Hostname: page-component-78c5997874-lj6df Total loading time: 0 Render date: 2024-11-19T22:45:20.700Z Has data issue: false hasContentIssue false
  • English
  • Français

A “Sideways” Supply Response in California Winegrapes

Published online by Cambridge University Press:  09 November 2021

Sarah Consoli ,
Elizabeth A. Fraysse ,
Natalya Slipchenko ,
Yi Wang ,
Jahon Amirebrahimi ,
Zhiran Qin ,
Neil Yazma  and
Travis J. Lybbert
Sarah Consoli
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: [email protected].
Elizabeth A. Fraysse
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: [email protected].
Natalya Slipchenko
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: [email protected].
Yi Wang
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: [email protected].
Jahon Amirebrahimi
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: [email protected].
Zhiran Qin
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: [email protected].
Neil Yazma
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: [email protected].
Travis J. Lybbert*
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616
*
e-mail: [email protected] (corresponding author).
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper explores growers’ supply response to the 2005 “Sideways effect” demand shock (Cuellar, Karnowsky, and Acosta, 2009) triggered by the 2004 release of the movie Sideways. We use a modified difference-in-difference approach to evaluate the supply response in California and regional supply response differences within California. We use U.S. Department of Agriculture data for the period 1999–2012 and find evidence of a supply response in the post-release period that is consistent with the “Sideways effect” on wine demand. The positive supply response for Pinot Noir is stronger than the negative response for Merlot and concentrated in lower value Central Valley vineyards. (JEL Classifications: D25, Q12)

Keywords

CaliforniagrapesMerlotPinot Noirsupply responsewine
Type
Articles
Information
Journal of Wine Economics , Volume 17 , Issue 1 , February 2022 , pp. 42 - 63
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of American Association of Wine Economists

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

For their guidance and expertise, we thank Julian Alston, Andy Walker, Jim Lapsley, Daniel Sumner, Olena Sambucci, and the Wonderful Nurseries management team, including Dustin Hooper, Alex Wilbanks, and Dylan Keith. We also thank an anonymous reviewer and the editor whose comments and suggestions helped to improve this manuscript during the review process.

References

Alston, J. M., Anderson, K., and Sambucci, O. (2015). Drifting towards Bordeaux? The evolving varietal emphasis of U.S. wine regions. Journal of Wine Economics, 10(3), 349–378. https://doi.org/10.1017/jwe.2015.29.CrossRefGoogle Scholar
Alston, J. M., Lapsley, J. T., and Sambucci, O. (2020). Grape and wine production in California. In Martin, P. L., Goodhue, R. E., and Wright, B. D. (eds.), California Agriculture: Dimensions and Issues, Ch. 8. Berkeley, CA: Giannini Foundation of Agricultural Economics, University of California, Berkeley.Google Scholar
Bellemare, M. F., and Wichman, C. J. (2019). Elasticities and the inverse hyperbolic sine transformation. Oxford Bulletin of Economics and Statistics, 82(1), 50–61. https://doi.org/10.1111/obes.12325.CrossRefGoogle Scholar
Burbidge, J. B., Magee, L., and Robb, A. L. (1988). Alternative transformations to handle extreme values of the dependent variable. Journal of the American Statistical Association, 83(401), 123–127. https://doi.org/10.1080/01621459.1988.10478575.CrossRefGoogle Scholar
Cuellar, S., Karnowsky, D., and Acosta, F. (2009). The sideways effect: A test for changes in the demand for Merlot and Pinot Noir wines. Journal of Wine Economics, 4(2), 219–232. https://doi.org/10.1017/S193143610000081X.CrossRefGoogle Scholar
Goodhue, R., Green, R., Heien, D., and Martin, P. (2008). California wine industry evolving to compete in 21st century. Calif Agr, 62(1), 12–18. https://calag.ucanr.edu/archive/?article=ca.v062n01p12.CrossRefGoogle Scholar
Jordan, D., Newton, S. K., and Gilinsky, A. (2014). Which wineries did best during the recession? Wine Business Monthly, 21(2), 134–139.Google Scholar
Kelley, K. M., Zelinskie, J., Centinari, M., Gardner, D. M., Govindasamy, R., Hyde, J., Rickard, B., and Storchmann, K. (2017). Consumer preferences for sustainable wine attributes: A conjoint analysis. Journal of Wine Economics, 12(4), 416–425. https://doi.org/10.1017/jwe.2017.40.CrossRefGoogle Scholar
MacKinnon, J. G., and Magee, L. (1990). Transforming the dependent variable in regression models. International Economic Review, 31(2), 315–339. https://doi.org/10.2307/2526842.CrossRefGoogle Scholar
The Numbers, Sideways (2004). Where data and the movie business meet. Financial information. Available at https://www.the-numbers.com/movie/Sideways#tab=summary (accessed July 13, 2020).Google Scholar
Sambucci, O., and Alston, J. (2017). Estimating the value of California wine grapes. Journal of Wine Economics, 12(2), 149–160. https://doi.org/10.1017/jwe.2017.9.CrossRefGoogle Scholar
Smith, R. J., Klonsky, K., Stewart, D., and Sumner, D. A. (2017). Sample costs to produce winegrapes: Chardonnay & Pinot Noir. North Coast Region, Russian River Valley Sonoma County-2016, amended September 2017. Agricultural & Resource Economics, UC Davis. Available at https://coststudyfiles.ucdavis.edu/uploads/cs_public/c6/28/c6287d1a-64b9-4ba6-b8ff-d83d6c0d0a64/amendedwinegrapessonomafinaldraft91817.pdf.Google Scholar
Sumner, D., Anderson, K., Montaigne, E., and Lapsley, J. T. (2010). Special issue: The world of wine: Economic issues and outlook. ARE Update, 13(6), 1–15. Available at https://escholarship.org/uc/item/8fh9k1xn.Google Scholar
U.S. Department of Agriculture (USDA) (1995–2015a). California Grape Acreage Report. Washington, DC. Available at https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Acreage/Reports/index.php.Google Scholar
U.S. Department of Agriculture (USDA) (1995–2015b). California Grape Crush Report. Washington, DC. Available at https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/Crush/Reports/index.php.Google Scholar
U.S. Department of Agriculture (USDA) (2020). California Grape Pricing Districts Map. Available at https://www.nass.usda.gov/Statistics_by_State/California/Publications/Specialty_and_Other_Releases/Grapes/2019GrapeCrushDistrictsMap.pdf.Google Scholar
Veseth, M. (2020). Wine, recession, and coronavirus: This time is different. The Wine Economist, March 17. Available at https://wineeconomist.com/2020/03/17/recession/.Google Scholar
Volpe, R. J., Green, R., Heien, D., and Howitt, R. (2010a). Estimating the supply elasticity of California wine grapes using regional systems of equations. Journal of Wine Economics, 5(2), 219–235. https://doi.org/10.1017/S1931436100000924.CrossRefGoogle Scholar
Volpe, R. J., Green, R., Heien, D., and Howitt, R. (2010b). Wine-grape production trends reflect evolving consumer demand over 30 years. California Agriculture, 64(1). Retrieved from https://escholarship.org/uc/item/7k07b8n8.CrossRefGoogle Scholar
Supplementary material: File

Consoli et al. supplementary material

Consoli et al. supplementary material

Download Consoli et al. supplementary material(File)
File 392.8 KB