AN ABSTRACT OF THE THESIS OF Garrett Adam Hoemmen, for the Masters of Science degree in Agribusiness Economics, presented on *April 3, 2013 at Southern Illinois University Carbondale. TITLE: REGIONAL WINE QUALITY REPUTATION: THE PERCEPTIONS AND POSSIBILITIES OF THE SHAWNEE HILLS AVA MAJOR PROFESSORS: Dr. C. Matthew Rendleman and Dr. Bradley Taylor There is a growing consumer preference for regional or “"terroir"” based products (Guy 2011). The designation of AVA status has the potential to increase the development of consumer identification with regional wine products. The presence of a distinguishing terroir is one of the prerequisites for the establishment of a federally recognized American Viticultural Area (AVA) (TTB 2012). The TTB granted the Shawnee Hills, located in southern Illinois, this designation at their request in 2006 (MKF 2005). The goal of this project was to determine the economic impact of a regional reputation on a wine-producing region. The project examined two California wine-producing regions progressing in wine quality development and with an established AVA designation and a wine culture in place, the Lodi AVA and the Central Coast AVA. A regression model was used to measure the source of these regions' growth in grower return per ton (price). Our results show the importance of achieving an AVA designation, an increase of $173.73 –- –$179.60 in grower return per ton, as well as the formation of regional wine quality program for that AVA, an increase of $165.81–-– $372.88. A winery competiveness survey was administered to all owner/operators in the Shawnee Hills to determine whether the infrastructure was in place to sustain a regional wine quality program. The results found that Shawnee Hill's AVA winery owner/operators regard increases in regional tourism, growth in the U.S. wine market continuous innovation, unique services and processes, and flow of information from customers to have the most enhancing effects on their businesses, and that confidence/trust in Illinois state political systems, tax systems, and administrative/bureaucratic regulations were the most constraining factors. Further the Shawnee Hills AVA has growing competition, yet consists of innovative winery owners. It may currently lack external financial support, but with a community focus on product differentiation, the Shawnee Hills AVA has a chance to capture a portion of the growing market for regional products.