An analysis of apple supply response

An empirical analysis of apple supply response is undertaken by modeling new plantings, removals, and yield. The important determinants of plantings are apple profits, cherry profits, weather, and lagged investment. These variables are highly significant, underscoring their importance in determining new planting decisions. In the removals equation, expected short-run revenues of apples and peaches were the important determinants, and the signs of the estimated coefficients for these variables are consistent with a priori expectations. For the yield equation, price and weather variables are significant, highlighting their relevance in determining apple yield.