Politics, economics, and the regulation of direct interstate shipping in the wine industry

In 1986, California passed legislation restricting the direct importation of wine from another state by California residents unless the originating state allowed direct shipment from California wineries to residents in that state. The result has been a patchwork of direct shipment regulations across states. We examine how various economic and public interest factors affect the likelihood that a state adopts a change in its direct shipment regulation and the nature of that change. Our results suggest that private and public sector economic considerations lie at the root of direct shipment regulations in the wine industry.