Date of Award

8-2017

Document Type

Thesis

Degree Name

Master of Arts (MA)

Department

Economics

Committee Member

Dr. Thomas Hazlett, Committee Chair

Committee Member

Dr. Robert Fleck

Committee Member

Dr. Babur De Los Santos

Abstract

I present a concise history of brewing industry concentration from the late 1800s to the present. The economic history of beer in the United States provides an interesting study of the impact of regulation, market power, and innovation on industry. Prohibition, the subsequent growth of the leading macro brewers, and the recent emergence of import and small craft brewers have shaped the industry into what we know today. Upon their emergence, craft breweries exhibited a fervent growth in the West and Northeast regions of America, but have been slow to establish a presence in the Midwest and South. To put this into perspective, the two states that sandwich Colorado in population are Minnesota and South Carolina. As of 2017, Colorado boasts 284 craft breweries with Minnesota and South Carolina at just 105 and 36 breweries respectively (Brewers Association). The confluence of events and economic factors that are responsible for the gap between the South/Midwest and Northeast/West regions have received little attention in the literature. Regulatory burdens, restrictions on the sale of alcohol in the form of dry and semi-dry counties, religious ideals, and dominant cultural mores all contribute to this gap. For my empirical analysis, I sharpen my focus on the role that regulations have played in the organization of craft breweries across the states. I find that regulatory influences are significantly related to both production levels and number of craft brewers in the market, regardless of geographical region. This finding suggests that regional differences can be partially explained by different state regulations.

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