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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: seconsoli@ucdavis.edu.
Elizabeth A. Fraysse
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: eafraysse@ucdavis.edu.
Natalya Slipchenko
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: nslipchenko@ucdavis.edu.
Yi Wang
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: yyywan@ucdavis.edu.
Jahon Amirebrahimi
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: jamirebrahimi@ucdavis.edu.
Zhiran Qin
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: zhrqin@ucdavis.edu.
Neil Yazma
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616; e-mail: nyazma@ucdavis.edu.
Travis J. Lybbert*
Affiliation:
Department of Agricultural and Resource Economics, University of California, Davis, One Shields Ave, Davis, CA 95616
*
e-mail: tlybbert@ucdavis.edu (corresponding author).
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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

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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

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