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Eclipse-onomics: On The Expected Economic Impact of the Great American Eclipse

On April 8, 2024, Arkansas will be in the path of totality for a total eclipse of the sun. Based on past experience, there are widespread expectations that our state will experience an enormous influx of visitors to view the event. The last total eclipse to cross the U.S, in August 2017, was cited as the largest single tourist event on record for some of the affected states.

This raises an obvious question: What will be the economic impact on the state’s economy?

The experience of states that were in the path of totality during the eclipse of 2017 can serve as a model for what to expect in Arkansas this year.  The 2017 eclipse took place on a Monday, as will this years eclipse, so the event became a weekend-long celebration. An economic impact study for Wyoming found that 77% of out-of-state visitors stayed overnight, with an average visit of 4.1 days and 3.5 nights.[1]  A study for Nebraska found that about 87% of visitors were from out of state, and estimated an average stay of three days.[2]

The analysis of Wyoming’s experience included the results of a detailed expenditure survey that broke down the spending of visitors by length of stay and type of accommodation (motel/hotel, camping, rental home, stay with friends or family, day trip-only). Lacking any specific information about how Arkansas might differ in terms of the mix of day-visitors versus overnight visitors or the choices of accommodation, we will simply adopt the average spending per visitor from the Wyoming survey, adjusted for inflation since 2017, as our out-of-state tourist spending profile.

Broken down by spending category, the Wyoming results suggest the following spending profile per visitor in inflation-adjusted 2024 dollars:

Table 1:Sources: Wyoming Office of Tourism, Bureau of Labor Statistics, and author’s calculations

By using these average spending per visitor figures, adjusted for inflation, we are implicitly assuming that the spending profile of the average visitor to Arkansas will match that of the average visitor to Wyoming in 2017.

The remaining question to consider is this: How many visitors will come from outside of Arkansas?

For that, we can turn to some research presented on the website GreatAmericanEclipse.com. Researcher Michael Zeiler presents a model of where eclipse travelers will visit the path of totality. With data on US population distribution from the U.S. Census and a model of the road distribution network using ArcGIS software from Esri, Zeiler estimates a model of eclipse visitation based on the idea that people who live closer to the path of totality are more likely to visit and that they will travel the shortest drive distance to get there.[3]

For Arkansas, Zeiler’s model predicts estimates of total visitors ranging from a low of 84,000 to a high of 337,000. That’s a pretty wide range, but it gives us some idea of the order-of-magnitude to expect.[4]

In an effort to narrow down the range, we compared the predictions of Zeiler’s model for states in 2017 to the actual outcomes. South Carolina was expected to have the largest number of eclipse travelers, with a range of 547 thousand to 2.2 million. The actual number of total eclipse tourists was estimated at 1.6 million, comfortably within the projection range.[5] In Wyoming, however, the estimated number of travelers (including in-state travelers) was estimated to be 261 thousand—36% higher than the 192 thousand high-end prediction. Similarly, eclipse travelers in Nebraska totaled 708 thousand, 52% higher than the model’s high estimate. One speculative explanation of this pattern of prediction errors is that people might be more inclined to travel further in the West and Midwest to see an eclipse than they are along the highly-populated Atlantic coast.

In the results reported below, we present an optimistic range of projections. We take our low-end projection to be the midpoint of Zeiler’s two forecasts for Arkansas. For the higher estimate, we take Zeiler’s upper bound and add 36% (the excess visitors observed in Wyoming). Specifically, we present scenarios in which the total number of eclipse travelers ranges from 210 thousand to 460 thousand.  Assuming that 75% of those total travelers are visiting from out of state (the Wyoming average), the total number of out-of-state visitors ranges from 160 thousand to 350 thousand.

Using these estimates for the number of travelers, along with the spending per out-of-state visitor spending in Table 1, we run a tourist-spending simulation in IMPLAN, an Input-Output model that traces spending effects through a local economy, in this case the State of Arkansas. The model simulations provide estimates that include both the Direct Effects of the spending, along with secondary effects of the tourism spending, which include Indirect Effects (measuring the increased demand that propagates along the supply chain) and Induced Effects (reflecting the extra spending generated by higher incomes and profits).

The results are reported in Table 2. The upper panel of Table 2 shows the estimated impact assuming 160 thousand out-of-state visitors. The direct impact on Value Added (State GDP), is approximately $29 million. Including the Indirect and Induced Effects, the total impact is $48 million. The projected increase in personal incomes, including direct and secondary effects, is nearly $27 million. The total impacts on employment are often described as the number of jobs supported by an economic activity or event, expressed in full-time equivalent (FTE) jobs over the course of the year. In this case, for a single-weekend event, the projections might better be interpreted as the FTE expression of the additional staffing that will be required to accommodate the short-term surge in demand.

Table 2:

The lower panel of Table 2 shows the impacts associated with a total of 350 thousand out-of-state visitors. In this case, the total impact on state GDP is over $100 million, with nearly $60 million in higher personal income and 1,700 full-time-equivalent jobs.

The magnitudes of the effects are linear with the values in the lower panel exactly 118.75% higher than in the upper panel (350/160), so the reader is welcome to adjust the results for different assumptions about total attendance.

This analysis had focused on a study area consisting of the entire state of Arkansas. For that reason, we deliberately excluded the effects of eclipse-related travel spending by Arkansas residents. If we were to focus more specifically on the areas within the path of totality, Arkansas residents from outside the path who were traveling to those counties/regions would generate additional impacts for the local destination economies.

Research by investigators at Forbes gives some insight into the relative impacts on regions that are likely to be the most affected.[6]  Looking at data from retail foot traffic over the course of the long weekend in August 2017, the Forbes researchers found that retail traffic increased by 16.2% within the path of totality. Regions just outside the zone saw an even larger impact: up 27.7%. Outside the vicinity of the eclipse path but within driving distance (200 miles), retailers saw a decline of 14.7%.  Moving further away, there was no notable impact. Overall, U.S. retail traffic dropped 12.7% during the hour of totality.

The projections presented here are rough estimates, but they convey the expected order-of-magnitude that the eclipse will have on the Arkansas economy. The numbers are big, but the event is temporary, so it represents a miniscule fraction of the state’s annual economic activity. If we consider state GDP for the month, our estimates represent an increase of only 0.3% to 0.7%. For the brief 4-day period, however, the magnitudes are non-trivial. Relative to an average 4-day period, the impact estimates presented here amount to about 2.5% to 5.5% of GDP with a 1.5% to 3.2% boost to personal incomes.

There are many uncertainties and contingencies about actual outcomes, with one big uncertainty being the weather. Nevertheless, many travelers have already laid their plans and made their reservations, and this is certain to be a significant, albeit temporary, economic event.

NOTES:

[1] Dean Runyan Associates, “2017 Eclipse Economic Impact Study: Summary of Findings,” Wyoming Office of Tourism, 2017.   https://buckrail.com/wp-content/uploads/2017/12/Wyoming-Office-of-Tourism-2017-Eclipse-Economic-Impact-Study.pdf

[2] Data from Nebraska are sourced from the Nebraska Tourism Commission, citied in, Jenn Gjerde and Angela Sears, “The Great American Eclipse Was Big Business for Nebraska,” https://visitnebraska.com/press-releases/great-american-eclipse-was-big-business-nebraska

[3] https://www.greatamericaneclipse.com/visitation

[4] There are two estimates for Arkansas in different locations on the website, with a lower estimate that ranged from 70,000 to 281,000. We are assuming that the higher range is the more recent estimate.

[5] Data from South Carolina are sourced from the South Carolina Department of Parks, Recreation and Tourism, cited in “KEY STATS: Total Eclipse Weekend Columbia, S.C.” https://totaleclipsecolumbiasc.com/key-stats-total-eclipse-weekend-columbia-s-c/

[6] Sean Lakind, “The Great American Eclipse and Its Effect on Retail Traffic,” Forbes Communication Council. https://www.forbes.com/sites/forbescommunicationscouncil/2017/09/12/the-great-american-eclipse-and-its-effect-on-retail-traffic/?sh=3fc4ca8d44b0