Does wine have a low 'diminishing return' threshold? Over the last year I've been getting more into wine, but not too extensively, only having bought bottles in the range of about $10 - $20 cdn. I've also sampled a good number of wines while dining out.

The thing I'm noticing is that while different wines most certainly have unique characters depending on sweetness, grape, and aging, the variation in overall quality doesn't seem to be too high.

As far as I can tell wine, broadly speaking, can be broken down into two categories: good or cheap. A wine is either pleasant, or noticeably low quality, without much room to really go above and beyond.

So if my assumption is correct then 'fine wine' is a bit of a scam, as the diminishing returns price point seems fairly low.

I wonder, though, am I correct in my assumption about wine's diminishing return threshold?
I can answer this... once you get above about $20 a bottle is not proportional to the value you get out of it. The flavors/tastes simply don't give you the value above that range. A $100 or $1000 bottle of wine starts to get into veblen goods territory. Production costs simply stop contributing to the price on the self above this point. I've tasted several 100 point rated wines and thought where is the emperors new clothes!?!? OK, have tasted one wine that was $10000 a bottle and 230 years old from Madeira that absolutely blew my socks off but those are rare. 

Veblen Goods from Wikipedia:


  A price increase may increase that high status and perception of exclusivity, thereby making the good even more preferable. At the other end of the spectrum, with luxury items priced equal to non-luxury items of lower quality, all else being equal more people would buy the luxury items, even though a few Veblen-seekers would not. Thus, even a Veblen good is subject to the dictum that demand moves conversely to price, although the response of demand to price is not consistent at all points on the demand curve.