The land of “oenoeuros”. Wine as the source of regional inflation: the peculiar case of Rioja

How can wine affect the economy of a wine-producing region? Can it produce effects like those experienced in oil-producing countries? Those are the questions addressed in this paper, using Rioja as a case study. During the millennium period, while a structural change was taking place in Rioja wine cluster, Rioja's inflationary pattern also varied from its historical behaviour. While having less inflation than the Spanish average in the 1980s and early 1990s, the Rioja region became the most inflationary Spanish region in the millennium period. Simultaneously, the Riojan wine cluster enjoyed higher recognition in global markets, which encouraged new investments, the growth of the surface under vines and both a higher productivity and higher prices. This paper argues that the unprecedented growth of vine-growing incomes in the period 1995–2007 determined the consumption made by grape producers’ households, and consequently, they also influenced price dynamics in Rioja.