The Economics of Parks and Recreation

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The Economics of Parks and Recreation

• The Keys to Park and Recreations Future Viability

John L. Crompton

• www.rpts.tamu.edu/faculty/crompton.shtml

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Marketing Myopia

• Narrow, short-term thinking

TN Levitt HBR July-August 1960
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• The view that an industry is a customer-satisfying
  process, not a goods-producing process, is vital
  for all businessmen to understandGiven the
  customers needs, the industry develops
  backwardcreating the things by which customer
  satisfactions are achieved.

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• What business are we in?

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MOVIES 1950s
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What Business Are We In?

• Charles Revson
• In the factory we make cosmetics. In the store
  we sell hope.

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Gray and Greben, 1974

• Professional perspectives of parks and
  recreation are activity centered. Definition in
  terms of activities is unsatisfactory.
• We should have discovered long ago the nature of
  the business we are in, but we have notThe
  critical questions are not, How many were there?
  Or Who won? The critical question is, What
  happened to Jose, Mary, Sam and Joan in this
  experience.

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• Promotion/selling focuses on the needs of the
  seller.
• Marketing focuses on the needs of the buyer.

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• People expend their money and time resources with
  the expectation of receiving benefits, not the
  delivery of the services themselves. People
  dont buy programs or services they buy the
  expectation of benefits. Programs themselves are
  not marketable. Only their benefits have a value
  to client groups. The physical service or
  program itself is simply a vehicle for the user
  benefit it conveys. The distinction has enormous
  significance for the way in which a recreation
  and parks agency defines its businessParticipants
  purchase benefits the programs are simply a
  means to an end.

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• Social interaction with friends and family kin.
• Social interaction with previously unknown
  others.
• Ethnic and cultural identity
• A gain in prestige social recognition status.
  The mastery of particular skills may be regarded
  as a form of conspicuous consumption, which
  brings forth peer group recognition.
• Excitement an adrenaline rush exhilaration.
• Ego-satisfaction of achievement and
  accomplishment a desire to be successful.
• Security to be part of a group that gives a
  sense of belonging, connectedness to others, and
  sense of affection.
• The feeling of being important and having
  responsibility growth of self-worth and
  self-confidence.

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• Fantasy illusion offering temporary escape from
  the realities and routines of everyday life.
• Relaxation and alleviation of stress and tension,
  which may be obtained from hard or no physical
  effort.
• Catharsis from flow to alleviate negative
  tensions, anxiety, anger and unwanted adrenaline.
• Acquisition of knowledge satisfaction of
  curiosity.
• Feeling of well-being and vitality that derive
  both from exercise and physical fitness, and from
  mental alertness.
• Regression the desire to let your hair down
  and act in a puerile, adolescent way.
• Aesthetic enhancement derived from being in an
  attractive natural environment.
• Challenge and risk, which lead to
  self-exploration, self-discovery, and
  self-development and may be obtained from sailing
  or skydiving, or from acting, dancing, or fly
  fishing.

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Why Do People Go Fishing?

• To
• Experience the outdoors
• Develop skills
• Pit wits with the fish
• Be with friends
• Share skills with others especially children
• Mental change and relaxation
• Escape from pressures of everyday life
• Take a trophy
• Get food

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Motivations For Fishing
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Despite Limitations, User Benefits Are Important

• Meet basic human needs

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• A gain in prestige social recognition status.
  The mastery of particular skills may be regarded
  as a form of conspicuous consumption, which
  brings forth peer group recognition.
• Excitement an adrenaline rush exhilaration.
• Ego-satisfaction of achievement and
  accomplishment a desire to be successful.
• Security to be part of a group that gives a
  sense of belonging, connectedness to others, and
  sense of affection.
• The feeling of being important and having
  responsibility growth of self-worth and
  self-confidence.
• Acquisition of knowledge satisfaction of
  curiosity.

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20 Occupations Projected to Have the Largest Job
Growth
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Despite Limitations, User Benefits Are Important

• Meet basic human needs
• Individual users are the primary advocates and
  infantry in lobbying and referendums
• Some recreation services are explicitly intended
  to deliver only user benefits through enterprise
  funds
• The benefit chain of causality. Many
  community-wide benefits accruing to society are
  dependent on individuals receiving benefits

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Implications of the Range of Benefits Continuum
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Incongruency Associated with the User Benefits
Paradigm
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The Tax Support Downward Spiral
Increased Priorities Given to Revenue Objectives
Reduction in Priority Given to Communitywide
Objectives
Reduced Tax Support
Less Justification for Public Subsidies
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Gray and Greben
We are turning control of our social enterprises
over to the accounting mind. The accounting mind
reaches decisions by a method in which
short-range fiscal consequences are the only
criteria of value. Recreation and park services
will not survive in that kind of environment.
Most of the great social problems that disfigure
our national life cannot be addressed in a
climate dominated by that kind of value system
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The Voluntary Exchange Conceptualization of
Marketing
Fees
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• We are not a business. We are a social service
  which adapts the methods of business where they
  are appropriate

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• User satisfaction is an inadequate measure of the
  success of park and recreation agencies. Most
  taxpayers are not users of most of our services,
  so why should they support them? Need wider base
  of support.

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• User satisfaction is an inadequate measure of the
  success of park and recreation agencies. Most
  taxpayers are not users of most of our services,
  so why should they support them? Need wider base
  of support.
• It is off-site benefits that count highest, not
  on-site benefits.

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• User satisfaction is an inadequate measure of the
  success of park and recreation agencies. Most
  taxpayers are not users of most of our services,
  so why should they support them? Need wider base
  of support.
• It is off-site benefits that count highest, not
  on-site benefits.
• The fields sine qua non is that it performs a
  necessary service for the community beyond
  responding to the demands of particular user
  groups

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The Economic Rationale for Urban Parks

• Regenerated working people so they would be more
  productive workers
• Attracted tourists who spent money in the local
  economy
• Raised property values and the property tax base

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The Social Rationale for Urban Parks

• Public health
• Provided fresh air which counteracted miasmas
• Foster democratic equality
• Different classes mingle together while
  strolling, picnicking, and croquet playing, thus
  social homogeneity are nurtured
• Social coherence
• Parks were incubators of safety and social order
  they alleviated crime by strengthening local
  pride and affection of the inhabitants for each
  other

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Public Swimming Pools Rationale

• Pre 1890---Public baths no baths in houses
• Physical squalor cultivated moral delinquency and
  citywide epidemics
• Germ theory emerged
• 1890s---Athletics exercise, physical fitness
  boom among urban middle-class
• 1910-20---Alleviate delinquency among young
  working class males by expanding their surplus
  energy
• 1920-30---Community, gender and class integration
• 1930-40---CWA and WPA unemployment relief from
  heat and hard times for public and those who
  built the pools
• 1960s---Alleviate juvenile crime and rioting
  (hydrants)
• Today?---Alleviate drowning? Leisure literacy?

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Public Recreation

• Alleviate juvenile crime among young males
  encourage civility and civic responsibility

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• In a letter dated April 30, 1909, President
• William Taft wrote to the Playground
• Association of America I do not know
• anything which will contribute more to the
• strength and morality of that generation of
• boys and girls compelled to remain part of
• urban populations in this country than the
• institution in their cities of playgrounds.

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• The provision of leisure for its own sake still
  lacks political clout. It has to show other, more
  tangible returns, such as jobs, urban
  regeneration, alleviating delinquency or
  whatever, to be worth fundingOn its own it
  sounds too flippant It carries real political
  conviction only if advocated for other,
  instrumental, reasons too.
• Sue Glyptis Leisure and Unemployment

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The Voluntary Exchange Conceptualization of
Marketing
Fees
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The Community Benefits Paradigm
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The Tax Support Downward Spiral
Increased Priorities Given to Revenue Objectives
Reduction in Priority Given to Communitywide
Objectives
Reduced Tax Support
Less Justification for Public Subsidies
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The Tax Support Upward Spiral
Lower Priorities Given to Revenue Objectives
Increase in Priority Given to Communitywide
Objectives
Financial Pressure Eased
More Justification for Public Subsidies
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Present Position

• Recreation and park provision is perceived to be
  a relatively discretionary, non-essential
  government service. It is nice to have if it can
  be afforded.

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Reposition

• Position recreation and park services so that
  they are perceived to be a central contribution
  to alleviating the major problems in a community
  identified by tax payers and decision makers.

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• We are not identified with major problems which
  confront our total American Society which is a
  deep concern and disappointmentThe field
  should focus park and recreation services on the
  great social problems of our time and develop
  programs designed to contribute to the
  amelioration of those problems.
• Gray and Greben, 1974

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Benefits Related to Economic Prosperity

• Attracting tourists
• Attracting businesses
• Attracting retirees
• Enhancing real estate values
• Reducing taxes
• Stimulation of equipment sales

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Benefits Related to Environmental Sustainability

• Cleaning water
• Controlling flooding
• Cleaning air
• Reducing traffic congestion
• Reducing energy costs
• Preserving biological diversity

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Benefits Related to Alleviating Social Problems

• Reducing environmental stress
• Community regeneration
• Cultural and historical preservation
• Facilitating healthy lifestyles
• Alleviating deviant behavior among youth
• Raising levels of educational attainment
• Alleviating unemployment distress

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Credibility of the Evidence

• we have come a long way in essentially less
  than a half-century and have much to be proud
  ofIn fact, few areas of scientific inquiry have
  realized such advancements in so short a time.
• Driver, 1999

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• Critics who argue there is inadequate evidence to
  support the potential contributions of these
  benefits are wrong. There is strong enough
  empirical support for all of the benefits listed
  to justify their advocacy in formulating policy.

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• The big idea associated with repositioning is
  that funds are invested in solutions to a
  communitys most pressing problems. The term
  investing suggests a positive, forward-looking
  agenda with a return on the investments. Elected
  officials usually have no mandate to fund
  programs their mandate is to invest resources
  into solutions.

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Positioning Implications

• Legislators political platforms represent
  residents concerns
• The challenge is not financial, it is political
• Some services will be discretionary Strategic
  importance

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Public Recreation Challenges

• Emergence of non-profits
• Mega-church facilities

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Public Recreation Challenges

• Emergence of non-profits
• Mega-church facilities
• Emergence of commercial sector involvement

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Public Recreation Challenges

• Emergence of non-profits
• Mega-church facilities
• Emergence of commercial sector involvement
• Home-based electronic entertainment

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Four Positioning Axioms

• Axiom 1 Formulate a position statement
• How the agency wants to be identified in the
  publics eyes. What business are we in?
• The Benefits are Endless
• Discover the Benefits
• The Fun Experts
• Providers of the Good Things in Life

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• Economic Prosperity
• Lifelong Learning
• Investing in Youth Our Greatest Asset
• Step Up to Health Healthy Communities Start in
  Parks
• Healthy by Nature
• Greener, Cleaner, Safer, Stronger
• Healthy Lifestyles, Liveable Communities It
  Starts in Parks

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Healthy Parks, Healthy People

• The position communicates two principal health
  themes
• The role of Parks Victoria in keeping the
  environment healthy by addressing such core
  public concerns as enhancing air quality,
  enhancing water quality, and alleviating
  flooding.
• The physical and mental health benefits accruing
  to state residents using the parks.

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Four Positioning Axioms

• Axiom 1 Formulate a position statement
• Axiom 2 - Agencies do not position services,
  stakeholders do
• Bilingual connecting with their priorities

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Connecting with Business Stakeholders

• Investment in parks and recreation, not tax
  subsidy
• Not greenways or trails, but green
  infrastructure
• Amenities that are attractive to knowledge
  workers, not park and recreation facilities
• Not natural areas, but low maintenance areas

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• Midnight Basketball?
• Youth Enrichment Program
• Department of Recreation, Park, and Tourism
  Sciences

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Four Positioning Axioms

• Axiom 1 - Formulate a position statement
• Axiom 2 - Agencies do not position services,
  stakeholders do
• Axiom 3 Positioning is a relative rather than
  an absolute concept

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Four Positioning Axioms

• Axiom 1 - Formulate a position statement
• Axiom 2 - Agencies do not position services,
  stakeholders do
• Axiom 3 - Positioning is a relative rather than
  an absolute concept
• Axiom 4 - Focus
• Only a small number of positions should be used
• Communicate with messages that are consistent,
  persistent, and tightly focused

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• Unfortunately, even as late as the 1970s
  recreation and parks professionals attempt to
  remain all things to all people.
• Gray and Greben, 1974

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• In the ages of the sound bite, focus is
  everything. The message has to be pervasive and
  insistent.

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• Consider
• Positioning reflects peoples beliefs and value
  systems which are hard to change
• Agencies are not very agile
• Thus
• The time frame for accomplishing repositioning is
  likely to be relatively long (i.e., 10 years not
  1 year)

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Four Repositioning StrategiesHow to get from
Position A to Position B
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Real Repositioning

• Development of new services or restructuring
  existing services so they better contribute to
  addressing the issue expressed in the desired
  position.

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Four Repositioning StrategiesHow to get from
Position A to Position B
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Associative Repositioning

• Aligning with other organizations that already
  possess the desired position, and acquiring some
  of this position from the association.

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How to get from Position A to Position B
Four Repositioning Strategies
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Psychological Repositioning

• Changing stakeholders beliefs about the outcomes
  which emanate from the services an agency offers,
  so they better align with the desired position.

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The Process of Psychological Repositioning
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Testimonial Evidence

• Opinion leaders within the community
• Leaders from other communities (direct or
  vicarious)
• Independent experts

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The Process of Psychological Repositioning
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Change Value Perceptions
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Psychologically Repositioning a Bond Proposal for
a New Natatorium
The median home value in the community
is 150,000 Construction cost of the
natatorium 2 million Annual property tax
payment by an average home owner 12 Annual
operation and maintenance cost 100,000 Annual
property tax payment by an average home
owner 6 Total annual property tax payment by
an average home owner 18 which is 1.50 per
month In most years, there are heartbreaking
stories in the local news media of children from
this community who have drowned in area lakes.
An agreement with the ISD means that every fourth
grader in the community will be taught to swim,
so lives will be saved. Invest 1.50 per month
and save a childs life!
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Decline in the NYC Parks and Recreation Budget
Relative to Budget Changes in other Departments
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The Process of Psychological Repositioning
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Aligning with the Prevailing Schemata and
Nomenclature

• The council rejected a proposal to commit 1.5
  million to purchase 150 acres of land for a youth
  athletic field complex. They recognized the need,
  but it was not a high enough priority.
• Recently an indoor special events center was
  constructed by the local university.
• The athletic complex was repositioned and
  represented to the council as an outdoor special
  events center. Data were presented showing the
  economic impact of tournaments attracting
  300-1,000 participants each weekend, year round.
  It was supported by
• Hotel/Motel Association
• Restaurant Association
• Convention and Visitors Bureau
• Chamber of Commerce
• The council approved purchase of the site, in
  part using bed tax funds

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Effective Vocabulary in Psychological
Repositioning for Parks and Conservation

• Water clean water, preserving water quality
• Protect wildlife habitat not endangered
  species, which is more polarizing
• Natural areas avoid open space cf. empty
  space of no benefit to people urban space cf.
  an abandoned lot or bench among big buildings
• Hiking, biking and walking trails not trails
  attaching uses to it makes it more resonant
• Creating parks and other places where children
  can play safely not neighborhood parks or
  playgrounds
• Protecting quality of life and carefully planned
  areas not sprawl, unplanned growth, or
  reducing sprawl
• Our and We imply ownership and inclusion e.g.,
  WE need to protect OUR beaches, lakes, and
  natural areas
• Protect natural areas for future generations
• Talk about ourselves as conservationists not
  environmentalists

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Four Repositioning StrategiesHow to get from
Position A to Position B
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Competitive Repositioning

• Altering stakeholders beliefs about what an
  agencys competitors do.
• Opportunity cost of investments made to others.
• Deposition challenge the authenticity and
  legitimacy of another agencys claims trying to
  demote them.
• Danger of backlash, sensitivity third party.
• Likely to engage in associative repositioning

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Competitive Repositioning
Can Police Solve the Juvenile Crime Problem?
Clearance rate of juvenile crimes 20 But
one-third are not reported, so effective
clearance rate 14 One-third of those
charged are acquitted or dismissed, so percentage
convicted 9-10 Approximately one-half of
those convicted are not incarcerated, so those
incarcerated 5
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• Part of the problem of doing a cost-benefit
  evaluation analysis of the program is that you
  cannot measure what didnt happen. We save
  lives, but how can you measure a shooting that
  didnt occur because the kid was in this program?
• Reco Bembry, Seattle PRD

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Change in the Number of Serious Gang-Related
Offenses Committed in Fort Worth in One Year
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Change in the Number of Serious Gang-Related
Offenses Committed in Fort Worth in One Year
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Return on Fort Worths Investment

• Assume the 152 fewer major crimes would have been
  committed by 100 young people
• Cost of incarceration for one year at
  43,000/year 4.3M
• Assume they would have been incarcerated for 10
  years 43M
• Cost of program to Fort Worth taxpayers was
  677,699
• Return on every dollar invested by the city was
  64 (43M / 677,699)

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Results of an Experiment Showing the Impact of
Repositioning Strategies
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What Have We Gained?

• Better understanding and appreciation of the
  significance of parks and recreation by
  stakeholders and professionals
• Stronger justification for the allocation of
  public funds to parks and recreation
• Clearer guidelines for service prioritizations
• Enhanced pride in the profession

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If you do what youve always done, youll get
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Presentation available at

• http//www.rpts.tamu.edu/faculty/crompton/crompton
  -recent-presentations.shtml