When smoke signals economic loss: How wildfires harm Oregon wineries

Abstract

Abstract Wildfire smoke poses a growing threat to wine-producing regions, yet its economic consequences remain less understood. We study the 2020 Oregon wildfire season and estimate its impacts on retail wine sales, prices, and tasting room operations. Exploiting cross-sectional variation in smoke exposure across winery locations, we estimate that a one-standard-deviation increase in September PM 2.5 ${_{2.5}}$ 2.5 is associated with retail sales volume declines of 15%–23% over the following three years, though the year-by-year estimates are imprecise and reach conventional significance levels only in 2023. Effects are the most prominent in Pinot Noir and Pinot Grigio, Oregon's dominant varietals. Smoke also directly reduces tasting room visits and on-site revenue in the month following a smoke event. Our results highlight how wildfire smoke damages wine producers through multiple distinct economic channels and highlight the growing financial exposure of the Oregon wine industry to wildfire events.