Demand for Chilean Wine

Is it the result of a move down the demand curve or a shift in the conditions of demand? Either way sales of Chilean wine in the UK have jumped sharply higher in recent days. Several supermarkets have reported a big hike in sales as the world’s watched the life-affirming rescue of the 33 miners from deep underground.

The rise in demand hint at one aspect of behavioural economics - namely the impact on demand that emotional impulses can have as well as the heightened saliency of the issue in people’s minds when they go shopping. The wave of goodwill towards Chile for the rescue may extend to a wider range of their consumer exports! The increase in demand reflects both a change in consumer preferences (perhaps short term only) and also some clever marketing and pricing by supermarkets. Many chose to introduce 25% discounts last week and emailed their customers with the news.