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The Economic Impact of the Wine Industry on Hotels and Restaurants: Evidence from Washington State*

Published online by Cambridge University Press:  08 June 2012

Karl Storchmann
Karl Storchmann
Affiliation:
Economics Department, New York University, 19 W. 4th Street, 6FL, New York, NY 10012, email: [email protected]
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Abstract

Washington State enjoys an extraordinarily fast growing wine industry and is now the second largest wine producing state in the U.S. This paper examines the impact of this growth on the revenue of hotels and restaurants. Employing a dynamic quarterly panel model at the county level we show that the regional reputation as high quality wine county, as expressed by critical wine points in the national wine press, has a significant effect on the tourism industry. For Walla Walla, the most prominent wine county in the state, less than 17% of all restaurant and approximately 40% of all hotel revenue is tied to the wine cluster (2007). However, regional reputation is not long-living and needs constant replenishment. (JEL Classification: R11, R15, Q19)

Type
Articles
Information
Journal of Wine Economics , Volume 5 , Issue 1 , Spring 2010 , pp. 164 - 183
Copyright
Copyright © American Association of Wine Economists 2010

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