Abstracts Economics

Ski Town USA: The Local Multiplier of the Ski Industry

by Tyler Joseph Farrell

I analyzed the economic significance and impact of ski facilities in the United States by estimating the multiplier of the ski industry on ski counties' economies. The paper uses the differential impacts of winter weather on employment outcomes between counties with ski facilities and ones without ski facilities as an instrumental variable to predict the multiplier using a two-stage least squares regression. The differential impacts are attributed to the demand-driven relationship between snowfall and skier visitations which leads to variation in the demand for services and labor. The ski industry's payroll multiplier is predicted to be 209 and the employment multiplier is predicted to be 121 with 15% of the spillover effect being attributed to indirect impacts on other tourism-related industries such as Hotels and Restaurants. Broadening the ski industry classification to include these industries finds the multiplier to be closer to 5 with the spillover effect mainly concerning induced spending and second-order indirect spending. Overall, the paper finds ski facilities to be highly interrelated to industries within ski counties and highly impactful to these communities.