Sumeet Gulati

Professor

Relevant Degree Programs

 

Graduate Student Supervision

Doctoral Student Supervision (Jan 2008 - May 2019)
Terroir and reputation : the economics of British Columbia wine industry in three essays. (2017)

Terroir and collective reputations are two principal and interconnected elements believed to influence wine price and sales. In this dissertation, I examine the role of terroir (measurable features of the grape land) and collective reputation (eligibility for Vintners Quality Alliance, VQA) in determining the price, volume, and revenue of wine sales in British Columbia (BC). My research is highly relevant because this New World wine-producing region is currently altering its terroir-based geographical organization and sub-regional collective reputation, and plans to introduce new appellations and sub-appellations. My first chapter provides an empirical overview of the BC wine industry including market structure, market shares, and regulations. My first analytical chapter on terroir consists of using hedonic regression to connect wine prices and terroir. By matching grape and wine production at a micro level, I examine how agronomic characteristics of grape land affect the price of wine due to variation in grape quality. In this analysis, I make an extensive use of a detailed dataset consisting of vineyards' terroir characteristics. In my second analytical chapter of collective reputation, I use a three-stage endogenous dummy variable regression model to identify the average effect of VQA status on the average volume share, the average revenue share, and the average price of wine. I find somewhat limited evidence that vineyards' natural elements are important determinants of the price of BC wine. In my hedonic regression, the factors that seem to matter more are wine variety and brand. I also find that a relatively large number of wine brands represent VQA and that VQA certification positively influences the volume of sales for BC-made wines. My results also show that VQA certification has an insignificant impact on the average price and the average sales revenue of BC-made wines. Therefore, my results imply that VQA certification allows rent dissipation via over-certification. This over-certification allows arbitraging away of producers' rents.

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Master's Student Supervision (2010 - 2018)
Case study on the effectiveness of carbon pricing estimating the impact of carbon tax on natural gas demand [in] British Columbia (2014)

British Columbia’s carbon tax was implemented in July 2008 at the rate of $10 per tonne of carbon. It increased for four consecutive years and reached $30 per tonne of carbon. The rate of carbon tax is based on the carbon intensity of the fossil fuels. The second biggest source of primary energy in North America, natural gas, is subject to 5.7 cents/cubic metre of carbon tax in the province of British Columbia. In this study, we adopt a difference-in-differences technique to examine whether or not the BC’s carbon tax has impacted natural gas consumption in commercial and residential sectors in BC, where it is primarily used for space heating. We assemble a monthly panel data from Statistics Canada and Environment Canada spanning from Jan 1990-Dec 2013 for six provinces: Quebec, Ontario, Manitoba, Saskatchewan, Alberta, and British Columbia. While the coefficient for carbon tax is insignificant in residential sector, we find the elasticity of carbon tax for natural gas to be -0.35 in commercial sector.

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Agricultural nutrient management employing the concept of ecological goods and services : a valuation of ground water quality in Abbotsford, British Columbia (2012)

There is an appetite for market based management mechanisms in agri-environmental policy. The purpose of this study is to explore how the market based concept of ecological goods and services(EGS) can be applied towards the management of an agricultural externality in British Columbia,Canada. Through literature review I establish the importance of valuation in market basedmanagement. With an EGS program in mind I identify the City of Abbotsford as a potential ecologicalservice buyer and establish economic value for improvements to water quality in the Abbotsford-Sumas aquifer. I use a replacement cost approach based on the present value costs of the proposed Stave Lake surface water system. My results suggest that if nitrate remediation and/ or nitrate management practices improve water quality and the costs fall below $168 million there are potential net benefits to the City of Abbotsford. This value could form the basis for a city program or EGS trading scheme to encourage farmers to place a higher priority on water quality in their land management practices. A key finding is that lack of information on the degree to which nitrate contamination constrains well field development limits the ability to conclusively evaluate the net benefits of improved nitratemanagement and proceed with an EGS program.

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Spilt milk : trade liberalisation and the Barbados dairy industry (2012)

Dairying in Barbados is under tremendous pressure. Government reduced its role in the industry during the 1990’s structural adjustment programme. A quota system took effect. Milk production fell nearly 50 per cent between 1992 and 1993. By the end of 2010, 16 commercial dairy farmers remained in the industry – less than half of the 37 registered farmers in 1990. National milk output stood below 7 million kilograms - one-half of the 14 million kilograms recorded in 1991.Farm consolidation is common worldwide. The precipitous drop in milk output that occurred in 1992 Barbados is not. Dairy products constitute a significant part of the local diet and income. Milk remains one of the few agricultural products in which the island claims self-sufficiency. Hiccoughs in this industry trickle down to the larger society making it imperative that difficulties in the industry be identified and addressed. The changing international trade regime, farm management practices, domestic policy and weather patterns all potentially affect economic outcomes. We examine whether moves toward trade liberalisation increased milk-based imports. Our findings show it unlikely for milk-based imports to have been responsible for the 1992 milk production drop. Today, however, the evidence suggests that trade liberalisation is exerting pressure on the local industry. Fresh milk and cream imports rise more than 3 percent after 2000. Imports of milk products that compete with locally produced ones also exhibit signs of increase.Questionnaire-based responses identify structural characteristics of the industry. Survey data indicate high farm-level costs of production - some hovering around US$1 per kg – high prevailing price levels, reproductive and management issues, a paucity of industry support services and industry-specific research, and the absence of independent quality control and quota administration. Evidence of industry distress includes declining farm numbers, low production, and high costs. In short, we examine factors that affect the economics of producing milk in Barbados. We find that the viability of dairying in Barbados depends on successfully dealing with domestic policy and herd management issues, given the shifting trade environment.

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Chasing fossil fuels in the food system (2011)

A carbon tax has already been introduced in British Columbia, Canada. It is likely that other carbon regulations will come into play across the globe shortly. In all likelihood, with the introduction of a domestic agreement pricing emissions, there will be border tax adjustment or other similar policy response proposed. For example, as the European Union (EU) enters the next development phases for their Emissions Trading System, a border adjustment on GHG emissions, also known as a “Border Carbon Adjustment” (BCA) (Fisher and Fox 2009) is being considered. It may work to displace concerns related to domestic competitiveness and carbon leakage from the trade of outsourced goods (including for example food, clothing and cars). In the absence of an international agreement to account for monitoring, pricing or capping GHG emissions, Canada’s response to GHG emissions or Carbon regulations is challenging policy makers. This thesis explores the feasibility of implementing a BCA on a sample of whole foods imported to Canada. It uses numerical industry trade data to create a snapshot of hypothetical Carbon Tariff estimates that reflect GHG emissions from the production and transport of a sample of whole foods imported to Canada. It investigates methods for accounting GHG emissions, trade legalities in the food system and the idealized characteristics of BCA design; it concludes by suggesting a BCA or any other policy tool reliant on GHGe accounting standards could not easily or effectively be implemented as a worthwhile or counteracting response to potential undesirable effects of domestic carbon regulations in any country at this time (2011). Finally, this paper recommends future research in the areas of GHGe accounting standards, food system transparency, product labeling and municipal policy tools as means of reducing GHGe from food production, while avoiding the repercussions of carbon regulations.

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