Economic Stimulus and Arts & Entertainment, etc. and Indiana State Fair and Opinion and Economic Analysis

HICKS: Indiana State Fair offers fun kind of economic stimulus

August 10, 2009

This weekend heralds the start of the Indiana State Fair. I will be there at least once, I hope twice. It seems my 10-year-old daughter was disappointed with her watermelon-seed-spitting performance last year and is vowing a comeback.

My advice for those of you volunteering at that booth: Wear safety glasses.

The State Fair is a great treat, but there’s a lot more to it than the food and fun. In 2008, when gas prices were nearing $4 a gallon and the economy had begun to slow, more than 859,000 folks visited the fair. According to our estimates, spending at the fair last year led to more than $63 million in total economic activity. While some of this would have no doubt been spent in Indiana on other activities, this is a very respectable impact.

There’s also an interesting twist on the State Fair and the economy.

There is mounting evidence that during a recession people tend to stay closer to home for entertainment and amusement. My center released a study this spring that found museums, zoos and other cultural venues saw significantly increased traffic during economic downturns. I’ve spoken with a number of museum directors who confirm that attendance is at record highs. Unfortunately, their revenue is not rising since most of these institutions subsidize tickets with endowments and grants.

This year, with the economy still suffering and gasoline more than a dollar less per gallon, we expect much higher attendance. As a bonus, the State Fair Commission extended the fair through another weekend. As a consequence of a longer fair, weaker economy and lower gasoline prices, we predict 1.6 million visitors. Interestingly, that is almost exactly the state population in 1852, the first year of the Indiana State Fair.

I also have to admit a special fondness for the Indiana State Fair. Though I was raised in the Washington, D.C., area, both my parents were born on Hoosier farms. Each summer, we made the pilgrimage back to Indiana.

As I visited the fair last year, for the first time in almost four decades I was magically carried back to a time when men wore fedoras. All the scents and sounds were there. For just a whisper of a moment, I clearly saw my grandpa holding my hand and patiently explaining the workings of a steam thresher and marveling through the crowd at a gigantic hog. All the while, my 6-year-old self was distracted by a second elephant ear my indulgent grandma sneaked past Mom. I am certain I left with a bellyache.

These things matter, too, even if we haven’t included them in our economic-impact models. So, go to the Indiana State Fair this year. Watch a show, see the hogs, and buy an elephant ear. That said, I have just one warning. If you wander into the Ball State Backyard and happen upon the watermelon-seed-spitting contest, stay well back from the line of fire.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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