Some good news on the faculty pay issue

6/25/2010: From Dana Tims in the Oregonian:

A sagging national economy, paired with distributors’ moves to drop even established Oregon wine accounts, means all of the new wine coming into the pipeline now must be sold in-state — an unlikely prospect given that the number of Oregon wineries has roughly doubled in the past five years alone.  “The amount of fruit that’s going to go unpicked this year is staggering,” Hatcher said. “For the industry, it’s going to be cataclysmic.”

I think those economists call this an increase in consumer surplus. This should reduce the pressure to do something about UO’s low faculty pay. Sure, it’s 79% of our comparators, and housing costs are 140%  – but we’ve got decent pinot noir for $7.99, and no sales tax. The question is how this will affect grappa prices. Your answer should include figures and a brief explanation. Hint: substitutes or complements in production? In consumption? Does the fact that grappa is typically drunk within the year, not aged in barrels, matter for your results?