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Abstract

We estimate the county-level impacts of direct-to-consumer (DTC) agricultural production on two food and beverage retail subsectors in Arkansas, Louisiana, Oklahoma, and Texas using a first-difference model. We test for the endogeneity of DTC agricultural production by using a drought index and the lagged value of DTC production as instruments. We find that DTC agricultural production impacts the food services and drinking places subsector (which includes restaurants). This effect on food retail sales is positive in metropolitan counties and negative in nonmetropolitan counties. Our results inform planners about the complementarity between local agricultural production and food retail sectors.

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