New City, New Team, New Economy

New City, New Team, New Economy

By: Tyler Kiser

Two months past the Super Bowl, and a month to the NFL draft, NFL teams are in crunch time for making decisions for future seasons. Many football enthusiasts are ecstatic during this time period, hoping their favorite teams make the “right” decisions in the offseason. One extreme change that has occurred this offseason is the Raiders moving from Oakland to Las Vegas. Some people completely disagree with this move as they believe the Raiders should stay in their hometown, but truly this is the right decision for a dying team. Building a new NFL Stadium in an already popular city will not only revive the team, but it will greatly benefit the surrounding businesses and the community as a whole.

Currently Las Vegas has a solid economic base. Yearly the city brings in roughly 42 million tourists, generating an average yearly revenue of roughly $450 million. The gross profit just from tourists alone keeps the economy of Las Vegas growing, but eventually something new will be needed to spice up the town. With no recent upgrades to the city, less and less people will feel the need to visit, as currently 2% less visitors toured the area in 2017 as they had in 2016 at this time. This data proves there is a decreasing demand of tourism for Las Vegas. However, the new Raider’s Stadium is the solution to this problem. Once the stadium is completed, a projection of completion in 2022, it will grant a large spark to the Las Vegas economy. The football fans of the Raiders will feel the dire urge to see the new innovative stadium no matter the distance they life from it. The thousands of fans traveling to the games and various events in the stadium cause the projection it will generate $33 million yearly in net profit from strictly ticket sales, from only 26 events a year. Along with ticket sales, the stadium is predicted to produce a total economic output of $785.6 million yearly. Gross domestic product of the United States as a whole will feel the effects of this professional team’s move with more demand for local goods from the thousands of extra visitors. The reason behind this is when people come for the games and events in the stadium they aren’t only going to spend money for tickets and strictly nothing else; they will explore the beautiful city and visit the eye-catching attractions of Las Vegas, spilling more money into the neighboring businesses, increasing the total revenue and gross domestic product of the city in its entirety.

Aside from the substantial increase to the outputs and the revenue of the city, there will be many more positive externalities of the stadium. One main externality is the numerous jobs the stadium will create. The stadium won’t be able to run itself and in order for it to be successful, hundreds of employees will be needed to work various jobs in and around the stadium. From the restaurants to the pro-shops many people will be employed to ensure the entire stadium and businesses within run smoothly. This high demand for workers from the labor force will also decrease unemployment in the city and maybe even pull people from around the state to work the brand new stadium.

No matter the view of the disappointed fans that their team is leaving Oakland, this move is necessary to jumpstart the failing Raiders as well as boost the economy of Las Vegas. From the regular season games to the various concerts, fundraisers and other events held in the brand-new stadium, it will greatly boost the total revenue of the city, it will sharply increase the gross domestic product of the city, and it will release many positive externalities to the surrounding community, making for a booming economy in the years to come.

Works Cited

Messerly, Megan. “Digging into Economic Projections Tied to a Raiders Move to Las Vegas.” Las Vegas Sun, Las Vegas Sun, 5 Oct. 2016, lasvegassun.com/news/2016/oct/05/economic-impact-projections-nfl-stadium-las-vegas/. Accessed 22 Mar. 2017.

Millward , Wade. “Economists Weigh Economic Impact of Stadium for Raiders in Las Vegas.” Las Vegas Review-Journal, Las Vegas Review-Journal, 21 Mar. 2017, www.reviewjournal.com/sports/raidersnfl/economists-weigh-economic-impact-stadium-raiders-las-vegas. Accessed 22 Mar. 2017.

“2016 Las Vegas YTD Executive Summary.” Las Vegas Convention and Visitors Authority, Las Vegas Convention and Visitors Authority, 2016, www.lvcva.com/stats-and-facts/visitor-statistics/. Accessed 22 Mar. 2017.

THE ECONOMICS OF SPRING BASEBALL

Written by: Redmon Wallace

THE ECONOMICS OF SPRING BASEBALL

Living in Wisconsin, many of us do not realize the presences of Spring Training Baseball every year. Most of us, if we know of it at all, just know it is something that Major League Baseball players do to get ready for the long season ahead of them. We also know that most of this happens where there is warm weather. That is about the extent of our knowledge on what many consider the preseason of the MLB. But in the states that Spring Training takes place, like Florida and Arizona, these MLB teams playing games in their states during the months of February and March are a huge part of the economy each year.

Spring Training really rakes in the cash when it comes to the Cactus League in Arizona. A recent study in Arizona showed that in the months of February and March, Spring Training brings in a total of $809 million in economic impact in the state. Included in this $809 million impact, $544 million of it is created from out of state fans. Over 60% of the money made is generated by fans from out of state, some as far as Wisconsin or even Massachusetts. This obviously drives up the prices of plane tickets, hotel rooms, even food in the state of Arizona during these times simply due to the Law of Demand. And as we know from the Supply and Demand graph, when the Demand increases, it leads to an increase in the Price Level. A survey was done in 2014 that asked all of the out-of-state visitors in Arizona attending the Spring Training games if they were there solely for the Cactus League. Over 66% of the respondents said that their sole reason for visiting the state of Arizona was to witness their favorite baseball teams play in the Cactus League. In the previous year, over 1.9 million fans attended the Cactus League games, the most since the league was established in 1947.

This same idea that the economy of Arizona revolves around Spring Training during the early months in the year is the same in the state of Florida as well. The MLB splits the league up into two leagues, 15 teams in each state. Florida receives half of the league along with Arizona, and likewise, their economy booms during the months of the Grapefruit League. A study done in 2014 shows that Spring Training brought an Economic Impact of $752 million to the state, or approximately $47 million per team. Another observation shows very key facts of the Grapefruit League that are often overlooked. An owner of a Resort and Spa in Orlando discusses that the people visiting Florida for the Grapefruit League don’t just go to one game and leave. They go to a couple games, stay a few nights in a hotel, go out to eat, golf a couple rounds, driving up the prices of every commodity. Often times too, because of the rapid increase in business that restaurants and hotels have during February and March, they have to hire more employees. This dramatically improves the unemployment rate in the state of Florida. Every business in the area of the Spring Training teams benefits from the extra “tourists” in the area each year.

I believe that because of the economic impact, the direct money brought in from Spring Training, the Cactus League and the Grapefruit League must continue to be played in Arizona and Florida each year. These leagues are now an intricate part of the state’s economy, and take that away from these states will put them in a precarious situation that they haven’t had to deal with since 1947. Taking these games away from the state, or even stopping the league as a whole, will leave a bunch of empty Spring Training stadiums and leave a huge hole in the state’s economy as we see it today. In order to ensure the economic stability of these two states, the art of preseason baseball must stay in the Sunshine State and the Grand Canyon State.

Works Cited

"Guide to the Grapefruit League: I-95 Corridor." Hagerstown Suns Fan Club. N.p., n.d. Web. 30 Mar. 2017.

Sports, Connect. "Spring Training Is Big Business for Florida." Connect Sports. N.p., 09 Feb. 2015. Web. 30 Mar. 2017.

"Spring Training - Cactus League." Major League Baseball. N.p., n.d. Web. 30 Mar. 2017.

Paper Book vs Digital Book Sales

Paper Book sales versus Digital Book Sales

Sam Larson

Books, boring, but a heavy part of our economy. Books are everywhere! But, the Ebook is taking over the paper book. Looking at the opportunity cost between Ebooks and paperback books, is that Ebooks are much less expensive. The average price for an Ebook is about $8.00, compared to a paperback book falls ahead by $13.95-$17.35. There’s a lot of opportunity cost there.

Think about how many people buy books a year, whether it be for fun or for school. Then think about the people help to make the books. At The New York Times company, they employ 3,710 people. This is just one company, there are hundreds more out there, and lots of job positions. About 133,130 people are employed in the publishing industry (not including labor workers). If we were to lose the paper book industry, it would significantly hurt our economy. Not only are there just paperback books there is also hardback books, and a major money maker, textbooks. One of the largest textbook companies is McGraw-Hill Education, this a US based company. However, in the world, they are not in the top five, instead are number nine. The revenue they bring in is about $2.190 million as of 2015. While this isn’t a large number, there are many other publishing companies in the US, each making less than the other, however. But colleges somehow manage to charge people about $68 for a textbook, however, some textbooks cost about $200.

Now, let’s look at Ebooks. Ebooks are not on the rise, based on a publisher’s survey. The Ebook has sold 424 million books, while paperback books sells 1.18 billion books. However, they only make 6.74 billion as of 2016. Compared to how each item is created, the paperback book has more components of being put together. For example, the Ebook only requires the publishing company. There are no labor workers to help build the books, because it’s only digital, unlike paperback books. Therefore, they are able to bring in more money from the books and charge less, because there isn’t as many people involved of the publishing of the book. Overall, books bring in a lot of revenue for the economy.

Writer, Staff. "Book Sales Decline at the Start of 2016." Book Business. N.p., 27 June 2016. Web. 27 Mar. 2017. <http://www.bookbusinessmag.com/article/book-sales-start-2016-ebooks-decline/>.

Pignataro, Juliana Rose. "Book Trends 2016." International Business Times. N.p., 16 Nov. 2016. Web. 27 Mar. 2017. <http://www.ibtimes.com/book-trends-2016-are-paperback-hardcover-print-sales-rising-e-book-sales-falling-2447017>.

"Amazon." Amazon - Press Room - Press Release. N.p., n.d. Web. 27 Mar. 2017. <http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1521090>.

"Careers Information." About CollegeGrad.com's Career Profiles - CollegeGrad.com. N.p., n.d. Web. 27 Mar. 2017. <https://collegegrad.com/careers/about#conditions>.

"About the Publishing Industries (except Internet) Subsector." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, n.d. Web. 27 Mar. 2017. <https://www.bls.gov/iag/tgs/iag511.htm>.

"Open Textbooks Can Help Students save Money on Course Materials | Money." Time. Time, n.d. Web. 27 Mar. 2017. <http://time.com/money/4017003/high-text-book-prices-solution/>.

"The World's 57 Largest Book Publishers, 2015." PublishersWeekly.com. N.p., n.d. Web. 27 Mar. 2017. <http://www.publishersweekly.com/pw/by-topic/international/international-book-news/article/67224-the-world-s-57-largest-book-publishers-2015.html>.

"U.S. Publishing Industry's Annual Survey Reveals Nearly $28 Billion in Revenue in 2015." U.S. Publishing Industry's Annual Survey Reveals Nearly $28 Billion in Revenue in 2015. N.p., n.d. Web. 27 Mar. 2017. <http://newsroom.publishers.org/us-publishing-industrys-annual-survey-reveals-nearly-28-billion-in-revenue-in-2015>.

* All Products Require an Annual Contract.    Prices Do Not Include Sales Tax    (New York Residents Only). "U.S E-book Sales Revenue 2014 | Statistic." Statista. N.p., n.d. Web. 27 Mar. 2017. <https://www.statista.com/statistics/190800/ebook-sales-revenue-forecast-for-the-us-market/>.

The Truth about YouTube Red

Macey Wolfe

Reuter

Economics B2

27 March 2017

The Truth About YouTube Red

As the third most visited website in the world, YouTube sees over 30 million viewers who watch nearly five billion videos per day (Donchev). In October 2015, Google, the owner of YouTube, launched YouTube Red, an upgraded paid subscription based version of YouTube.

Video

The YouTube Red subscription service is $9.99 per month for no advertisements, exclusive content, the ability to listen to videos without being in the app and the ability to download videos to view offline (Ingraham). Despite these benefits, YouTube Red is overall not worth it for creators or consumers.

YouTube has claimed this option will essentially give more profits to the creators (Spangler). However, creators can more easily turn profits using sponsorships, advertisements or Patreon, a website which allows subscribers to donate money to creators to make content (Dennis). Thus, money isn’t a large incentive for having YouTube Red content.

Some YouTube Red content is later released. Creators recognize withholding content will decrease their content demand, as viewers can find substitutes that are available for free on regular YouTube. The reason why YouTube is able reach billions of people is because the website is free (Stelter). Therefore, the YouTube Red subscription to gain access to special content may drive viewers away, which is bad news for creators who need viewers to make money. Consequently, YouTube Red is not beneficial for creators.

For most consumers, the marginal benefit of having no ads, special content and downloaded videos does not outweigh the marginal cost because the cost is so high (Dennis). Since some YouTube Red content is released later, consumers will eventually be able to get the “exclusive” content (Dennis). Furthermore, the other “benefits” of YouTube aren’t particularly unique. People are still able to listen music or watch videos via other platforms such as Spotify or Netflix. In conclusion, YouTube Red is not worth it for consumers.  

Dennis, Riley J. “4 Reasons Why YouTube Red is Bad for the YouTube Community.” MUO. MakeUseOf, 26 Oct. 2015, http://www.makeuseof.com/tag/4-reasons-youtube-red-bad-youtube-community/

Donchev, Donny. “36 Mind Blowing YouTube Facts, Figures and Statistics - 2017.” Fortunelords. Fortunelords.com, 23 Mar. 2017, https://fortunelords.com/youtube-statistics/.

Ingraham, Nathan. “YouTube Red is Google’s Ad-free Subscription Video Service.” Endgadget, Aol Inc., 21 Oct. 2015, https://www.engadget.com/2015/10/21/youtube-red-google-ad-free-video-subscription/

Spangler, Todd. “YouTube Red Launches:  Is It Really Worth $10 Per Month?.” Variety. Variety Media LLC, 28 Oct. 2015, http://variety.com/2015/digital/news/youtube-red-launches-10-per-month-1201629071/

Stelter, Brian. “YouTube launching ad-free $10-a-month Subscription Service.” CNN Media. Cable News Network, 21 Oct. 2015, http://money.cnn.com/2015/10/21/media/youtube-subscriptions/.

Economic Benefits of Raising Backyard Chickens

Chloe Krumenacher

Mr. Reuter

Economics

27 March 2017

Economic Benefits of Raising Backyard Chickens

I’m sure you have heard from your grandparents or other relatives that they were raised on a farm that had lots of chickens. Their chores were to collect the eggs and feed all the birds. Raising chickens was an important part of the past in sustaining families. Now they are becoming an economic benefit of the present. There are a couple opportunity cost to raising chickens. You might have to put in a little bit more work than grabbing eggs from the store refrigerator but the product quality you receive from your backyard chickens cannot be beat.  

According to the National Chicken Council, in 2014 per capita egg consumption in the U.S. was 263. That’s the total number of eggs produced, divided by the U.S. population. Egg consumption increased by 4.6% between 2013 and 2014 (Josephson). “The top egg producer in the U.S., Cal-Maine Foods, housed 34.2 million layers (chickens that lay eggs) in 2014” (Josephson). That’s a lot of eggs, and a lot of money your family is spending on eggs. If your city, village, or town allows chickens and you have a large enough backyard, chickens might be a great compliment to your backyard and to your total revenue.

The pie chart here is used to show how much some states and areas of the country rely on poultry for a food source whether that is the eggs the chicken produces, or the chicken itself. Most of the poultry in Georgia is raised in residents backyards.

The cost of starting your flock is fairly inexpensive. The biggest investment is the coop that the chickens will reside in. Feed and basic supplies are also inexpensive. When it comes to how many chickens, the marginal benefit outweighs the marginal cost. A chicken costs about $3 and if you were to buy the maximum amount of chickens allotted in your location it would make more sense and benefit you more.

Raising chickens isn’t a get rich quick scheme, it’s more about the enjoyment and benefit you get from those fresh, high quality eggs. Most chicken raisers are able to break even with the expense costs or earn some profit. The economic benefit is being able to have a sustainable food source in your backyard. The eggs that you buy from the grocery store are weeks old before they even make it to the store refrigerators. That’s why the eggs are refrigerated in the first place. Fresh eggs from your backyard flock don’t require refrigeration because the egg has a natural coating that keeps the inside of the egg fresh for weeks if they aren’t washed. In Europe they don’t even refrigerate their eggs. In fact, the US is one of the few countries that does. Backyard chicken raisers are saving some money on electricity because they don’t refrigerate their eggs, and if more people did the same imagine the impact we could create.

One other great use for backyard chickens is free fertilizer! The waste chickens produce is great for gardens and pest control. Instead of spending a pretty penny on chemical filled fertilizers, you can simply place the chicken waste in your garden. It saves time and money, making your home more green friendly. Also pest control is a big one. The chickens during the day will free range and eat bugs, grubs and anything good they can find. They especially take care of the pesky mosquitoes and ticks. We live in a very wooded area that would normal be consumed by mosquitoes and ticks during the summer, but because of the chickens we don’t have to spend money on having landscaping companies spray our yard with bad chemicals to get rid of the pesky things.

If more people got into raising chickens it would create an economic impact. At one point in our past Uncle Sam was encouraging Americans to keep backyard chickens to sustain a family. I have a feeling that in the near future this will come up again.

Josephson, Amelia. "The Economics of Raising Chickens." SmartAsset. N.p., 05 Feb. 2016. Web. 27 Mar. 2017.

Smartasset. "The economics of raising chickens." CBS News. CBS Interactive, 17 Feb. 2016. Web. 28 Mar. 2017.

Happy Bunny Day

Brooke Siebert

Happy Bunny Day

Now that Easter is almost here that means that people are going to start shopping for supplies. With consumers increasing the demand of Easter related goods, stores will raise their prices in order to gain a greater profit while satisfying the consumers needs. But stores will also supply more of candy, flowers, decorations and spring gear.  Even though consumers might not like how high the prices are that doesn’t stop them from buying to enjoy this holiday.

This year for Easter retail stores are expecting the total revenue to be 17.3 billion on Easter gifts. According to the article Talk Business and Politics it says “Consumers will spend $5.5 billion on food, $3 billion on clothing, $2.7 billion on gifts, $2.4 billion on candy and $1.2 billion on flowers.” This means that an average person will be spending $146 on Easter gifts. With not only this holiday bringing in profit it also leads to a surplus of supplies.

Easter is a great holiday to share with friends and family, therefore buying supplies is a big deal to make this holiday even greater. Not only does buying gifts make you as the consumer happy but also the stores you are buying from creating equilibrium. Even though Easter is a religious holiday 80% of people in the United States celebrate this holiday. Without celebrating people are losing the opportunity cost of spending time with family and friends and eating all the sugar treats.

Cited Sources:

Ogg, Jon C. "2013 Economic Impact of Easter at $17.2 Billion, Likely Undercounted." 247wallst.com. Apr. 2013. Mar. 2017.

"Retailers expect consumers to spend $17.3 billion on 2016 Easter sales." Talk Business & Politics. 21 Mar. 2016. Mar. 2017.

Will Lululemon Fall to Competitors?

Kiley Fetherston

Mr. Reuter

Economics B1

28 March 2017

Will Lululemon Fall to Competitors?

The law of demand states that if price increases, the quantity demanded will decrease. Therefore, us, as consumers, tend to steer away from expensive products, especially if there is an alternative with similar value at a decreased amount. However, it has been noticeable that certain people are still drawn to certain products - despite the number on the price tag. Lululemon Athletica, a company specializing in athletic apparel, continues to raise their prices, while still drawing the attention of men and women across the world. Even though there are many other companies that sell similar products, such as Nike or Athleta, Lululemon should not fall to competitors in the near future due to their known quality, marketing strategies, and consumer tastes.

Lululemon Athletica, Inc. is a yoga and exercise apparel company that has flourished since 1998. Known for their original yoga designs created for women, Lululemon has broadened into an empire of athletic clothing to wear for running and training for both women and men. Since the company brands itself not only as a product, but a lifestyle, most men and women purchase their products for fashion apparel, not athletic purposes. A drawback in the company, however, is the knowledge of high prices in clothing that push the limit of most consumers. But due to this advertising as a lifestyle strategy, Lululemon has shown continuous success with their consumers. The opportunity cost of purchasing this expensive athletic clothing is to look fit and active, while still owning some style. Therefore, as you can see from the data below, the company’s revenue continues to increase. From January 2011 to February 2015, it has grown from approximately $711 million to $1.8 billion due to this marketing strategy, an 18% growth which surpasses competitor, Nike’s 11% growth.

With other athleisure companies on the rise, such as Nike or Under Armour, people are questioning if Lululemon will continue to demonstrate growing success. With their prices running much higher than other companies who sell similar apparel, as shown in the table below, what is keeping Lululemon from falling under such competitors? In a monopolistic competition where many firms sell similar products, there needs to be a way to go above and beyond to drawn the attention of consumers. Lululemon has mastered this concept. Instead of spending money on marketing and advertisements, a method Nike is known for, Lululemon builds its products with new, synthetic fabrics and higher qualities that specialize in comfort and style (Ballard). When a pair of running pants, or leggings, average at $100, customers will still pay the price because of the better quality. Due to the materials and lifestyles that are being advertised to their consumers, the consumer tastes increase the demand of Lululemon’s products and their better quality.  

Even though most people are drawn to cheaper prices, certain brands and higher qualities bring consumers to look past the price tag. With this marketing strategy that Lululemon continuously demonstrates, they will see economic growth in these products for many more years to come. According to The Motley Fool, Lululemon is aiming to double their revenue in the next five years, which is a very achievable goal. When it comes to top quality and marketing an athletic lifestyle, consumers will begin to increase the demand of their products. Although it is a small company compared to others and its prices exceed what most can pay for, Lululemon should not fall to its competitors, especially when its market continues to grow.

Works Cited

Ballard, John. "Better Buy: Lululemon Athletica Inc. vs. Nike Inc." The Motley Fool. The Motley Fool, 14 Feb. 2017. Web. 26 Mar. 2017. <https://www.fool.com/investing/2017/02/14/better-buy-lululemon-athletica-inc-vs-nike-inc.aspx>.

"Lululemon - About Us." Lululemon . Lululemon Athletica, Inc. , n.d. Web. 26 Mar. 2017. <http://info.lululemon.com/about?mnid=ftr;en-US;about-us>.

Thangavelu, Poonkulali. "Understanding Lululemon's Business Model." Investopedia. N.p., 28 May 2015. Web. 26 Mar. 2017. <http://www.investopedia.com/articles/investing/052715/understanding-lululemons-business-model.asp>.