Washington State University


The Bottom Line

Any system-level study requires the integration of economic impacts. Economic research on supply and demand for hops and mint has been quite limited.  Hinman (1999, 2004) reported costs of production for hops, Folwell et al. (United States Hop Industry and the Volume Control Provisions of the United States Federal Hop Marketing Order, Agricultural Research Center: Washington State University, 1982) studied marketing orders for hops, and Balagtas et al. (2006) examined cartel prices for marketing orders for spearmint. But as we began our course of research in the fall of 2009, little or no empirical information had been reported on supply or demand for hops or mint with which to estimate economic impacts. Our economists have been working to fill that critical void.


Progress to Date

Moving Forward

A central economic challenge in a project of this nature is to consistently estimate demand parameters. With respect to mint and the chewing gum market, the estimation has two challenges: (1) the correlation between prices and market-specific demand shocks, which are included in the econometric error term, and (2) the large number of own- and cross-price elasticities implied by the large number of gum flavors.

Knowledge of demand parameters and consumer preferences for mint will help U.S. mint oil producers to realize the importance of high quality mint oil in the production of final goods and their relative position with respect to the use of lower quality mint oils.


Progress to Date

Moving forward

A central economic challenge is to assess the impact of supply shocks (i.e., water stress), which can impact the quantity and quality of hops production. With the foundation information we have collected and structured thus far, we have the basis to begin this task. Scanner data is also being collected in an effort to better understand the relationships between hop varieties and beer demand. The scanner data for beer is just becoming available, and its feasibility for this study will be known soon.



Washington State IPM Coordinator, WSU Irrigated Agriculture Research & Extension Center, Prosser WA 99350, 509-786-9287