Broadband and Vacation Properties
Wisconsin
An Economic Impact Study
June,2014
University of Wisconsin Whitewater
Russ Kas...
About Us
• The Fiscal and Economics Research Center (FERC) at
the UW - Whitewater along with UW- Extension
analyzed the ec...
Areas of Focus
• Economic Benefits: Increase broadband availability and
its effective use to spur the state’s economic
dev...
Economic Impact
• The FERC at the UW-Whitewater analyzed the
economic impact of broadband internet
connectivity in vacatio...
The Value of Vacation Homes
• The FERC has done research on Tainter Lake,
Delavan Lake and Dover Lake in order to
determin...
The Survey
• Surveys were conducted by the FERC to determine
the daily expenses of local part-time residents
living in the...
Results: Part Time Residents on
Tainter Lake
Category Daily Expenses
Construction 34.15
Fishing/Boating Exp. 1.55
Launch F...
Results: All Residents (Full and Part-
time) on Delavan Lake
Category Daily Expenses
Construction $41.25
Bait/Tackle $0.24...
Results: Part Time Residents on
Eagle Lake
Category Daily Expenses
Construction 135.19
Bait/Tackle 0.61
Launch Fees 0.21
D...
Results: Part-time residents – New
North-Eastern Broadband Survey
Category Daily Expenses
Construction 12.48
Fishing/Boati...
Research Question
• The FERC was tasked with determining how many
more days part-time residents would stay at their
vacati...
Results: “Northwoods Wisconsin”
Survey
How much longer would you stay in the Northwoods
of Wisconsin each year if you had ...
Calculation Results
• Using a weighted average calculation from the previous table the
“Northwoods Wisconsin Survey” concl...
Conservative Estimates
• Once again, in order to obtain a conservative
estimate, the expenditure data was based on the
fou...
Relevant Numbers
• Part-time residents would stay 37 days more per
year if they had broadband Internet connectivity
• Cons...
Economic Impact
• Multiplying $67.26 (average daily expenditure)
times 37 (average number of extra days
residents would sp...
“Northwoods” Counties
• The FERC determined that in Forest, Langlade,
Lincoln, Oneida, and Vilas Counties there are
curren...
Direct Economic Impact
• As a result, using our numbers from the previous slides, we
conclude that in Forest, Langlade, Li...
Types of Effects
Direct effect refers to production change associated with a change in demand for
the good itself. It is t...
IMPLAN Results
(These numbers need to be updated)
Impact Type Employment Labor Income Output
Direct Effect 1,454 $23,528,9...
Conclusions
• Broadband internet connectivity in vacationing
homes would generate additional spending in the
local economy...
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Economic Impact of Broadband & Second Homes, UWEX High Speed Bits

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University Wisconsin-Extension Broadband & E-Commerce Education Center High Speed Bits 6.26.14 program: Economic Impact of Broadband & Second Homes.

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Economic Impact of Broadband & Second Homes, UWEX High Speed Bits

  1. 1. Broadband and Vacation Properties Wisconsin An Economic Impact Study June,2014 University of Wisconsin Whitewater Russ Kashian, PhD Professor Department of Economics Northwoods Broadband and Economic Development Coalition
  2. 2. About Us • The Fiscal and Economics Research Center (FERC) at the UW - Whitewater along with UW- Extension analyzed the economic impact of broadband connectivity at vacationing homes • The Center for Community Technology Solutions is working to help Wisconsin communities develop the internet capacity they need Northwoods Broadband and Economic Development Coalition
  3. 3. Areas of Focus • Economic Benefits: Increase broadband availability and its effective use to spur the state’s economic development • Community Piloting: Increase broadband connectivity in rural communities • General Outreach and Engagement: Increase and foster broadband adoption • Tech/Broadband Training and Coaching: Expand the capacity of staff and faculty to assist communities’ broadband connectivity Northwoods Broadband and Economic Development Coalition
  4. 4. Economic Impact • The FERC at the UW-Whitewater analyzed the economic impact of broadband internet connectivity in vacationing homes -Local residents with broadband connectivity will spend more time in their vacationing homes; consequently, they inject extra money into the local economy -An increase in spending generates extra revenue for business and supports job creation Northwoods Broadband and Economic Development Coalition
  5. 5. The Value of Vacation Homes • The FERC has done research on Tainter Lake, Delavan Lake and Dover Lake in order to determine the economic impact and additional spending generated in the economy by vacationing home residents Northwoods Broadband and Economic Development Coalition
  6. 6. The Survey • Surveys were conducted by the FERC to determine the daily expenses of local part-time residents living in their vacationing homes. – Construction/ Home improvements – Bait and tackle/ Launch fees – Dining out/ Groceries – Entertainment – Shopping – Gas for vehicles or boats/ Rental of watercraft/ Licenses – Medical Care Northwoods Broadband and Economic Development Coalition
  7. 7. Results: Part Time Residents on Tainter Lake Category Daily Expenses Construction 34.15 Fishing/Boating Exp. 1.55 Launch Fees 0.04 Dining Out 6.69 Entertainment 1.68 Groceries/Liquor 18.16 Gas 10.53 Shopping (Personal) 5.84 Shopping (All other) 3.14 Licenses 1.10 Medical Care 2.52 Total 85.40 Northwoods Broadband and Economic Development Coalition
  8. 8. Results: All Residents (Full and Part- time) on Delavan Lake Category Daily Expenses Construction $41.25 Bait/Tackle $0.24 Launch Fees $0.19 Dining Out $4.23 Entertainment $1.68 Groceries/Liquor $6.78 Gas $2.76 Shopping (Personal) $3.72 Shopping (All other) $1.07 Licenses $0.44 Other $2.70 Total $65.06 Northwoods Broadband and Economic Development Coalition
  9. 9. Results: Part Time Residents on Eagle Lake Category Daily Expenses Construction 135.19 Bait/Tackle 0.61 Launch Fees 0.21 Dining Out 12.31 Entertainment 5.73 Groceries/Liquor 24.02 Gas 13.13 Shopping (Personal) 11.28 Shopping (All other) 2.85 Licenses 1.53 Medical Care 2.82 Other 3.88 Total 213.56 Northwoods Broadband and Economic Development Coalition
  10. 10. Results: Part-time residents – New North-Eastern Broadband Survey Category Daily Expenses Construction 12.48 Fishing/Boating Exp. 4.56 Launch Fees 0.01 Dining Out 8.33 Entertainment 2.89 Groceries/Liquor 13.25 Gas 6.15 Shopping (Personal) 3.89 Shopping (All other) 1.31 Licenses 1.02 Medical Care 4.24 Other (cleaning, communication, maintenance cost) 16.06 Total 74.18 Northwoods Broadband and Economic Development Coalition
  11. 11. Research Question • The FERC was tasked with determining how many more days part-time residents would stay at their vacationing homes if they had broadband internet connectivity • Goal: To determine the extra amount of money spent in the local economy as a consequence of second-home owners spending extra time in their residence if they had broadband internet Northwoods Broadband and Economic Development Coalition
  12. 12. Results: “Northwoods Wisconsin” Survey How much longer would you stay in the Northwoods of Wisconsin each year if you had access to broadband internet? Answer Options Response Percent Response Count I would not stay any longer than I currently do 47.1% 112 Up to 2 weeks 8.4% 20 2-4 weeks 13.4% 32 1-2 months 16.8% 40 3-4 months 5.9% 14 5-6 months 2.9% 7 6-12 months 5.5% 13 Answered Question 238 Northwoods Broadband and Economic Development Coalition
  13. 13. Calculation Results • Using a weighted average calculation from the previous table the “Northwoods Wisconsin Survey” concluded that on average, part-time residents would stay in their vacationing homes 37 more days if they had broadband internet connectivity • Note that the recent FERC North-Eastern Wisconsin Survey found that part-time residents would stay in their vacationing homes 50 more days if they had better internet/broadband connectivity • In order to obtain a conservative estimate of economic impact, we decided to use the results of the earlier survey (37 days). • 52.9 % of respondents in the “Northwoods Wisconsin Survey” indicated that Internet access issues/staying connected is a barrier that prevents them from staying longer in their second-home Northwoods Broadband and Economic Development Coalition
  14. 14. Conservative Estimates • Once again, in order to obtain a conservative estimate, the expenditure data was based on the four expenditure surveys conducted by the FERC (Tainter Lake, Eagle Lake, Lake Delavan, and the recent Broadband Survey). Expenditures were based on the average of the expenditures in the four studies. Northwoods Broadband and Economic Development Coalition
  15. 15. Relevant Numbers • Part-time residents would stay 37 days more per year if they had broadband Internet connectivity • Construction spending was omitted from the spending estimates due to its volatility • As a result, we found that part-time residents spend $67.26 dollars a day per household in their vacationing homes Northwoods Broadband and Economic Development Coalition
  16. 16. Economic Impact • Multiplying $67.26 (average daily expenditure) times 37 (average number of extra days residents would spend in their vacationing homes) gives us a total of $2,488.62 additional dollars per seasonal home spent a year in the local economy if owners had broadband internet connectivity Northwoods Broadband and Economic Development Coalition
  17. 17. “Northwoods” Counties • The FERC determined that in Forest, Langlade, Lincoln, Oneida, and Vilas Counties there are currently 31,180 seasonal houses • Of these 31,180 seasonal houses, the survey concluded that 52.9% did not have Internet Access or had issues staying connected Northwoods Broadband and Economic Development Coalition
  18. 18. Direct Economic Impact • As a result, using our numbers from the previous slides, we conclude that in Forest, Langlade, Lincoln, Oneida, and Vilas part-time residents would directly contribute with $41,047,845.77 (31,180 x 52.9 % x $2,488.62 ) dollars in the local economy if they had better access to internet • 31,180 (seasonal houses) • 52.9% (percentage of households with internet access issues) • $2,488.62 (additional spending a year per seasonal home) Northwoods Broadband and Economic Development Coalition
  19. 19. Types of Effects Direct effect refers to production change associated with a change in demand for the good itself. It is the initial impact to the economy, which is exogenous to the model. Direct effects include respective portions of the amount initially injected into the regional economy (non-local spending in the region) Indirect effect refers to the secondary impact caused by changing input needs of directly affected industries (e.g., additional input purchases to produce additional output). It concerns inter-industry transactions: The Grocery Stores has a demand for locally produced materials needed to produce their product (often foodstuff) Induced effect is caused by changes in household spending due to the additional employment generated by direct and indirect effects. The Induced Effect measure the effects of the changes in household income and the spending of this increased household income on consumption items Northwoods Broadband and Economic Development Coalition
  20. 20. IMPLAN Results (These numbers need to be updated) Impact Type Employment Labor Income Output Direct Effect 1,454 $23,528,923 $55,778,505 Indirect Effect 109 $4,294,936 $12,867,676 Induced Effect 188 $7,281,161 $22,466,186 Total Effect 1,751 $35,105,021 $91,112,368 Northwoods Broadband and Economic Development Coalition
  21. 21. Conclusions • Broadband internet connectivity in vacationing homes would generate additional spending in the local economy, causing economic prosperity to the region • The yearly impact in Forest, Langlade, Lincoln, Oneida, and Vilas Counties in Wisconsin would be between $41,047,845.77 and $55,778,505 • Benefits: job creation, higher tax revenues, and better infrastructure in the county Northwoods Broadband and Economic Development Coalition

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