Economic Impacts of Scuba
Diving on New York’s Great Lakes
Alan R. Graefe, Penn State University
Sharon L Todd, SUNY Cortland
Introduction
The protection and use of underwater resources has become a
major management issue worldwide. Davis
and Tisdell (1996) suggest that the growing popularity of scuba diving has
caused overcrowding and environmental damage to dive sites. Coral reef ecologists are concerned with
damage caused by inexperienced divers, who disturb fragile reef environments by
stirring up sediments, interacting with reef animals, breaking coral, and
leaving litter (Fishman, 1991).
The issue of use versus preservation of underwater
resources also exists on New York’s Great Lakes. Specifically, two factors have contributed to a heightened interest
in cultural resources: increased water clarity due to infestation of zebra
mussels and pollution control programs, and passage of the 1987 Abandoned
Shipwreck Act (White, 1998). Citizens,
tourism professionals, management agencies and community developers concerned
with the protection and use of underwater cultural resources in New York’s
Great Lakes have begun working together to develop policies regarding
underwater cultural resources. Scuba
divers play an important role in these efforts due to their close interaction
with underwater resources and their potential for increasing economic impacts
to local communities.
Recreational scuba diving is a rapidly growing component of
the marine recreation and tourism industry.
In 1991, Fishman reported that there were more than 4 million certified
Scuba divers in the United States, and the number of divers was expected to
increase worldwide by at least 10 million during the 1990s. By 1997, however, a consumer study
commissioned by the Diving Equipment and Marketing Association found that at
least 16 million Americans consider themselves to be active divers. This estimate was based on a Gallup
Organization survey of more than 800 people in all 50 states. Even more astounding was that an additional
75 million Americans wanted to know more about diving, implying that 45 percent
of the American population were either active Scuba divers or interested in the
sport. Another study of 1,200 U.S.
adults conducted by the Travel Industry Association of America determined that
snorkeling/Scuba diving was second only to white water rafting as the most
popular outdoor sport, based on number of trips taken in the last five years
(PADI, 1998).
Another factor fueling growth in diving is the changing
character of the market. Lurie (1998)
claims that women make up about 40 percent of new Scuba divers. Because anyone can participate, Scuba diving
and snorkeling are among the country’s fastest growing family activities. “In the past, recreational Scuba was viewed
as an activity limited to young men who left their wives or children on the
beach while they enjoyed the underwater sights. Today, everyone’s getting in the water and they are enjoying it
so much that they’re coming back time and time again” (Young & Atkinson, 1997).
Cline Group Advertising reported that Scuba diving had
grown to a $2.6 billion industry (Forbes, 1996), with $650 million spent per
year on equipment and the rest divided among travel, lodging, dining, boat
hiring and related expenses. They also
determined that most divers rent their equipment from one of the 2,500 dive
shops in the U.S. and that they dive an average of 2 to 3 times per year.
Industry sources suggest that diving sales in the northeast
region of the U.S. lag behind those in the south and west; the northeast thus
has tremendous potential for growth in the diving market. However, little information exists on the
extent of diving in the northeast, or most other areas for that matter. Davis and Tisdell (1995) point out that
there is considerable uncertainty about the extent of diving activity even for
a major diving area like Queensland, Australia, home of the Great Barrier
Reef.
Peterson et al. (1987)
documented that, as early as the mid 1980s, there was a population of divers
who actively seek Great Lakes dive locations.
Their study found that Michigan scuba divers spent an average of $1287
on all diving trips made during the 1986 season, with over half of this
spending occurring in communities near the diving location. Two-thirds of the expenditures were for
goods and services not directly related to the diving activity. This study also
demonstrated some of the difficulties encountered in studying scuba divers,
including obtaining a representative sample of divers who use a given resource
and getting a good response rate from the diving community. Peterson et
al. (1987) developed their profile of Great Lakes diving activity based on
three sources of divers in Michigan (a previous diver survey and mailing lists
from two dive shops). Their mail survey
received a response rate of 36.4%.
Holecek and Lothrop (1980) surveyed Scuba divers residing
in Michigan, Ohio and Indiana to determine their use of shipwrecks and other
underwater resources. Their sampling
frame was provided by a private firm and was based primarily on listings from
the National Association of Underwater Instructors (NAUI). The authors acknowledged three potential
sources of bias in their sample: over-representation of younger, recently
certified divers; a large number of undeliverable surveys (21%); and
non-respondents to the survey (49%).
This study found evidence of both rapid growth in diving (indicated by a
disproportionate number of new divers) and a high dropout rate among
divers. Holecek and Lothrop’s economic
analysis focused on divers’ total investment in diving equipment and their trip
expenditures for all diving trips during the 1977 diving season. Results showed an average investment of $600
in diving equipment and $300 in trip expenses.
Vrana (1992) used a sample Skin Diver magazine
subscribers from five regions in the eastern and central United States to
survey divers who are familiar with cold water diving. His study focused on diving activity and
experience levels, benefits sought through diving, attitudes towards various
resource management considerations, and demographic characteristics. The mailing of 2,000 questionnaires achieved
a 41% response rate.
This paper examines the economic
impacts of scuba diving on New York’s Great Lakes (NYGL) in 1999. Analysis focuses on identification of the
amounts of money divers spent in Great Lakes communities as well as elsewhere
in New York and outside of the state.
This analysis is part of a larger study conducted for the New York Sea
Grant Institute whose objectives included: providing baseline and background
data on the scuba diving industry in New York’s Great Lakes region; estimating
the economic impact of scuba diving on New York’s Great Lakes; assessing trends
that are affecting the scuba diving industry, including dive charter
operations, dive shop owners, and dive clubs; identifying the barriers and
constraints preventing, limiting, or causing people to cease participation in
scuba diving; and testing the applicability of the theoretical models of
specialization and amateur/professional development of recreation activity
participation to scuba diving.
Methods
Three methods of data collection were used (focus
group interviews, a mail survey, and phone interviews). A total of six focus groups were conducted
in key diving locations across the New York Great Lakes Region. Major themes of discussion were gleaned
from the focus groups to aid in the development of a written questionnaire. The second method of data collection
involved a mail survey with a sample of active and inactive New York State
divers. A database of approximately
6,700 individuals was compiled from various sources, including a national
certifying agency, a statewide organization, a dive symposium, a dive shop, a
non-profit organization, and several dive clubs. Addresses were stratified by major regions across the state
(Figure 1). Emphasis was placed on
contacting divers in the regions closest to the Great Lakes. A total of 2,850 surveys were mailed in
October, 1999, followed by reminder postcards and a second mailing of the
survey. The third method of data
collection involved phone interviews of dive shop owners and dive charter boat
operators within the state. Primary
areas of discussion included perceptions of trends and changes in the dive
market and industry, barriers and constraints for customers and businesses, and
measures being taken to overcome these obstacles. Data for this paper were drawn primarily from the mail survey of
divers.
Seventeen percent (490 surveys) of the surveys were
returned as either undeliverable or having been sent to non-divers. As noted earlier, this relatively high
undeliverable rate is not uncommon in diver surveys due to the unavailability
of relevant and up to date mailing lists.
Of the remaining 2,360 potential respondents, 869 usable questionnaires
were returned, yielding a 37 percent response rate. A non-response bias check was conducted by telephone. Non-respondents did not differ significantly
from respondents in age, gender, education level, number of years spent diving,
or stage of development as a diver.
However, significantly lower percentages of non-respondents were
certified (76% vs. 95% of respondents) or active divers (48% vs. 69% of
respondents).
Respondents were asked to report two categories of diving related expenditures: yearly expenses (items typically purchased on an occasional or periodic basis like equipment, insurance, instruction, etc.) and trip expenses (items typically bought on a daily basis while on a diving trip like air fills, meals and lodging, fuel, etc.). For the yearly expenses, the average amount spent and percentage of divers spending something for each item were tabulated. Expenses were broken down by location of spending (Great Lakes region, NY state, outside of NY) and region of residence. Average spending profiles were extrapolated into population estimates based on an estimate of the proportion of divers within the population for each region. Diving trip expenses were handled in the same manner but also required screening out of trips outside of the Great Lakes region and extrapolating expenses for a single trip to the total number of trips to the Great Lakes region in the past year.
The accuracy of our results depends on two major
factors: the sampling error associated with our survey data and the population
estimate used for extrapolating individual diver profiles to the population of
all divers. Relative to the former,
spending estimates are based on samples of 474 upstate New York residents and
320 Great Lakes Region residents, which should yield margins of error of plus
or minus 4 to6 percent. Regarding the
population estimate, there is no listing of relevant divers, nor even a simple
value measuring the proportion of the population that dives in a given
geographic area. The Diving Equipment
and Marketing Association has several estimates for various segments of the
diving market (e.g. 13.3% ever tried diving, 8% “active divers,” 3.8% certified
divers, 2.7% went Scuba diving in the last 12 months). We used the 3.8% figure for certified divers
as a conservative estimate of the population of potential Great Lakes
divers. Ninety-five percent of our
respondents reported that they were certified divers. In addition, 69 percent of the respondents had gone diving in the
past twelve months, which closely approximates the ratio of the DEMA estimates
for certified divers and those who reported diving within the previous year
(71%).
Results
Annual Diving Expenses. Yearly expenses for diving-related items were tabulated
separately for active and inactive divers (Table 1). While inactive divers naturally spent less than active divers, they
did report some diving expenditures.
For example, even though someone may not have dived during the previous
twelve months, they may have bought diving equipment or some other
diving-related item or service.
One-fifth of inactive divers (20%) reported at least one diving related
expenditure during the previous year.
They spent an average of $69.31 for the year. Less than one-tenth of inactive divers reported spending money
for any particular expense category.
The most common expenses reported by inactive divers were for equipment
purchases (8% of inactive divers, average amount spent $46.74) and diving
courses or workshops (5% of inactive divers, average amount spent $12.34).
Active divers reported spending an average of $939
for yearly diving expenses. More than
two-thirds of this total was for equipment purchases ($639.83). The next largest yearly expenses for active
divers were for diving courses, workshops or seminars ($124.11). The average spending estimates may appear
low, but that is because they include many individuals who spent nothing for
each item or category. In total, 84% of
active divers reported spending something for at least one of the yearly
expense categories. The most common
individual category reported was equipment purchases, with 62% of active divers
reporting some equipment purchase during the previous year.
Table
1. Yearly Spending Patterns of New York
Divers.
|
|
Active Divers (n=586) |
Inactive Divers (n=258) |
||
|
|
Percent of people spending some $ |
Average amount spent |
Percent of people spending some $ |
Average amount spent |
|
Equipment purchases |
62% |
$639.83 |
8% |
$46.74 |
|
Equipment repairs |
41% |
$49.25 |
5% |
$3.21 |
|
Tank inspections |
50% |
$23.33 |
7% |
$2.19 |
|
Dive insurance |
36% |
$30.76 |
5% |
$2.68 |
|
Dive maps, books, and magazines |
40% |
$25.65 |
6% |
$2.06 |
|
Dive courses, workshops, seminars |
30% |
$124.11 |
5% |
$12.34 |
|
Dive trade shows |
11% |
$46.06 |
<1% |
$.08 |
|
Total |
84% |
$939.00 |
20% |
$69.31 |
Survey data showed that divers living within the Great Lakes region and in upstate New York spent nearly $50 million in the Great Lakes region during the previous year on diving related expenditures (Table 2). Most of this money (76% or $35,521,544) was spent by divers living within the region. The remaining 24% ($11,337,595) was spent in the Great Lakes region by residents of upstate New York (i.e. this money was imported from upstate New York into the Great Lakes region). We cannot estimate the amount spent by divers from the New York Atlantic region or from out of state because no divers from those areas reported spending money in the Great Lakes region on yearly diving expenses. We would expect this amount to be fairly small, as most divers would make these types of expenditures closer to home (as reflected by the lower amounts spent by upstate New Yorkers within the Great Lakes region).
More than $34 million (73% of the total yearly diving expenses made within the NY Great Lakes region) was spent on equipment purchases in the Great Lakes region. The next largest category of expenditures was dive courses, workshops and seminars, followed by equipment repairs.
Table 2. Yearly Expenditures in Great Lakes Region, by region of residence.
|
|
Region of Residence |
|||
|
|
Great Lakes Region (320) |
Upstate New York (n=474) |
||
|
|
Average amount spent per diver in the Great Lakes Region |
Total spent by all divers living in regiona |
Average amount spent per diver in the Great Lakes Region |
Total spent by all divers living in regionb |
|
Equipment purchases |
$266.37 |
$25,940,709 |
$48.15 |
$8,417,968 |
|
Equipment repairs |
30.78 |
2,997,541 |
4.93 |
861,902 |
|
Tank inspections |
12.18 |
1,186,161 |
2.62 |
458,049 |
|
Dive insurance |
5.34 |
520,041 |
0.72 |
125,876 |
|
Dive maps, books, and magazines |
7.43 |
723,578 |
1.81 |
316,439 |
|
Dive courses, workshops, seminars |
41.33 |
4,024,963 |
6.6 |
1,153,865 |
|
Dive trade shows |
1.32 |
128,550 |
0.02 |
3,497 |
|
Total |
$364.75 |
$35,521,544 |
$64.85 |
$11,337,595 |
a Total estimated by multiplying average spending per diver times 97,386 estimated divers living in the Great Lakes region (3.8% of the population)
b Total estimated by multiplying average spending per diver times 174,828 estimated divers living in the upstate New York region (3.8% of the population)
New York divers spent more money on yearly diving expenses in other parts of New York than in the Great Lakes region (Table 3). Great Lakes region divers spent an average of $60.65 in the remainder of the state, compared to the $364.75 they spent in the Great Lakes region for yearly expenses. But upstate New York divers spent an average of $250.34 in the remainder of the state, versus $64.85 in the Great Lakes region. In total, nearly $50 million was spent for yearly diving expenses in the state of New York (but outside of the Great Lakes region) by residents of upstate New York and the Great Lakes region. Most of this money (88%) was spent by residents of upstate New York, with the remaining 12 percent contributed by divers living in the Great Lakes region. Again, these estimates do not include any spending by divers living in the NY Atlantic region due to the small number of divers from this region in our sample. Unlike the amount spent by NY Atlantic divers in the Great Lakes region, the amount spent by these divers in the state of New York could be substantial, given the large population of this area (i.e. New York City).
Taken together, Tables 2 and 3 demonstrate that divers are most likely to make their yearly diving-related purchases in the region in which they live. Divers living in the Great Lakes region spent over $35 million in their region, compared to only $6 million in the rest of New York state. Conversely, those living in the upstate New York region spent $11 million in the Great Lakes region compared to $44 million in the rest of the state.
Table 3. Yearly Expenditures in New York State (excluding Great Lakes Region), by region of residence.
|
|
Region of Residence |
|||
|
|
Great Lakes Region (320) |
Upstate New York (n=474) |
||
|
|
Average amount spent per diver in New York |
Total spent by all divers living in regiona |
Average amount spent per diver in New York |
Total spent by all divers living in regionb |
|
Equipment purchases |
$48.44 |
$4,717,377 |
$190.39 |
$33,285,502 |
|
Equipment repairs |
3.91 |
380,779 |
14.19 |
2,480,809 |
|
Tank inspections |
1.9 |
185,033 |
7.71 |
1,347,924 |
|
Dive insurance |
0.08 |
7,791 |
3.35 |
585,674 |
|
Dive maps, books, and magazines |
0.54 |
52,588 |
5.63 |
984,282 |
|
Dive courses, workshops, seminars |
5.47 |
532,701 |
26.84 |
4,692,384 |
|
Dive trade shows |
0.31 |
30,190 |
2.23 |
389,866 |
|
Total |
$60.65 |
$5,906,460 |
$250.34 |
$43,766,441 |
a Total estimated by multiplying average spending per diver times 97,386 estimated divers living in the Great Lakes region (3.8% of the population)
b Total estimated by multiplying average spending per diver times 174,828 estimated divers living in the upstate New York region (3.8% of the population)
New York divers also spend a lot of money out of state on yearly diving expenses (Table 4). Again, equipment purchases was the number one expenditure category, followed by dive courses and trade shows. It is notable that divers from both the NYGL region and upstate New York were more likely to buy dive insurance through an out of state provider than through a New York based company. Not surprisingly, sampled divers were least likely to pay for tank inspections and equipment repairs out of state.
Table 4. Yearly Expenditures outside of New York State, by region of residence.
|
|
Region of Residence |
|||
|
|
Great Lakes Region (320) |
Upstate New York (n=474) |
||
|
|
Average amount spent per diver outside of New York |
Total spent by all divers living in regiona |
Average amount spent per diver outside of New York |
Total spent by all divers living in regionb |
|
Equipment purchases |
$115.05 |
$11,204,259 |
$68.85 |
$12,036,907 |
|
Equipment repairs |
2.87 |
279,498 |
0.38 |
66,435 |
|
Tank inspections |
0.42 |
40,902 |
0.21 |
36,714 |
|
Dive insurance |
11.55 |
1,124,808 |
6.25 |
1,092,675 |
|
Dive maps, books, and magazines |
6.22 |
605,741 |
2.83 |
494,763 |
|
Dive courses, workshops, seminars |
21.67 |
2,110,355 |
12.55 |
2,194,091 |
|
Dive trade shows |
15.88 |
1,546,490 |
18.41 |
3,218,583 |
|
Total |
$173.66 |
$16,912,053 |
$109.48 |
$19,140,169 |
a Total estimated by multiplying average spending per diver times 97,386 estimated divers living in the Great Lakes region (3.8% of the population)
b Total estimated by multiplying average spending per diver times 174,828 estimated divers living in the upstate New York region (3.8% of the population)
In sum, New York divers spent over $130 million on
yearly diving-related purchases during the previous year (Table 5). Over two-thirds (73%) of this money was
spent in New York state, with the remaining 27% spent outside of the state of
New York. Of the $58 million spent by
divers living within the NY Great Lakes region, 61 percent ($36 million) was
spent in the Great Lakes region. An
additional $6 million was spent elsewhere in New York and nearly $17 million
was spent out of state by divers from the Great Lakes region.
Divers residing in upstate New York spent almost $75 million on diving related expenses. Only about 15 percent of this total ($11,337,595) was spent in the Great Lakes region. Most of the dollars spent by upstate New Yorkers were spent in New York State but not in the Great Lakes region. One-fourth of the money spent by this group ($19 million) was spent out of state.
Table 5. Summary of Yearly Diving-related Expenses, by location of spending and region of residence
|
|
Region of Residence |
||
|
Location
of Spending |
Great
Lakes Region |
Upstate
New York |
Total |
|
Great
Lakes Region |
$35,521,544 |
$11,337,595 |
$46,859,139 |
|
Elsewhere
in New York |
$5,906,460 |
$43,766,441 |
$49,672,901 |
|
Out of
State | |||