Danielle Van Dusen
Mrs. Straub
AP Economics
March 8 2016
Spring Break Fever
The temperature is rising and spring break is near! I cannot wait till I am on a beach and soaking in sun rays. Spring break is a highlight of the year for a lot of people. People travel all over the world to get a relaxing getaway or an adventure. Vacationers have been preparing for this week for months by buying resort packages, booking flights, purchasing appropriate apparel for the trip. This raises the national income in America.
When people buy products in America it contributes to consumer spending. By increasing consumer spending it raises the national income or in other words GDP. The GDP equation is Y = C + I + G + (X - M). The “C” represents the consumer spending in the equation and so whenever a family purchases a hotel or flight in America that contributes to consumer spending. Unfortunately if the vacation is outside of the country it does not contribute to America’s GDP. So Cancun, Mexico is the top destination for spring break (Loretta). Because it is in another country the money paid for the resort contributes to Mexico’s GDP, not America’s. Only the clothing purchased in america for the trip counts towards consumer spending, except if the clothing was an import.
On a micro standpoint there are increases in price of the airline prices and resort. This is due to the rise in demand. When there is a rise in consumer envy for a product or service it shifts the demand curve to the right. This raises the industry price for the product or service. This will increase revenue for the business providing that good or service. In this situation there was a high demand for flights and resorts and so the price for the goods and services are increase.
Spring break is a time for making memories and enjoying life and I hope you do this year as well!
Works Cited
Loretta, James. "Hot Spot: Spring Break." Loading Site Please Wait... N.p., 7 Oct. 2015. Web. 08 Mar. 2016.
Dani, I completely agree with you, I can not wait for spring break. Planning to go to Cancun, Mexico this year, I did not even consider that it would count towards Mexico's GDP and not America's, makes sense but I wouldn've thought that if it was an American purchasing the trip, it would count towards America's GDP. Interesting! Reading this, I also learned that most businesses like airlines and summer clothing shops income boosts incredibly during this time of year.
ReplyDeleteI like how you related this post to both micro and macro concepts. Like you mentioned, vacationing to places like Mexico contribute to Mexico's GDP not the United States. Looking at the chart you provided, majority of the top spring break destinations are outside of the US so with that being said does spring break really make as much of an economic impact as we are giving it credit for? Overall great informative post and I think we are all looking forward to spring break.
ReplyDeleteSpring Break is one of the most interesting things when it comes to consumer spending. Thousands of Americans spend a significant amount of their income on spring break. These people save up by maintaining a higher propensity to save during the months prior. Once spring break comes they tend to spend a significantly more amount of their disposable income raising their marginal propensity to consume. In general this post is really interesting because spending habits really do change during this time in the year.
ReplyDeleteSpring Break is always one of the best times of the year for many people. Since it is such a popular travel time, I am not surprised that GDP increases. On the other hand, I am surprised to see how low Florida was as a travel destination because it always seems like many people go to Florida for Spring Break. Since spring break is such a popular time to travel, it is smart, on a business viewpoint, that the airlines raise their prices, because the consumers will have no choice but to buy these airline tickets. To make this post better, you could find the GDP for America and how it increases during spring break.
ReplyDeleteSpring break is a great time to travel, but also quite expensive as it is a peak time. If someone is budget minded, they can take two trips during off peak time. It is nice to see the money stay in our country though.
ReplyDeleteThe US GDP does not benefit when people travel internationally and it also allows for less people to be working during the week which also decreases the GDP. The lack of production results in a decrease in final products for consumers to purchase. Instead, everyone is spending in different countries which increases their GDP. Although some would argue that a break from work can actually increase production for the rest of the year because the employees are less stressed and able to be more productive.
ReplyDeleteThe title of your blog post intrigued me because I, too, have spring break fever! Last year I went on a vacation to Mexico, but I had no idea that vacations out of the country were not included in the overall U.S. GDP prior to this year. I agree that stores carrying beach wear usually have higher consumer spending before the week of spring break, but after I think that grocery stores have high consumer spending because everyone is coming home hungry from their vacations and needing to stock up for their next week back at school. Overall, your post was very intriguing. I was surprised to see Europe as one of the top destinations for the U.S. during this time because the flights are rather expensive, but people are more likely to spend more on something that they wouldn't have otherwise to get away for a little while.
ReplyDeleteI can see why everyone goes all out for spring break, the temperature is finally warmer and it's almost the end of the school year for students! But, I never thought about how trips outside the US wouldn't be apart of our nation's GDP. However, for people outside the country coming to visit the US and purchasing goods here will be included in our GDP we still have an advantage of raising the GDP during spring break. I know the prices for tickets and hotels go up during this time since many people will be going on vacation, but I'd assume people would buy their tickets in advance so they'd save more money not worry about finding a last minute flight. But it's good for their business since they know people will buy tickets and spend their money on other goods either way so they're still making a profit.
ReplyDeleteIt's so interesting how a plane ticket can behave as an inelastic good during the Spring Break time period in the United States, meaning people disregard the high prices because they have a need to travel.Since, as you mentioned, consumer spending is a large part of GDP I bet there are fluctuations in the popularity of consumer spending when comparing each year's spring break. In times of economic upturn, there are probably more trips taken. And on the other hand, when the economy is not doing well, there are probably less trips taken. So while spring break spending affects the GDP, the magnitude of its affect is determined by the state of the economy before spring break.
ReplyDeleteI'm hyped for spring break myself and from a high school student's point of view I do see why people are willing to spend so much on spring break. It's almost summer and we are just aching to get out of school and spring break is sort of like a taste of summer where you have no worries and you're going out partying all the time and it feels like nothing can bring you down during that time. It's not surprising at all that plane tickets are inelastic during spring break because everyone wants to spend money to go somewhere like Florida.
ReplyDeleteI totally agree, I cannot wait for spring break. I had never thought much about the economics of spring break though my thoughts are usually just focused around the excitement of the trip. I feel like it should be totally obvious that going to another country benefits that countries GDP but I had just never thought about it before. Overall though even if many people vacation outside of the United States they must buy things in preparation for this vacation so even those smaller purchases are aiding the GDP rate for the United States.
ReplyDeleteTo me a spring break is similar to a Super Bowl for wherever the tourism is hot, such as mexico. Not only do people spend money on flights and hotels but food, clothing, excursions, and souvenirs. The GDP of these places rise immensely. This period of spring break also does help the US even if people are going out of country, they need to buy swimsuits, cover ups, fancy clothes, shoes you name it and the price of these do go up. Overall the spring break fever helps the GDP of most countries with tourists.
ReplyDeleteTo me a spring break is similar to a Super Bowl for wherever the tourism is hot, such as mexico. Not only do people spend money on flights and hotels but food, clothing, excursions, and souvenirs. The GDP of these places rise immensely. This period of spring break also does help the US even if people are going out of country, they need to buy swimsuits, cover ups, fancy clothes, shoes you name it and the price of these do go up. Overall the spring break fever helps the GDP of most countries with tourists.
ReplyDeleteI agree, spring break is when many people go an vacation and so there are a lot of people buying plain and hotel tickets and that's great for them. I'm surprised that a lot of people go to Mexico for their spring break I would have thought that Florida would've been #1. But its still confusing that another place funds Mexico events b though GDP. But anyone that is going on vacation needs to have a budget where you have money left over for spending money, that is so you can get gifts and a lot food.
ReplyDeleteDuring this time of year airlines take advantage of being able to price airplane tickets without losing customers. The price of the tickets are more inelastic, meaning people travel during this time not 'caring' as much about the price since they want to travel. With the price of airliner tickets and hotels going up at this time this allows for our nations GDP to increase. With the additional consumer spending on vacations within the country it will allow our GDP to increase. Spring break vacations within the United States help our economy with the additional expenditure on hotels, plane tickets, and other miscellaneous expenses for raising our countries GDP.
ReplyDeleteI never thought of spring break in terms of who actually gets the revenue. You bring up an excellent point that lots of people who travel out of the country bring their money away from American businesses. I can see how this would nearly hurt our local economy. I don’t often travel for spring break, and I’ve never considered its negative economic impact. However, if foreign countries have similar spring break times, that could be beneficial to the U.S. if we take in a lot of tourists during that time. Perhaps that could even make up for the revenue lost due to our citizens traveling abroad. It would be interesting to see how tourism in the U.S. does during spring break. Considering there could be many foreign visitors, that could be redemption for larger cities. However, I think remote cities may be negatively impacted either way because local people leave and tourists don’t normally stop in remote places.
ReplyDelete- Martin Mueller
I completely agree with you Dani, I can't wait for spring break. The topic consumer spending is very interesting because if someone goes outside of the U.S for vacation the only thing that benefits our country is the clothes that they purchased before. Not only does the consumer spending increase but so do the prices of plane tickets, hotels, food, clothes and much more. Businesses are smart about this because they know that if you are on vacation and need something very badly, you will pay the price no matter how much it is. Also, airlines increase their prices because they know that even if the price is substantially higher, people will still resort to flying and end up paying the price. Lastly, I find the top 10 spring break destinations very interesting, because I always thought that most people stayed in the United States and went to either Alabama, Florida, or California. After looking at the chart and realizing that 3 out of the 10 places were in Mexico shows that less people come to the United States which in the end affects the GDP of the U.S. Overall great descriptive page and great vocabulary words to back up your thoughts.
ReplyDeleteAlthough it is a season for vacationing and travel, thus implying greater amounts of consumer spending, I disagree with your point that it will raise the GDP. There are fluctuations of spending within a year, especially with traveling (specifically airline travel). These fluctuations are high during vacation times and holidays and relatively normal or slow during all other times of the year. The GDP, a macro economic term, will not be affected by spring break traveling because it is relatively small increase in consumer spending when looking in the macro perspective. In terms of micro economics, it would be a correct statement. Overall, spring break is the time for spending, however, it will not affect the United State's overall GDP as vacation travels are included every year under the consumer spending element.
ReplyDeleteI agree with you. I can't wait to be on a beach somewhere laying in the sun! While reading your article I found it interesting that Mexico was the number one touring detestation. From listening to kids around school it seems like Florida would have been number one or higher up on the list. I wonder if your chart you found was based upon families or just groups of friends going together for a trip. I also never really thought about how planning for spring break increases the GDP. Families spend so much money for the week that they have on the beach somewhere. Overall I thought your article was really interesting and eye opening to see where people like to take their spring break at.
ReplyDelete-Kristie