Unexploited export potential in Italian Prosecco: a gravity analysis of 211 markets, 2018–2025

This thesis examines Italian Prosecco exports to 211 destinations between 2018 and 2025, with the aim of identifying markets that absorb less than their economic characteristics would predict. The dataset is constructed on the universe of World Bank economies rather than on observed flows, and therefore includes 454 zero-flow observations which existing analyses, restricted to the leading markets, do not consider. The gravity model is estimated by Poisson pseudo-maximum likelihood, which accommodates zero flows and does not require the consistency condition that the heteroskedasticity test rejects for the log-linear specification. The threshold above which a gap between predicted and realised exports becomes interpretable is measured by withholding entire destinations from estimation and observing how far the model misses them. The markets Prosecco has never reached prove to hold no commercial potential: they are worth 0.37 per cent of current exports, and ninety-six per cent of that figure is accounted for by territories whose trade is recorded under another jurisdiction or by markets in which the sale of alcohol is prohibited. Potential is concentrated instead in eleven active but under-penetrated markets, worth 142 million euros a year. A counterfactual in which tariffs are set to zero shows that part of the shortfall is associated with trade barriers rather than with commercial factors: four further markets emerge, and the combined gap rises to 293 million.