A Regression Analysis of the Number of Establishments in the Florists Industry
A regression analysis of the number of establishments in the florists industry
Industry Description
Operators in the United States florists industry retail cut flowers, floral arrangements and potted plants. They purchase these products from domestic and international firms and sell them mostly to the local population. Currently, the traditional forists suffer from severe competition form online stores and supermarkets. This results in a decreasing number of florists establishments in the United States; in the period of 1993 until 1997, the number of establishments decreased by 2.6 percent (Carree, 2002). This trend became stronger; from 2005 until 2010, the number of establishments decreased by 3.5 percent. (IBIS World, 2010). Since the industry of traditional florists suffers, an increasing number of traditional florists tries to make op for these losses by pooling their forces together and creating a national wire of florists (IBIS World, 2010).Consequently, concentration within this industry might be enforced, leading to higher entry barriers. However, that is not yet the case. According to the Carree (2002), the florists industry has a very low ratio of 1.05 of the number of establishments to the number of firms in 1997. This indicates that firms that own multiple establishments are quite rare in this industry.
In 1997, there were 26,505 establishments in the florists industry having payroll in the US (Carree, 2002). This paper investigates with the help of a regression whether there is a clear relationship between this number of establishments and a number of descriptive variables, arranged per state and if not, whether this creates entry possibilities in the market. The variables considered are taken from Carree (2002). In the last part of this paper, an extra variable, the percentage white persons within the state, is added to the regression.
Regression and Explanation
In order to
Industry Description
Operators in the United States florists industry retail cut flowers, floral arrangements and potted plants. They purchase these products from domestic and international firms and sell them mostly to the local population. Currently, the traditional forists suffer from severe competition form online stores and supermarkets. This results in a decreasing number of florists establishments in the United States; in the period of 1993 until 1997, the number of establishments decreased by 2.6 percent (Carree, 2002). This trend became stronger; from 2005 until 2010, the number of establishments decreased by 3.5 percent. (IBIS World, 2010). Since the industry of traditional florists suffers, an increasing number of traditional florists tries to make op for these losses by pooling their forces together and creating a national wire of florists (IBIS World, 2010).Consequently, concentration within this industry might be enforced, leading to higher entry barriers. However, that is not yet the case. According to the Carree (2002), the florists industry has a very low ratio of 1.05 of the number of establishments to the number of firms in 1997. This indicates that firms that own multiple establishments are quite rare in this industry.
In 1997, there were 26,505 establishments in the florists industry having payroll in the US (Carree, 2002). This paper investigates with the help of a regression whether there is a clear relationship between this number of establishments and a number of descriptive variables, arranged per state and if not, whether this creates entry possibilities in the market. The variables considered are taken from Carree (2002). In the last part of this paper, an extra variable, the percentage white persons within the state, is added to the regression.
Regression and Explanation
In order to
References: Carree M. (2002) Does Unemployment Affect the Number of Establishments? A Regional Analysis for US States Regional Studies 36.4, 389–398 IBIS World (2010), Florists Market Research Report, Retrieved on 30 November from: http://www.ibisworld.com/industry/default.aspx?indid=1096 US Census Bureau (2010), Sate & Country Quick facts, Retrieved on 30 November from: http://quickfacts.census.gov/qfd/index.html Victorian Bazaar (2000), The Language of Flowers, Retrieved on 30 November from: http://www.victorianbazaar.com/meanings.html Wikipedia (2011), English American, Retrieved on 30 November from: http://en.wikipedia.org/wiki/English_American