> Another example is that Australians drink higher-quality Californian wine than Californians, and vice versa, because it is only worth the transportation costs for the most expensive wine.
> Another example is that Australians drink higher-quality Californian wine than Californians, and vice versa, because it is only worth the transportation costs for the most expensive wine.
Maybe it's a branding thing, and French wine's got enough power in that department that they don't need to send us good stuff to move product, at least at the lower end. Maybe with some French writing on the label low-price-shopping consumers are equally likely to buy it whether or not it tastes good, so there's no reason to send anything but the worst they have. Other European countries seem to have no trouble shipping us nice wine in the lower price tiers, but then they're not France.
Especially with wine, where it is not actually so clear that a true quality ordering exists, all sorts of other effects are at play. For example, we know how the signaling value of price overrides some true quality variables.
In economics, its important to know these simple models and their outcomes, but it is equally important to know when other effects are at play, or when assumptions do not hold