Avery Colwell
Mr. Reuter
Economics A3
10 May 2016
Independence Day
As the temperature get warmer and the days at work get shorter, it is almost time for everyone's favorite season; Summer. People are getting ready for music festivals, camping trips, and pool days. The major holiday or celebration that everyone thinks of that happens in summer would have to be the fourth of July; especially all the fireworks that come along with it. While we celebrate Independence day, we never would stop to think about what major events like this can do to a city. Although there is an external cost of pollution and increased risk for injury during these firework shows, they actually bring in an economic benefit for many major cities across the United States.
A recent study conducted by the Fermanian Business & Economic Institute of Point Loma Nazarene University revealed just about how much of an economic benefit the Fourth of July firework shows bring in. It states that “The study determined that the annual July 4th fireworks show on San Diego Bay called the ‘Big Bay Boom’ creates $10.6 million of total economic benefit for the local economy”(Major). Events like this can also lead to increased profit and revenue for restaurants and hotels, as well as shops and tourist rentals. Americans spend more than 6 billion dollars on food alone for The Fourth of July each year, stocking up on chicken, hotdogs, and hamburgers.
Putting food and extra spending aside, the money that Americans spend on fireworks is supposed to continue to increase as the years go on. According to gobankingrates.com, “In addition to T-shirts and flags, the American Pyrotechnic Association said that consumers spent $662 million on fireworks in 2013, up from $645 million in 2012...The economic impact on over 14,000 Independence Day fireworks displays in communities across the nation can be substantial”(Fourth). The Fourth of July will only continue in popularity as the years go on, adding many benefits to the United States economy.
A lot of other economic factors go into the Fourth of July. One doesn’t stop to think about where we get these fireworks or where the are produced. In fact, we don’t produce the majority of the fireworks going off during the fourth of July. A lot of these are purchased by companies in China. According to gobankingrates.com, “The U.S. realized that manufacturing the massive amount of fireworks needed to supply the country could no longer be effectively managed within American borders. When China opened itself up to free trade, it was clear that allowing companies in the country to manage production was best since inexpensive labor and readily-available raw materials made it easier to meet demand.” But up until recently, China hasn’t been as mass producing them due to problems like lack of inexpensive labor and costlier raw materials. This is effecting the United States economy, because there was a sudden increase in demand for fireworks for the Fourth of July back in 2010 and 2011.
Although going to the 4th of July firework show down in Chicago involves a tradeoff of limited money and time, it is well worth it. When you attend big firework shows in major cities not only does it give you time with friends and family, but it also gives that city an amazing economic benefit.
Works Cited
"How Independence Day Boosts the Economy | GOBankingRates." GOBankingRates. N.p., 2014. Web. 10 May 2016.
"Major Economic Benefits from Fireworks Show." San Diego July 4th Fireworks on San Diego Bay Big Bay Boom. N.p., n.d. Web. 10 May 2016.
It's mind-blowing to see the massive impact that American holidays have on the economy, both in regard to the increased consumerism and international trade, and opportunity cost of increased pollution. It would be interesting to know the percentage of imported fireworks in relation to total fireworks exploded during the Fourth to have a better statistic of the impact of international trade. The GDP demographics switch from season to season, from the 4th of July to Christmas and so on, so I'd argue that the economy doesn't really change all that much monetarily, but demographically it definitely does, as you pointed out.
ReplyDeleteI was not surprised by the amount of revenue fireworks create. I would have thought that they would have created even more. Being America's third biggest holiday, I would have expected a greater impact and more spending from people throughout the nation. I do realize that it is only one time a yera and fireworks are a seasonal thing.
ReplyDeleteThat’s incredible how much money is made from the Fourth of July. I have never thought about how that could impact the economy and I’m sure not many others have, either, so the topic was a good choice. All the data mentioned in the blog post is about how big cities are affected, but it would be interesting to also see how it affects smaller Fourth of July celebrations. For example, how does Brookfield benefit from their fireworks at Mitchell Park and parade on North Avenue?
ReplyDeleteThe firework shops sell a buy on get one free deal so they will be inclined to buy more fireworks as they get more free.Considering the amount of fireworks sold and the remarkable ablity to do dumb things with fireworks in a crowd of family and friends both hospitals and places like CVS will see an uptick in sales of bandages, burn creams, or pain killers. Furthermore food stores sell more as people will typically have the family around to eat more food with. This is good for the local businesses as with any holiday people will spend money to get things that they need to properly celebrate our independence.
ReplyDeleteThe fourth of July is the Superbowl of holidays similar to Christmas and new years. The hard part about the increase in demand leading to a production overseas is the purchase of these products now doesn't help us improve our GDP however the fireworks brings in other revenues that do improve our GDP so that's good.
ReplyDeleteThe fourth of July is the Superbowl of holidays similar to Christmas and new years. The hard part about the increase in demand leading to a production overseas is the purchase of these products now doesn't help us improve our GDP however the fireworks brings in other revenues that do improve our GDP so that's good.
ReplyDeleteIt's shocking that so much money is spent on something like fireworks. A firework is a one use pyrotechnic that can cause harm to people and the environment and we spent $662 million in 2013. I love fire and and fireworks but the fact that we spend so much on something that can never be used again is baffling. The one time we use it may be a blast, but it's only one time. That's a very big tradeoff.
ReplyDeleteIt's amazing to see how much revenue 4th of July bring to America and how much it is increasing each year. I also think that the fireworks will still be high in demand in the future because people love setting them and watching them each year. But, one concern maybe is that if China stops supplying fireworks to the US, since they are the only reason why we have them. If they stop supplying, then we won't be able to enjoy 4th of July as much and have to find other alternatives.
ReplyDelete