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California’s Wage Rate Policies and Head Lettuce Prices

Author

Listed:
  • Hamilton, Lynn
  • McCullough, Michael P.
  • Brester, Gary W.
  • Atwood, Joseph

Abstract

We develop an ex ante analysis of labor wage regulatory impacts on the head lettuce industry to estimate the impact of future California wage rate increases. We construct an equilibrium displacement model based on 2006 and 2017 head lettuce case studies to estimate the direction and size of changes in head lettuce quantity and prices given presumed changes in labor costs based on California’s legislated wage rate increases. We find that a 20% increase in the wage rate for California agricultural labor will increase the retail price of head lettuce by 7.7% and reduce the quantity demanded of head lettuce by 4.3%.

Suggested Citation

  • Hamilton, Lynn & McCullough, Michael P. & Brester, Gary W. & Atwood, Joseph, . "California’s Wage Rate Policies and Head Lettuce Prices," Journal of Food Distribution Research, Food Distribution Research Society, vol. 51(2).
    • Handle: RePEc:ags:jlofdr:305484
    DOI: 10.22004/ag.econ.305484
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    References listed on IDEAS

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    1. Diane Charlton & J. Edward Taylor, 2016. "A Declining Farm Workforce: Analysis of Panel Data from Rural Mexico," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 1158-1180.
    2. Boys, Kathryn A. & Rickard, Bradley J., 2019. "Theme Overview: Examining Food Loss and Food Waste in the United States," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 34(1), February.
    3. Timothy J Richards, 2018. "Immigration Reform and Farm Labor Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(4), pages 1050-1071.
    4. Richards, Timothy J., 2018. "Immigration Reform and Farm Labor Markets," 2018 Annual Meeting, August 5-7, Washington, D.C. 274165, Agricultural and Applied Economics Association.
    5. Hamilton, Lynn L., 2006. "California Institute for the Study of Specialty Crops," Research Project Reports 121622, California Polytechnic State University, San Luis Obispo, California Institute for the Study of Specialty Crops.
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