Economics / Philip Armour '07
The Sideways Effect

By Adam Conner-Simons ’08

Philip Armour ’07 is no slouch. A triple-major in economics, mathematics and English literature while at Pomona, he spent the past year working for the Federal Reserve Bank of San Francisco. A master’s at the London School of Economics and then Harvard Law School are next on his plate. Such accomplishments could make it easy to overlook perhaps his most intriguing recent project: examining how a popular movie has changed the wine business.

Armour and his Fed colleague Mark Doms looked into the evidence behind the supposed “Sideways effect,” which claims that since the release of the Pinot Noir-glorifying, Merlot-trashing 2004 indie film, Pinot has soared in popularity while Merlot has crashed and burned. Using data on scores and prices from Wine Spectator and The Wine Advocate, as well as harvest statistics from the annual California Crush Report, Armour and Doms confirm the movie’s effect on Pinot Noir but cast doubt on its connection to Merlot. “That downward trend was actually a long time coming,” says Armour.

Jim Taylor ’84, who co-wrote Sideways and won an Oscar for his work, says that he was quite surprised that his film had such a pronounced influence on consumer preferences for Pinot. “If I had known it was going to have such an effect,” he says, “I would have invested in the industry!”

Sagehen vintners, meanwhile, seem to agree with Armour’s assessment. Tony Soter ’74 of Etude Wines calls the Sideways effect “substantial and a bit amazing.” According to Mary Elke ’69, who grows both Pinot Noir and Merlot grapes at Elke Vineyards in Napa, “everyone says Merlot became the ugly duckling after Sideways, but it was already a victim of its own success in the 90s,” As for the Pinot: “You’d have to be an idiot not to be able to sell it.”

Armour’s paper about the Sideways effect hardly marks his first excursion into wine economics. He says that he developed passions for the two fields from a very early age. “My mother and father are both passionate about wine,” he says, “so my childhood was filled with tiny pours of great Bordeaux and Burgundies.” Although he had dabbled in studying wine economics at Pomona, he says he never anticipated being able to do such research while working for the Fed this year.

He soon found that fellow economist Doms shared with him a “curiosity about the driving forces in wine marketing and production,” and before long the two delved into some studies and uncovered some publishable results. One abstract and introduction later, the pair was co-presenting their paper at the second annual American Association of Wine Economists (AAWE) conference held in Portland, Ore., in August.

“Research in wine economics is fascinating and in such a nascent stage that there’s a lot of potential for change in the near future,” Armour says. “It’s an exciting time to be entering the debate.”