The Economic Impact on the Town of Mancos - Fort Lewis College by chenmeixiu


									                                              Sample Student Project

The Economic Impact on the Town of Mancos

          Mancos Dog Sled Race
            February 9-10 2006
     Evan Bottcher and Renae Durand

           Prepared Under the Direction of
                Dr. Deborah Walker
                 Fort Lewis College
          School of Business Administration

The purpose of the annual Mush Dog Race has been to “. . . promote the sport of stage racing,
boost tourism to the area, produce an annual world class event, increase public awareness of
adaptive athletes and their competitive sport opportunities, and finally, to just have some fun for
everyone involved” ( Mancos, being a host community of this dog
race, has the opportunity to not only take part in a unique and exciting event but also increase
revenue from tourism.

Surveys were administered to the participants, the audience and the organizers of the Mush Dog
Race in order to determine its economic impact on the Town of Mancos [see Appendix A]. The
information gathered also provides the opportunity to better understand how the mush might be
better organized in the future.

First discussed will be the demographic and expenditure information obtained from the mushers,
the audience and the organizers. Next, the analysis of the economic impact is presented. Finally,
comments expressed by those involved in the mush are provided in the Appendix D.

Demographics & Dollars Spent

In order to determine the economic impact of the dog mush we must first evaluate the groups
that spent money in Mancos due to attending the race. Each of the groups participated for
different reasons and their expenditures can be reflective of their involvement.

       The Mushers. Twenty mushers participated in the dog race. The following map
(Diagram 1) indicates the location of the musher’s place of residence. The specific locations can
be found in Appendix B. The mushers came from two different countries: the United States and
Canada. Those mushers from the United States came from eight different states.

                                 Diagram 1 Origin of Mushers
Some Mushers traveled far distances and stayed in Mancos for the duration of the Mush. This is
reflective of the amount they spent in the various categories shown in Diagram 2.

                                                 Diagram 2

                                 Musher's Expenditures

  Accomodations                                                       $1,856

  Transportation                                                                $2,093

      Souvenirs        $339

          Meals                                              $1,459

        Snacks                     $1,028

               $-        $500           $1,000             $1,500      $2,000            $2,500
Of the participants in the dog race, 85 percent were not local. Of the 85 percent, 90 percent
stayed in a motel in Mancos for the first portion of the race.

        The Audience. Those who attended the mush in order to watch the race came mostly
from the four corners area, while one person interviewed resides in California (data shown in
Diagram 3). Most attendees had been to or traveled through Mancos before attending the mush.
Eight percent of those interviewed have never been to Mancos. However, the dog mush did
entice people to actually stop and visit Mancos for the first time. Due to their location, many
chose to make the mush a day-trip and returned home after attending the race, while six percent
spent the night in a motel in Mancos (the expenditures can be seen in Diagram 4).

                                  Diagram 3 Origin of Audience

The amount spent in Mancos by the audience was directly caused by the dog race. The largest
portion was spent on meals and transportation.

                                               Diagram 4

                                          Audience Expenditures

                             Other      $154

                            Snacks             $116

                             Meals                                               $654

                     Transportation                             $316

                     Accomodations             $140

                         Souvenirs        $73

                                  $-    $100      $200   $300      $400   $500   $600   $700
The dog race attracted members of all age groups. Though not represented in this graph, children
also attended.

                                                       Diagram 5

                                                Age of Audience

                                                +61            18-24
                                                10%             6%
                              56-60                                               15%

                             50-55                                                        14%

                                        45-49                          40-44
                                         11%                            19%

There were different methods used to attract spectators to attend the dog race. Diagram 6 shows
the most effective method of advertising was the insert in the four corners newspapers.
                                               Diagram 6




                               Word of Mouth
        The Organizers. The organizers of the mush also spent dollars in Mancos while putting
on the event. Diagram 7 shows how this money was spent. As shown, most was spent on fuel.
There were no employment expenditures since all hours worked were on a volunteer basis.

                                                     Diagram 7

                                  Organizer's Expenditures

            Misc              $346

           Food                    $600

         Lodging                              $900

            Fuel                                                               $2,100

               $-          $500           $1,000             $1,500   $2,000            $2,500

                   The Economic Impact of the Mancos Dog Sled Race
Direct, Indirect and Induced Effects

Direct economic effects occurred when the Mancos Mush bought goods and services from
vendors. These activities increased the income of the vendors. From this direct business
activity, there is a “ripple” effect throughout the local economy. These effects are known as
indirect and induced impacts that generate income in a local economy. Indirect effects include
the increase in income that is created when the vendors whose incomes increased due to doing
business with the Mancos Mush in turn purchase from others in the local economy. Induced
effects are created when the mush audience spend their personal income within the local
economy on goods, services, property, taxes, etc.

                                               Vendor       Impacts
          The Mancos                         incomes 
             Mush                                                       Create more
                            Direct                                         wealth
            Creates        Impacts
           Additional                                                  through trade;   ETC.
                                             The mush                      trading
            Wealth                        audience spends                  partner
                                                                         incomes 

Economists typically estimate indirect and induced impacts by using a “multiplier.” Multipliers
are used to represent the “ripple effects” of money in the economy as it is traded and traded
again, generating wealth and income. For example, a multiplier of 1.5 would mean that for every
dollar of payroll that an industry pays to its own employees, an estimated $0.50 in additional
economic value or income is generated in other industries. When determining the multiplier for
an area it is imperative to account for the variety of purchases made by organization (Mancos
Mush) with in the local region. Due to the rural nature of Mancos, the producers may often
purchase materials and equipment from outside the region. The multiplier used in this study was
obtained from the Bureau of Economic Analysis (BEA) and were calculated for the Southwest
Colorado region.1

The Output Multiplier: 1.6454

This means that for every dollar that the Mancos Mush and its audience spends, an estimated
$0.64 in additional economic income is produced in other industries. The BEA, by using a
Regional Input-Output Modeling system (RIMS), has determined industry multipliers for
specific regions of the country. The BEA has found that in “smaller communities” dollars will
hold for shorter periods as residents look outside the region for many of their purchases.

The Economic Impact
Table 1 displays the economic impact of the annual Mancos Mush Dog Sled Race that took place
in February 2006. Economic impacts of the mush occurring outside of Mancos are not
represented in the table.

Table 1 Results of Economic Impact Study, Mancos Mush Dog Sled
Mush organizers budgetary expenditures                                           $4,184.00

Musher’s Expenditures in Mancos, CO
Audience Expenditures
Direct and Induced Economic Impact                                              $12,410.60
Multiplier                                                                          1.6454
Total Estimated Economic Impact                                                 $20,420.40

The numbers in Table 1 show that the direct and induced economic impacts were
$12,410.60- the sum of the mushers, the organizers (including volunteer expenditures) and
the audience expenditures. Note that 55 percent of the direct and induced economic impacts
of the dog race were the result of the musher’s expenditures. The mush organizer’s
budgetary expenditures were 33 percent of the direct and induced economic impacts, and
audience expenditures were 12 percent.

Including the multiplier effect, the mush’s total estimated economic impact was $20,420.40.
Some perspective may be gained by recognizing that this event generated about .13 percent of
the annual personal income (based on data in Appendix C).

The purpose of an economic impact study is to “. . . help target specific markets to increase
economic activity within a region, determine the financial feasibility of offering different
facilities or programs, and project future profits derived from recreational/ tourism development
projects” (Graefe). This data has been provided through demographic and spending information
of the audience, participants and organizers of the Mush. More insight can be obtained through
the comments provided by these individuals [Appendix D]. Overall there was a positive
economic impact, and people were satisfied with the Mancos Mush as well as the community of
                                       APPENDIX A


  1. What is your zip code?
  2. Transportation
          100% drove own vehicle
  3. Will you be staying overnight in Mancos?
              Yes 85%; No 15%
     If yes where?
      A home with family 15%
      Hotel/motel 85%
      Inn/B&B
      Campground
      Condo/Timeshare
      Other
  4. How many people are in your party?
      Adults
      Children
         Total number of people with the 13 interviewed: 27 adults and 4 children.
  5. Amount you and your party have spent of plan to spend in Mancos specifically as a result
     of your attendance at this event. Remember to include money spent before, during and
     after this event.
      Admission (n/a)
      Refreshments and/or snacks
      Food, drink and meals purchased
      Souvenirs purchased in Mancos
      Transportation
      Overnight Accommodations
      Other
  6. Have you been to Mancos?
         47% Yes; 53% No
  7. Have you attended this dogsled previously?
         Yes 38%; No 62%
  8. Would you attend again?
         100% Yes

  1. Zip code
  1. How did you find out about the race?
      Newspaper           47%
      Radio                3%
      Word-of-mouth 34%
      Other              16%
2.    What was your mode of transportation to the race?
      100% own vehicle
3.   Will you be staying overnight in Mancos?
         Yes 9%
     If yes where?
      A home with family 3%
      Hotel/motel           6%
      Inn/B&B
      Campground
      Condo/Timeshare
      Other
4.   How many people are in your party?
5.   Adults (on average 1.469)
6.   Children (on average .59)

7. Amount you and your party have spent of plan to spend in Mancos specifically as a result
    of your attendance at this event. Remember to include money spent before, during and
    after this event.
     Admission (n/a)
     Refreshments and/or snacks
     Food, drink and meals purchased
     Souvenirs purchased in Mancos
     Transportation
     Overnight Accommodations
     Other
8. Have you ever been to Mancos before?
    92% Yes; 8% No
9. Have you attended the Sled Dog Race before?
    23% Yes; 76% No
10. What is your gender?
    40% Male; 60% Female
12. Which range includes your age?
     18-24
     25-34
     35-39
     40-44
     45-49
     50-55
     56-60
     61+
Employee expenses (n/a)
Overhead and operating expenses:
                   A. Total overhead expenses                $ 11,325
                   B. Total expenses in Mancos                  3,946
                   C. Total expenses in Durango                  3,399
                   D. Total expenses in Silverton                  712
                   E. Total expenses in Cortez                  1,500
Facility expenses:
                   A. Total facility expenses                    $ 238
                   B. Total expenses spent in Mancos               238
                   C. Total expenses in Durango
                   D. Total expenses in Silverton
                   E. Total expenses in Cortez
In-Kind Contributions:
                   F. From local businesses                      $ 600
                   G. From non-local businesses                   1,400
                   H. From local (city or county) government        200
                   I. From non-local (city or county) government       0
                   J. From local individuals                          50
                   K. From non-local individuals                     100
                   L. Other
                   M. Total in-kind contributions                 2,350
Volunteer Hours Dedicated to Your Organization                    1,200
                          APPENDIX B



Canada:                          Oregon:
British Colombia                 Grants Pass
Inuvik, NWT                      Sandy
Yellowknife, NWT
                                 South Dakota:
California:                      Sturgis
Colorado:                        Millville
Glenwood Springs                 Virginia:
Hesperus                         Blacksburg
Pine                             Wyoming:
Placerville                      Gillette
Montana:                         Pinedale
Seeley Lake


Colorado:          New Mexico:
Cortez             Farmington
Dove Creek         California:
Durango            Goleta
Mesa Verde
Pleasant View
                                       APPENDIX C


      Thirteen mushers were surveyed. A total of twenty mushers attended the race. We
       calculated an average expenditure from the surveys taken and multiplied the average by
       the total mushers who participated in the race.
      Thirty two members of the audience were surveyed. We estimate a total of 47 attended
       the race. We calculated an average expenditure from the surveys taken and multiplied
       the average by the total members of the audience who attended the race.
      We assume that the admission paid by the mushers was spent by the organizers –
       therefore, that dollar amount was not included in the musher’s expenditures to avoid
       double counting.
      The totals depicted in the graphs are based on the information obtained by those
       interviewed (not extrapolated data).

Date Used in Calculations:

      Mancos, CO 2000 Census Information:
             The per capita income for Mancos $13,946
             Personal per capita income $15,480,060
             Population Mancos 1,110
                                             APPENDIX D
Musher’s Comments
        “Very nice race, Well organized.”
        “Great trail.”
        “I will be back, and I will bring more teams too. Great people, Beautiful trail.”
        “I am grateful, I love it. I will be back as long as they have it.”
        “Great atmosphere.”
        “I would consider moving here.”
        The towns absolutely pulled out all the stops to accommodate us and it is a super-
         friendly part of the state.”

Audience Comments
        “Keep it up forever.”
        “Keep advertising, I think a lot more people would attend.
        “Great Job! I’ll be back next year.”
        “Better Directions.”
        “If there was something to buy, I’d buy it!”
        “Hope it continues. It helps bring business”

Graefe, A. (2001, March). Economic Impact Analysis: A Look at Useful Methods. Parks &
Recreation. Retrieved from April 20, 2006 from

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