The Welfare Impacts of Bird Damage and Its Control in California Wine Grape Production

We developed a partial equilibrium model to examine the welfare impacts of bird damage and its control in California wine grape production. The model incorporates the impacts of pest damage and its control and allows the impacts to vary regionally. Importantly, the model requires minimal information to apply; only elasticities, current market price and production data, and information on the cost and effectiveness of the pest control methods are needed. We rely on data from a recent survey of California growers and use the model to estimate changes in wine grape prices, production levels, and consumer and producer surplus that result from both bird damage and its control in three grape-growing regions of California. Results suggest that eliminating the threat of bird damage and control costs results in an increase in producer and consumer surplus of 1.3% and 3%, respectively. Furthermore, eliminating current bird control and allowing any resulting damage would decrease producer and consumer surplus by 6.6% and 11.5%, respectively. (JEL Classifications: Q11, Q18, Q57)