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ECONOMIC ANALYSIS: What we can learn from our kids' summer activities

July 14, 2008

Summer is at its midpoint, and with it comes the end of youth baseball, scout camp and a seemingly endless string of swim meets for the Hicks household.

Like many of you out there, I welcome a few more quiet evenings at home. But during those long third-inning stretches and sleepless evenings in a tent, I spent some time calculating how much we value these youth sports and activities. You might be surprised what this math tells us about ourselves.

When we hear about the value of scouting, or summer sports, most of us intuitively think of several things. First, it is fun. Fun matters, and has economic value (just ask Walt Disney). Second, it tends to promote healthier lifestyles. Third, these types of events promote community and social ties. I'm no sociologist, but it seems clear that the experience of having other parents coach, time events and set up tents provides an important lesson for kids. I also know it has economic value (I'll explain later). More important, youth sports and activities promote something that's coming back in vogue, and that is character.

I know these things have economic value because we spend so much of our time, energy and treasury on them. Economists have long used our willingness to spend on something that was hard to measure to impute value. Here's the math.

According to the Census, about one in four Indiana residents is under 18-a contingent that's about 1.5 million strong. As a back-of-the-envelope estimate, suppose that each child participates in one activity a year (probably understating the actual amount by a long shot).

Now suppose that for each kid, there is $100 in equipment, a $60 direct fee for participation, a $150 sponsorship payment and $10 in concession spending. And let's say that for each participant, the cost to local government is $50. (I think these are very conservative annual figures.)

By this count, we have about $555 million expended on kids' activities per year. In short, we Hoosiers value kids' activities at more than $500 million. This is about half the annual sales tax collections in the state (without counting a single hour of the time coaches and parents spent with kids-a commitment that dwarfs all other expenditures in terms of value). In a world that worries so much about the economy, it is helpful to know how families value the activities that aren't really part of commercial economic activity.

The economics are instructive of what we care about in our communities. But it shouldn't cause us to lose sight of the bigger things. As for me, watching my kids swim their hearts out on a relay and perform silly scout skits made my summer. And if my 7-year-old holds tight the life lessons of hard work and compassion embodied in just one baseball season that ended in a stinging, tearful loss, I'll judge it to have more value than a Ph.D.



Hicks is director of the Bureau of Business Research at Ball State University. His column appears weekly. He can be reached at bbr@bsu.edu.
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