Doctoral Dissertations

Date of Award

3-1971

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

Merton B. Badenhop

Committee Members

Thomas J. Whatley, Joe A. Martin, Charles L. Cleland, Hans E. Jensen

Abstract

This study was designed to achieve the following objectives: (1) to determine the costs and returns associated with urban and rural golfing facilities in Tennessee; and (2) to identify and evaluate socioeconomic factors affecting participation in golf on urban and rural courses in Tennessee.

Data on costs and returns were obtained on nine 18 hole and four 9 hole urban golf courses located in the major metropolitan areas of Tennessee and on 10 nine hole rural golf courses located in rural communities with a population of 5,500 or less. Data on participation rates and socioeconomic factors were obtained from 1,796 golfers playing the urban courses and 525 golfers playing the rural courses. Regression techniques were used to analyze the effect of the socioeconomic variables on annual participation in golf.

Capital investment per golf course for the nine 18 hole urban courses averaged $494,309. Construction costs accounted for 50 percent of the total capital invested, land costs, 39 percent, and equipment costs, 11 percent. For the four 9 hole urban courses, total capital investment per course was $302,988. Land costs accounted for 56 percent of the total capital invested, construction costs, 37 percent, and equipment costs, 6 percent. Capital investment for the 10 nine hole rural golfing associations averaged $183,559. Construction costs accounted for 73 percent of the total capital invested, land costs, 17 percent, and equipment costs, 10 percent,

Annual operating costs for the nine 18-hole urban golf courses averaged $110,123 per course. Variable costs accounted for 89 percent and fixed cost 11 percent of the annual operating costs. For the four 9 hole urban courses, annual operating costs averaged $57,999 per course. Variable costs accounted for 91 percent and fixed costs 9 percent of the annual operating costs. Annual operating costs for the 10 nine hole rural golfing associations averaged $34,869 per association. Variable costs accounted for 66 percent and fixed costs 34 percent of the annual operating costs.

Annual gross income for the urban golf courses averaged $150,000 per course for the 18 hole courses and $61,640 per course for the nine hole courses. The daily green fee ticket was the principal source of income for all urban courses. Annual gross income for the 10 nine hole rural golfing associations amounted to $39,691 per association. Annual membership dues were the principal source of income for these associations and accounted for 67 percent of the annual gross income.

Net income from the operation of the nine 18 hole urban golf courses averaged $40,867 per golf course, or 8.2 percent return on capital investment. Net income for the four 9 hole urban courses averaged $3,641 per golf course, or a 1.2 percent return on capital investment. For the 10 nine hole rural golfing associations, net income averaged $4,822 per association, or a 2.6 percent return on capital investment.

The user demand model used to explain variations in annual participation rates in golf produced results that, in general, were below expectation. The independent variables specified in the model accounted for only 11 percent of the variation in annual participation rates on municipal courses in the Memphis area, 14 percent in Nashville, 17 percent in Knoxville, and 29 percent in the Johnson City area, Only 10 percent of the variation in participation rates on the rural golf courses was explained by the variables included in the model. The analysis, however, identified a number of socioeconomic variables which significantly influenced annual participation rates. These variables were age, education, income, the price of the golfing unit, and occupation.

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