The impact of policy intervention on international wine demand

Allen Liu, Anyu Liu, Xiaoying Jiao, Zhen Liu

Research output: Contribution to journalArticlepeer-review

7 Downloads (Pure)

Abstract

Purpose
The purpose of the study is to investigate the impact of implementing anti-dumping duties on imported Australian wine to China in the short- and long-run, respectively.

Design/methodology/approach
First, the Difference-in-Differences (DID) method is used in this study to evaluate the short-run causal effect of implementing anti-dumping duties on imported Australian wine to China. Second, a Bayesian ensemble method is used to predict 2023–2025 wine exports from Australia to China. The disparity between the forecasts and counterfactual prediction which assumes no anti-dumping duties represents the accumulated impact of the anti-dumping duties in the long run.

Findings
The anti-dumping duties resulted in a significant decline in red and rose, white and sparkling wine exports to China by 92.59%, 99.06% and 90.06%, respectively, in 2021. In the long run, wine exports to China are projected to continue this downward trend, with an average annual growth rate of −21.92%, −38.90% and −9.54% for the three types of wine, respectively. In contrast, the counterfactual prediction indicates an increase of 3.20%, 20.37% and 4.55% for the respective categories. Consequently, the policy intervention is expected to result in a decrease of 96.11%, 93.15% and 84.11% in red and rose, white and sparkling wine exports to China from 2021 to 2025.

Originality/value
The originality of this study lies in the creation of an economic paradigm for assessing policy impacts within the realm of wine economics. Methodologically, it also represents the pioneering application of the DID and Bayesian ensemble forecasting methods within the field of wine economics.
Original languageEnglish
Number of pages24
JournalInternational Journal of Contemporary Hospitality Management
Early online date2 Jan 2024
DOIs
Publication statusE-pub ahead of print - 2 Jan 2024
Externally publishedYes

Cite this