Hydroponic systems constitute a growing segment of U.S. vegetable production, offering advantages in input efficiency and year-round cultivation. This paper develops a two-stage analytical framework to examine the determinants of hydroponics adoption and to quantify its prospective market-level implications. In the first stage, two theoretically grounded approximate measures—area-based and operation-based adoption rates—are constructed using publicly available data from USDA NASS, PRISM, EIA, and the U.S. Census. A random forest model is employed to identify key predictors and forecast state-level adoption through 2024. The results highlight distinct adoption mechanisms shaped by demographic, economic, and environmental factors. In the second stage, the predicted adoption rates are incorporated into a partial equilibrium supply model accounting for technological heterogeneity. Simulations estimate the effects on aggregate supply and producer surplus. The framework offers a novel approach for linking technology diffusion with market-level welfare analysis.
