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The Value of Good Neighbors: A Spatial Analysis of the California and Washington State Wine Industries

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  • Nan Yang
  • Jill J. McCluskey
  • Michael P. Brady

Abstract

The fact that wineries tend to cluster can be partially explained by the terroir of those areas. However, a gap in our understanding of the spatial relationships among wineries remains. In this article, winery-level data from California and Washington State with GIS coordinates are utilized to examine the spatial relationships among neighboring wineries. Spatial effects are assessed by performing clustering tests based on wine prices and tasting scores. A spatial-lag model is then estimated to test whether there are positive effects from neighbors in a hedonic price estimation. The results indicate that strong and positive neighbor effects are present.

Suggested Citation

  • Nan Yang & Jill J. McCluskey & Michael P. Brady, 2012. "The Value of Good Neighbors: A Spatial Analysis of the California and Washington State Wine Industries," Land Economics, University of Wisconsin Press, vol. 88(4), pages 674-684.
    • Handle: RePEc:uwp:landec:v:88:y:2012:iv:1:p:674-684
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    Cited by:

    1. Kelly Grogan, 2015. "The value of added sulfur dioxide in French organic wine," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 3(1), pages 1-25, December.

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    More about this item

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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