Golf,supply and demand

Abstract

Macroeconomic conditions can have a substantial effect on the economic circumstances of individuals and therefore on the golf demand in a country. Using panel data on golf demand (number of golf players) and supply (number of courses), and indicators of the economic situation for 15 European countries, encompassing years 2000 through 2014, we estimate a dynamic panel data model in order to evaluate the influence of the economic conditions and golf supply on the number of registered golfers. Economic situation is assessed through two variables: the gross domestic product (GDP) and the main stock market index of each country. We also test the hypothesis of uneven effects of the GDP before and after the beginning of the economic recession. The most crucial finding is that from the start of the financial crisis, the level of GDP imposes statistically significant effect on golf demand, making those countries with higher GDP per capita the ones whose golf demand is harmed the least by the financial crisis. The number of golf players responds to the state of the economy after the start of the economic downturns, while the high persistence of the golf demand makes it rather difficult to find significant differences in the changes in GDP before the recession. We also find that the number of golf courses is not seen to bear a close relationship with the number of players unless we control for economic factors and business cycle. Within the economic factors, the level of development of a country, as measured by GDP per capita, outweighs stock market role in determining the demand for golf.