies have found a slightly negative correlation between price and enjoyment when the label is hidden.
But put the labels back on and everything changes. The correlation between price and reported satisfaction becomes strong and positive. Brain imaging studies show that identical wine activates more pleasure-associated neural activity when subjects are told it's expensive. The label doesn't just describe the experience. It changes the experience. The information is part of the product. It is wrapped up not only in the sensory world, but also those of culture and identity.
This is not an argument that geographic designations are a scam. In fact, it is the opposite. It's an argument that they are doing exactly what economic theory predicts: providing a credible quality signal in a market plagued by asymmetric information. The fact that the signal also shapes subjective experience makes it more powerful, not less. You enjoy the wine more because you trust where it came from. That trust has a price, and the market has figured out what it is.
I keep coming back to geographical indications because they sit at the center of almost everything I study. They're about information economics, consumer behavior, trade policy, rural development, and cultural preservation all at once. The same logic that explains the $7 gap between two Chiantis also explains why Parmigiano-Reggiano commands a premium over generic Parmesan, why Cinta Senese pork costs three times as much as commodity pork in Siena, and why the EU fights so aggressively to protect GI designations in trade agreements.
It also connects directly to the export story from last week. When European wine loses ground in the American market, the pain isn't distributed evenly. Conventional, commodity-tier wines (the ones competing on price with California, Chile, and Australia) take the biggest hit. But wines with strong geographic branding, the ones whose labels do the most informational work, tend to be stickier. The designation provides a moat, if you will. Not an impenetrable one, but enough to matter.
That's the margin again. The $7 difference isn't just a price gap. It's a measure of how much credible geographic information is worth in a market full of noise. And right now, in a trade environment defined by uncertainty, that kind of clarity has never been more valuable.
Beer follows a very different model, where styles and sensory elements often take precedence over geographical indications. When I travel to Belgium in the coming weeks, we'll visit some Trappist breweries and a biannual lambic festival where geography still holds sway.
April 25, 2026 · Post #1
Image: Freerangestock.com
European wine exports to the United States fell 11% in January 2026 — down to about €1 billion, a loss of roughly €127 million compared to January a year earlier. Italian wine got hit even harder: exports dropped nearly 19% in value, with shipments to the U.S. cratering by more than a third. The European Commission's latest Agri-Food Trade Monitor tells a story that anyone paying attention to the transatlantic wine trade already suspected was coming, but the numbers still sting.
I read reports like this differently than most people do. I don't just see a headline about trade decline. I see a natural experiment — messy, uncontrolled, playing out across thousands of decisions made by importers, distributors, restaurateurs, and consumers in real time. I see price signals and substitution effects and information asymmetries tangled up with politics and tariff threats and the peculiarities of how wine moves across borders. I see, in other words, economics.
That's what this blog is about.
I'm an economist at the University of Tennessee at Martin, where I hold an endowed chair in free enterprise and entrepreneurship and direct something called the Economics and Business Innovation Lab. My research sits at the intersection of applied microeconomics, food and agriculture, and consumer behavior — which is a formal way of saying I study why people pay what they pay for the things they eat and drink, and what happens to markets when the rules change.
I also happen to care a great deal about wine. And beer. And cheese, and cured meats, and the way food systems are embedded in the places that produce them. This isn't a hobby that runs parallel to my academic work — it is my academic work. I've published on how regional wine designations affect prices. I'm currently studying geographic indication price transmission for heritage meat products in Tuscany. In a few weeks I'm heading to Belgium to visit lambic breweries and Trappist abbeys, and this fall I'm taking my family to Siena for a semester where I'll be teaching wine economics and food marketing while living inside one of the world's most storied food cultures.
So when I read that European wine exports to the U.S. dropped by €127 million in a single month, I don't experience it as an abstraction. I think about the Chianti producer I met outside Siena whose entire export strategy depends on the American market. I think about the importer in New York trying to decide whether to absorb a tariff or pass it through. I think about the consumer in Nashville staring at a shelf where the $14 Sangiovese she used to buy now costs $18, and whether she'll switch to something from Paso Robles instead.
Here's what makes the January 2026 numbers particularly interesting — and particularly tricky to interpret. A big part of the year-over-year decline isn't really a decline at all. It's a hangover.
In early 2025, importers rushed to bring European wine into the U.S. ahead of anticipated tariffs. Euronews reported that U.S. imports of Italian sparkling wine surged 41% in November 2024 alone, far outpacing consumer demand, as importers stockpiled inventory against an uncertain policy environment. Industry data showed U.S. wine imports up 8.6% in Q1 2025 — a bump widely characterized as strategic front-loading rather than genuine demand growth. That front-loading inflated the January 2025 baseline. So when you compare January 2026 to that artificially high number, the drop looks more dramatic than the underlying demand shift probably warrants.
This is a classic problem in economic measurement: the comparison period matters enormously, and policy uncertainty doesn't just change behavior in the future — it changes behavior now, which distorts the data you'll use later to figure out what happened.
But strip away the base effect and there's still a real story here. Volumes to the U.S. fell 16%. Prices fell 19%. That combination — less wine moving at lower prices — suggests something beyond a timing adjustment. It suggests that European wine is genuinely losing ground in the American market, at least at the margin. The question is whether that's a temporary response to trade policy noise or the beginning of a structural shift.
I have my suspicions, but I'll save those for future posts. What I will say is this: wine is one of the most interesting products in all of economics. It's an experience good — you can't fully evaluate it until you consume it. It's a credence good — much of what you're paying for (terroir, tradition, regulatory compliance) you have to take on faith. It's wrapped in layers of geographic branding, cultural signaling, and regulatory architecture that vary enormously across countries. And it's subject to trade policy decisions made by people who, in many cases, don't drink it.
I'm calling this blog Marginal Indulgence because it captures exactly where I live, professionally and otherwise. In economics, "marginal" means the next unit — the next dollar, the next bottle, the next decision at the edge. That's where the interesting action happens, not in grand theory but in the small choices that aggregate into markets. And "indulgence" is the subject matter: wine, food, beer, cheese, the things we consume not just for sustenance but for pleasure, for culture, for identity. The margin is where a Chianti becomes a Chianti Classico, where a farmstead cheese becomes an artisan product, where a small-town brewery decides whether to distribute beyond the county line. Every one of those transitions is a marginal indulgence — one more degree of care, specificity, or cost that someone decided was worth it.
Expect short posts — maybe 800 words, maybe fewer — about the economics of food, drink, and place. I'll write about wine, obviously, but also beer, regional food systems, geographic indications, entrepreneurship, and whatever catches my attention at the grocery store, in a trattoria, or in a dataset. Some posts will connect to my published research. Some will be dispatches from the field — Belgium this spring, Siena this fall. Some will just be me thinking out loud about why a gelato costs what it costs in Florence versus Siena, or what happens to a rural Tennessee county when its only grocery store closes.
I'll try to write the way I wish more economists would: clearly, without jargon, and about things that actually matter to people who eat. Which is everyone.
Welcome to the indulgence.