-
- Price/Score Ratio Formula for Wines
I am not a mathematician but I wonder if there is a formula to obtain a value rate using price and scores (100/100).
I.e. Wine A costs $20 and gets a score of 90 points and Wine B costs $45 and gets a score of 90 points as well; is there a formula that can tell me (mathematically) that the value of Wine A is higher?
I am sure one of you may have your "home-made formula"
-
1135 - Reply by dmcker, Oct 13.
Ah, but you are assuming that the 'ratings' are mathematically pristine, precisely standard and on a universal scale for every different type of wine... ;-(
-
66 - Reply by Jimmy Cocktail, Oct 13.
Unfortunately, dmcker is correct. Ratings are highly subjective, based on the perceptions of the individual tasting the wine. The best formula out there is still taste, taste, taste.
-
3027 - Reply by Philip, Oct 13.
Snooth uses a formula like that for the recommended wines (it uses snoothrank and is weighted by price), but some people value the $'s higher than the rating, and vice versa, so its quite subjective. We'd make something like this prominent if we thought everyone would agree on the formula.
-
70 - Reply by chadrich, Oct 13.
Yeah, have actually tried this while helping some friends launch a wine consulting business. Virtually impossible. In your example above, it's clear that A is a better value. But what about when A costs $20 and gets a 90, but B costs $45 and gets a 95? How much are those extra points worth? Is the extra $25 too much, a good bargin, or just right? And I'd suggest the difference isn't linear (ie moving from 85 to 90 is likely worth less than moving from 90 to 95).
-
1135
- Reply by dmcker, Oct 13.
But, chadrich, isn't that the nature of luxury markets in any line of goods? Moving from 95 to 99 always costs much more than moving from 75 to 95...
-
70
- Reply by chadrich, Oct 14.
Oh, I completely agree. I probably wasn't clear in what I was trying to say. Was just pointing out that it makes designing any sort of comparison/price:value formula that much more complex. In addition to somehow correlating points to dollars, you'd also have to devise a sliding scale, as a point of movement in the high end of the range would need to have a higher dollar value than a point of movement in the low end of the range. (Hmmm...not sure if that made it any more clear or not...)
-
1738 - Reply by Gregory Dal Piaz, Oct 15.
I am always surprised at how much those last 3 points can cost. 98,99, the magical 100.
One thing that I find fascinating is that different markets value these ratings differently, and it's not necessarily demand driven.
For example take a look at three Robert Parker 100 point wines, and I'm not talking about any of his associates which are also valued differently.
The 2005 Deus ex Machina Chateauneuf du Pape = +/- $400($75 0n release) 540 cases
2004 Chapoutier Ermitage le Meal Blanc= +/- $ $250 ($250 on release) 266 cases
2005 L'Eglise Clinet =+/- $700 ($260 on release) 1000 cases.
So there are 100 pointers and there are 100 pointers.
C'est la vie. I have always said that I am most impressed with wines that got 88 to 90 Parker points. With grade inflation that may mean 88-93 points, but I am lucky that way I guess.
-
73 - Reply by kylewolf, Oct 15.
It is still in the works, but I am modifying a version of Baye's Theorem, an equation used to measure statistical significance. While it still needs tweaking and modifications for vintage vs region, I have put it through a few examples, and the only exception in the equation is for 100pt wines.
I have a meeting to go to, but I will try to post some of the examples later if anyone is interested.
-
73
- Reply by kylewolf, Oct 15.
Baye's Theorum
p(H/E)=(p(H)*p(E/H))/((p(E/H)*p(H) )+(p(E/notH)*p(notH) ) )
p(H)= 1/price (ex. $45, 1/45=.022)
p(E/H)= average rating as a decimal (ex. 95pt=.95)
p(E/notH)= 1-p(E/H) (ex. from above, .95, p(E/notH)= .05)
p(notH)=1-p(H) (ex. from about, .022, p(H)=.978)
For our purposes, this can be equated to
probable value=((1/$)*(pts/100))/(((1/$)*(pts/100) )+((1-1/$)*(1-pts/100) ) )
-
73
- Reply by kylewolf, Oct 15.
for example, lets take the situation put forth by chad rich, a $45 95pt bottle and a $20 90pt bottle.
the equation will give you a number between 0 and 1, the closer to 1, the better the value.
the $45 bottle, comes out to a value of .3174
the $20 bottle, comes out to a value of .3214
now, while the two bottles are VERY close to being the same value, the $20 bottle is a slightly better deal when compared to the $45. My next step in altering the equation is to give a gradient where the consumer can make a difference in the value based on their preference of price vs pts.
