IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v39y2023i1p65-109.html

Exploring market choices in the US ornamental horticulture industry

Author

Listed:
  • Xuan Wei
  • Hayk Khachatryan
  • Alan Hodges
  • Charlie Hall
  • Marco Palma
  • Ariana Torres
  • Robin Brumfield

Abstract

In 2019, the US ornamental horticulture industry had a farm gate crop value of roughly $17 billion, contributed $348 billion in total output to the nation's economy, and created 2.32 million employment opportunities. However, as the industry matures and reaches a slow‐growing stage, interfirm rivalry may appear among grower firms for marketing channels and sales opportunities. Independent garden centers and retailers report facing increased competition from mass merchandisers. Market channel choices, as part of the competitive strategy, are alternative ways for ornamental production to reach consumers. However, marketing practices of this industry have not received adequate attention from researchers despite the economic significance of the industry. Combining four waves of the National Green Industry Survey from 2004 to 2019, this study provides a comprehensive analysis of factors influencing firms' market participation and market channel choices. Over the survey period, traditional wholesale market channels such as landscape services companies, rewholesalers, and single‐location garden centers have remained mainstream channels. The direct‐to‐consumer (DTC) channel showed the potential to gain significant market share. Thirty percent of the firms participated in DTC channel in 2018, and their sales represent about 22% of total sales by all survey firms. Our empirical results show firms' wholesale market participation and choices of market channels are largely influenced by plant types and firm perceptions (variables potentially affecting firms' assessment of the “size” of their market) and variables approximating the market size such as regional dummies and housing price index, confirming the impact of market size on entry decision. [EconLit Citations: C50, M31, L14].

Suggested Citation

  • Xuan Wei & Hayk Khachatryan & Alan Hodges & Charlie Hall & Marco Palma & Ariana Torres & Robin Brumfield, 2023. "Exploring market choices in the US ornamental horticulture industry," Agribusiness, John Wiley & Sons, Ltd., vol. 39(1), pages 65-109, January.
    • Handle: RePEc:wly:agribz:v:39:y:2023:i:1:p:65-109
    DOI: 10.1002/agr.21769
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.21769
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.21769?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cameron,A. Colin & Trivedi,Pravin K., 2013. "Regression Analysis of Count Data," Cambridge Books, Cambridge University Press, number 9781107667273, Enero-Abr.
    2. Hinson, Roger A. & Paudel, Krishna P. & Velástegui, Marco, 2012. "Understanding Ornamental Plant Market Shares to Rewholesaler, Retailer, and Landscaper Channels," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 44(2), pages 173-189, May.
    3. Ariana P. Torres & Nicholas A. Lancaster & Luiz H. B. Vilas Boas, 2020. "Categorizing Organic Grain Buyers in the Midwestern United States," Sustainability, MDPI, vol. 12(12), pages 1-16, June.
    4. Berry, Steven T, 1992. "Estimation of a Model of Entry in the Airline Industry," Econometrica, Econometric Society, vol. 60(4), pages 889-917, July.
    5. Timothy F. Bresnahan & Peter C. Reiss, 1990. "Entry in Monopoly Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(4), pages 531-553.
    6. Yajuan Li & Marco A. Palma & Charles R. Hall & Hayk Khachatryan & Oral Capps, 2019. "Measuring the effects of advertising on green industry sales: a generalized propensity score approach," Applied Economics, Taylor & Francis Journals, vol. 51(12), pages 1303-1318, March.
    7. Wei, Xuan & Khachatryan, Hayk & Rihn, Alicia, 2020. "Consumer Preferences for Labels Disclosing the Use of Neonicotinoid Pesticides: Evidence from Experimental Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 45(3), September.
    8. Zhang, Xumin & Khachatryan, Hayk, 2021. "Effects of perceived economic contributions on individual preferences for environmentally friendly residential landscapes," Land Use Policy, Elsevier, vol. 101(C).
    9. Chengyan Yue & Ben Campbell & Charles Hall & Bridget Behe & Jennifer Dennis & Hayk Khachatryan, 2016. "Consumer Preference for Sustainable Attributes in Plants: Evidence from Experimental Auctions," Agribusiness, John Wiley & Sons, Ltd., vol. 32(2), pages 222-235, April.
    10. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 977-1009, October.
    11. Tim Landvoigt & Monika Piazzesi & Martin Schneider, 2015. "The Housing Market(s) of San Diego," American Economic Review, American Economic Association, vol. 105(4), pages 1371-1407, April.
    12. Papke, Leslie E & Wooldridge, Jeffrey M, 1996. "Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 619-632, Nov.-Dec..
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toivanen, Otto & Waterson, Michael, 2000. "Empirical research on discrete choice game theory models of entry: An illustration," European Economic Review, Elsevier, vol. 44(4-6), pages 985-992, May.
    2. Victor Aguirregabiria & Pedro Mira, 2007. "Sequential Estimation of Dynamic Discrete Games," Econometrica, Econometric Society, vol. 75(1), pages 1-53, January.
    3. Martin Lábaj & Karol Morvay & Peter Silanič & Christoph Weiss & Biliana Yontcheva, 2018. "Market structure and competition in transition: results from a spatial analysis," Applied Economics, Taylor & Francis Journals, vol. 50(15), pages 1694-1715, March.
    4. Manuszak, Mark D., 2002. "Endogenous market structure and competition in the 19th century American brewing industry," International Journal of Industrial Organization, Elsevier, vol. 20(5), pages 673-692, May.
    5. Zou, Li & Yu, Chunyan, 2020. "The evolving market entry strategy: A comparative study of Southwest and JetBlue," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 682-695.
    6. Aradillas-Lopez, Andres, 2012. "Pairwise-difference estimation of incomplete information games," Journal of Econometrics, Elsevier, vol. 168(1), pages 120-140.
    7. Vishal Singh & Ting Zhu, 2008. "Pricing and Market Concentration in Oligopoly Markets," Marketing Science, INFORMS, vol. 27(6), pages 1020-1035, 11-12.
    8. Pesendorfer, Martin & Schmidt-Dengler, Philipp, 2003. "Identification and Estimation of Dynamic Games," CEPR Discussion Papers 3965, Centre for Economic Policy Research.
    9. Ping Li & Guocai Yu, 2009. "The dynamics of China’s expenditure on R&D," Frontiers of Economics in China, Springer;Higher Education Press, vol. 4(1), pages 97-109, March.
    10. Liu, An-Hsiang & Siebert, Ralph B., 2022. "The competitive effects of declining entry costs over time: Evidence from the static random access memory market," International Journal of Industrial Organization, Elsevier, vol. 80(C).
    11. Joel Waldfogel, 2010. "Who Benefits Whom in the Neighborhood? Demographics and Retail Product Geography," NBER Chapters, in: Agglomeration Economics, pages 181-209, National Bureau of Economic Research, Inc.
    12. Jeffrey P. Ballou, 2008. "Do Nonprofit And Government Nursing Homes Enter Unprofitable Markets?," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 241-260, April.
    13. Catherine Schaumans & Frank Verboven, 2008. "Entry and regulation: evidence from health care professions," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 949-972, December.
    14. Sridhar Narayanan, 2013. "Bayesian estimation of discrete games of complete information," Quantitative Marketing and Economics (QME), Springer, vol. 11(1), pages 39-81, March.
    15. Sridhar Narayanan, 2013. "Bayesian estimation of discrete games of complete information," Quantitative Marketing and Economics (QME), Springer, vol. 11(1), pages 39-81, March.
    16. Jeffrey R. Campbell & Thomas N. Hubbard, 2009. "The economics of of 'Radiator Springs:' Industry dynamics, sunk costs, and spatial demand shifts," Working Paper Series WP-09-24, Federal Reserve Bank of Chicago.
    17. Paul Ellickson & Beresteanu Arie, 2005. "The Dynamics of Retail Oligopolies," 2005 Meeting Papers 829, Society for Economic Dynamics.
    18. Waldfogel, Joel, 2008. "The median voter and the median consumer: Local private goods and population composition," Journal of Urban Economics, Elsevier, vol. 63(2), pages 567-582, March.
    19. Catherine Schaumans & Frank Verboven, 2015. "Entry and Competition in Differentiated Products Markets," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 195-209, March.
    20. Wan, Yuanyuan & Xu, Haiqing, 2014. "Semiparametric identification of binary decision games of incomplete information with correlated private signals," Journal of Econometrics, Elsevier, vol. 182(2), pages 235-246.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:39:y:2023:i:1:p:65-109. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.