Sunday, May 5, 1996

FISCAL FITNESS: Economics of snowboarding

SKIING IS ONE OF THE MOST ENJOYABLE ACTIVITIES I've ever tried, but by choice, I may never ski again. Why not? Because I've been bitten by the snow boarding bug. This recent affliction, along with the not-so-recent affliction of being an economist, got me thinking about the larger context of the snow boarding phenomenon.

A few years ago when snow boarding became popular, skiers resented the invasion of what they considered wild, rowdy, impolite, hormone-charged adolescent snow boarders on their slopes. Most of that resentment has now passed, and boarders and skiers coexist peacefully.

Skiers may not realize it, but the snow boarding phenomenon is to their advantage. Because of snow boarding, skiers have more options. How so?

Most of the costs of running a ski resort are "fixed" as opposed to "variable." The ski lifts, for example, cost about the same regardless of how many people use them. Therefore, the more people who use the lifts, the less the cost per user.

Resort owners receive more revenue, resorts become more profitable, and profits encourage additional resorts. Surprisingly, many ski lifts now even operate in the summer, transporting people and their mountain bikes to the tops of the mountains for the exciting ride down the slopes.

Snow boarding is only one of countless new recreational activities that have been created over the past several years. To me, one of the most fascinating aspects of the rapid evolution of the industry is how existing equipment and activities have been hybridized into new ones.

Snow boarding, for example, takes something from surfing, skateboarding and skiing. Wind surfing takes something from sailing and surf boarding. Roller blading is a combination of ice skating and roller skating. Skateboards could not have been developed without advances made in plastics.

These innovations are a marriage of Yankee ingenuity and space-age materials and technology. Each new development opens possibilities for others and for other syntheses.

Spending on recreational activities has been growing about twice as fast as the overall economy. Economists classify recreational spending as a luxury good. A luxury good is any expenditure that increases faster than a person's total income. An example of a non-luxury good is food. As your income increases, the percentage of your income spent for food tends to decrease.

The recreation industry has also become a major presence in Humboldt County's economy. Moonstone Mountaineering makes a variety of products related to mountain climbing, kayaking and camping. Kokatat makes apparel for water sports. Yakima makes auto roof racks used to transport bicycles, skis, camping gear and kayaks. Wings makes inflatable rafts.

The invention of each new activity provides us with more ways to have fun. Having a greater array of options benefits us in a variety of ways. Although snow boarding is still dominated by males aged 15 to 25, that is bound to be less so in the future.

It takes less skill than skiing, is less physically demanding and is less risky to knees and ankles. In comparison to jogging, roller blading is gentler to ankles, knees and hips.

My primary recreational activity is running. In the 27 years I've been running, the improvements in running shoes have been amazing, and I'm sure have helped to minimize injuries and prolong my running career.

Recreation is not the only industry that offers consumers an increasing selection of products. Practically everywhere you look in the economy, consumers have more to choose from. Automobiles now come in a wide variety of body types. Cable TV offers 40 or more channels, and satellite TV more than 150. The ever-increasing array of speciality catalogs provide people with access to virtually any product category imaginable.

There are dozens of kinds of beer to choose from. In Humboldt County alone there are four micro breweries!

It's been observed that one effect of this increasing variety is that it allows each of us to raise our standards. As we have move away from a "one-size-fits-all" outlook, we can come much closer to satisfying our individual tastes and preferences. Producers are forced to try harder in satisfying consumers and in competing for their dollars.

If it's true that variety is the spice of life, America today is a red hot chili pepper. My only complaint is that I can't snow board again until next winter.


FISCAL FITNESS: Economics of snowboarding

Ron Ross Ph.D. is a former economics professor and author of The Unbeatable Market. Ron resides in Arcata, California and is a founder of Premier Financial Group, a wealth management firm located in Eureka, California. He is a native of Tulsa, Oklahoma and can be reached at

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