California’s Wage Rate Policies and Head Lettuce Prices

Lynn Hamilton, Michael McCullough, Gary W. Brester and Joseph Atwood

Journal of Food Distribution Research, vol. 51, issue 2

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%.

Keywords: Demand and Price Analysis; Labor and Human Capital (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlofdr:305484

DOI: 10.22004/ag.econ.305484

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