Beeronomics

In recent years there has been an important activity in the development of this field of study, which is a fast growing area in the literature of applied industrial organization (IO). I started to be interested in the beer industry because of the early work of Juan Alejandro Correa during the 2000's decade as independent brewer in Colombia. The monotony of mass produced beer and the lack of competition in the brewery industry in Colombia were always interesting elements to think about given my education in economics.

In more recent years, during my PhD program in Washington State University I was immerse in a magnificent environment of home brewers, craft brewers, micro breweries, small regional breweries, etc. Fortunately for me, the US Pacific North-West is one of the regions of the world with more variety of beers and a very dynamic market. I also had the opportunity to have Jill McCluskey as my academic advisor and Committee Chair. Her experience in IO and wine economics together with her enthusiasm about the economics of beer lead me to include this topic as one of my dissertation papers.

My knowledge in the field was also enhanced by the teachings of Bret Noble (home brewer) and Luis Castro, PhD student of the School of Food Science at Washington State University.

Read more about the brewing industry in the U.S. in my blog Laberinto Datoro.

Publications

[Book Chapter] "Economic Perspectives on Craft Beer: A Revolution in the Global Beer Industry" Editors Christian Garavaglia and Johan Swinnen. Palgrave Macmillan. With Chapter 4: The Craft Brewing Industry in Latin America: The Case of Colombia (here).
[Paper] The Craft Brewing Industry in Latin America. The Latin American craft brewing industry has the potential for growth and opportunities for investment, especially in the craft brewing segment. This article highlights the industry as a dynamic sector with growth potential for investors and consumers though discussion of consumption preference in Latin America, as well as the current status of beer industry and craft brewing in the region. Finally, an overview of the potential for growth in craft brewing in Latin America is provided. Document here.
[Paper] The Beer Industry in Latin America. AAWE Working Paper No. 177 – Business. Daniel Toro-Gonzalez. Abstract: This document presents the current state of the brewing industry in Latin America with special attention given to micro brewing firms. We find that the market conditions in Latin America are favorable to significant growth in the brewing industry and particularly for craft and specialty beers. This study draws on a general overview of the industry in the region as well on five different countries. May 2015. Document here.
[Paper] Beer Snobs do Exist: Estimation of Beer Demand by Type, with J.J. McCluskey and R.C. Mittelhammer. Abstract: Although mass-produced beer still represents the vast majority of U.S. beer sales, there has been a significant growth trend in the craft beer segment. This study analyzes the demand for beer as a differentiated product and estimates own-price, cross-price and income elasticities for beer by type: craft beer, mass-produced beer, and imported beer. We verify that beer is a normal good with a considerably inelastic demand and also find that the elasticity of substitution across types of beer is close to zero. The results suggest that there are effectively separate markets for beer by type. Journal of Agricultural and Resource Economics, 39(2):1–14.

Conference Presentations

- - Conference. Presenter at the 153 EAAE Seminar, "New dimensions of market power and bargaining in the agri-food sector" in Gaeta, Italia. The paper is "The Craft Beer Industry in Latin America: Concentration and entry barriers".

- Conference. Presenter at the AAEA Annual Meeting, Minneapolis, USA. "Beer Snobs do Exist: Estimation of Beer Demand by Type" at the session SCANNER DATA IN DEMAND ETUDIES, ISSUES AND SOLUTIONS. July 27-29, 2014.

Substitution between Mass-Produced and Craft Beers. Presented by Daniel Toro Gonzalez at the Fulbright Academy Seminar Series, Washington State University, Feb. 14, 2012. Pullman, Washington. Download the slides here.

Substitution between Mass-Produced and High-End Beers. Presented by Jill J. McCluskey at the Conference on the Economics of Beer and Brewing - Beeronomics: The Economics of Beer and Brewing November, 2011, University of California, Davis. Slides here, program here.

Data

For the paper "Substitution between Micro and Macro Brews" we use data from the James M. Kilts Center, University of Chicago Booth School of Business, available here.