Factors Associated With Price Responsiveness of Concord Grape Growers in New York State
New York State is the second-largest producer of Concord grapes in the US, and economic activities related to Concord grapes have a significant impact on the state. In recent years, there has been a shrinkage of vineyards and land producing Concord grapes, which is acknowledged as the response to the long-last declining prices and shift of consumer preferences. In this study, we surveyed individual Concord grape growers in New York and collected thirty usable responses, which were used to examine factors that are associated with Concord grape growers’ supply response to price changes. We employ t-tests to compare the characteristics that differentiate responsive growers and non-responsive growers. In addition, we adopt the logit model to estimate growers’ responses to different levels of price changes. Based on a study that estimates the supply elasticity of California wine grapes, we utilize a two-stage least squares (2SLS) model to estimate the price supply elasticity of the New York Concord grape growers. We find that Concord grape supply is elastic to price changes in the long run. Lastly, using the estimated supply elasticity and the data from the grower survey, we estimate growers’ acreage and production response to price changes. These findings shed light on the drivers of growers’ production decisions, and can help the industry understand the challenges Concord grape growers are facing.
Concord grape growers; Price responsiveness; Supply elasticity
Gomez, Miguel I.
Turvey, Calum G.; Li, Jie
Applied Economics and Management
M.S., Applied Economics and Management
Master of Science
dissertation or thesis