Sample Student Project The Economic Impact on the Town of Mancos Mancos Dog Sled Race February 9-10 2006 By Evan Bottcher and Renae Durand Prepared Under the Direction of Dr. Deborah Walker Fort Lewis College School of Business Administration Introduction 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” (www.sanjaunstagestop.com). 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 Dollars 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 Dollars 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% 25-34 56-60 15% 14% 35-39 50-55 14% 11% 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 Advertising Other 16% Newspaper 47% Word of Mouth 34% Radio 3% 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 Dollars 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. Indirect Vendor Impacts The Mancos incomes Mush Create more Direct wealth Creates Impacts Additional through trade; ETC. The mush trading Wealth audience spends partner locally incomes Induced Impacts 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 Race Mush organizers budgetary expenditures $4,184.00 Musher’s Expenditures in Mancos, CO $6,773.60 Audience Expenditures $1,453.00 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). Conclusion 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 Mancos. Appendices APPENDIX A SURVEY QUESTIONS: Mushers: 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 9. Comments. Audience: 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+ Organizers: 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 ORIGIN Mushers: Canada: Oregon: British Colombia Grants Pass Inuvik, NWT Sandy Yellowknife, NWT South Dakota: California: Sturgis Pioneer Utah: Colorado: Millville Durango Glenwood Springs Virginia: Hesperus Blacksburg Morrison Pine Wyoming: Placerville Gillette Lyman Montana: Pinedale Seeley Lake Audience: Colorado: New Mexico: Cortez Farmington Dolores Dove Creek California: Durango Goleta Ignacio Mancos Mesa Verde Pleasant View Telluride APPENDIX C Assumptions: 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” Bibliography Graefe, A. (2001, March). Economic Impact Analysis: A Look at Useful Methods. Parks & Recreation. Retrieved from April 20, 2006 from www.findarticles.com.