Our Equine Industry: Strength in Numbers

How economic impact studies help to shape the equine industry. By Eliza R.L. McGraw for EQUUS magazine.
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Utter the phrase "equine economic impact study" at a gathering of horsepeople and you'll more than likely elicit a few yawns. But there's nothing boring about what these studies mean: They can have a direct effect on how you keep and enjoy your horses.

On a national scale, economic impact studies help determine whether particular equestrian activities are regulated, taxed or otherwise feel the hand of government. Closer to home, state or regional economic studies may influence whether you'll be able to ride on the public trails near you and/or whether a horse park in your area will receive government funds.

Above all, economic impact studies help horse industry advocates communicate with policymakers, says analyst and consultant Timothy Capps. "To talk effectively to elected officials you need to have a story, and that story needs to start with a 'this is who we are' pitch that includes facts and figures, including economic impact information," says Capps, a former executive vice president of the Maryland Jockey Club.

Data Collection

Many of these studies are done through state departments of agriculture or economic development; others are supported by state horse councils or other independent organizations. Depending on the scope of the undertaking, the data may be gathered through mail surveys, telephone interviews or personal visits. You may even remember getting such a call or survey in the mail yourself at some point.

The specific methodology used isn't important so long as the data is gathered and presented in credible ways, says Capps. "It becomes essential to have the tools with which everyone else is equipped, which today means brochures, videos and websites, loaded with hard facts and figures," he says.

Indeed, well-executed studies are powerful tools, with the potential to influence the political process directly and indirectly. Andrea Heid, equine marketing specialist at the Virginia Department of Agriculture, observed this firsthand with her state's equine impact study: "I can't say that A led to B led to C," she says, "but you can say that our liability [limitation] law [protecting horse interests] was a result of the horse industry working more closely with legislators."

Equally valuable are the insights these studies can provide equine organizations about their own industry. Bonnie Clark, president of the Louisiana Equine Council, says field surveys often yield useful statistics showing how much money is spent on horses in particular locales or at certain competitions, information that aids in more effective targeting of marketing efforts. "It also can reveal what works and what doesn't," she says.

Setting Precedents

The Thoroughbred racing industry has been at the forefront of efforts to quantify the impact of horses on the U.S. economy. "What the racing industry learned--sometimes belatedly--was that when you went to talk to legislators or regulators, it was vital to tell them your industry's story," says Capps. "To really help elected officials 'get it,' you need to talk about jobs, land, facilities, invested dollars and ripple industries."

Beginning in the 1980s, a growing number of racing groups began hiring consultants to do economic analyses and impact studies. Some of this research was used to aid efforts to build new racetracks or fund renovations of existing facilities. Other studies were commissioned by state racing advocates to help meet future competitive challenges. "As an example," says Capps, "once gaming was permitted at tracks in West Virginia and Delaware, the racing people in surrounding states started talking about the impact that would have on them and began generating information in support of gaming expansion in their states."

In Maryland, racing industry leaders were able to convince state officials to conduct a study at the state's expense in 1985, says Capps. Done by economists from the state's department of business and economic development, the study was part of larger research on the impact of sports franchises on the state's economy. No subsequent legislation was directly tied to Maryland's 1985 economic impact study, concedes Capps, "but its conclusions set the table for the things that followed and for further studies regarding the size and scope of the racing and breeding industries."

Capps describes the study as the cornerstone of successful efforts to secure state aid for purses and breeders' incentive programs in the late '90s. "The fact that the study raised the industry's profile and gave it ammunition with which to make its case to the legislature was undoubtedly beneficial in getting subsequent legislation passed, such as Sunday racing, intertrack wagering in 1988 and the off-track betting law in 1992," he says.

Paying it Forward

But economic impact studies are not just useful for racing and gaming interests. The data they yield can also inspire programs that have a direct impact on the "average" horse owner, from initiatives to open trail access to laws limiting liability lawsuits related to equestrian activities.

A 2003 Penn State University study showed that Pennsylvania's horse industry generates more than 20,000 jobs and provides local and state governments with more than $53 million in tax revenue annually. Ann Swinker, PhD, a Penn State extension horse specialist who directed the data collection effort, says the research gave rise to SB 618, the Equine Activities Liability Act, which was passed in 2005 and took effect February 23, 2006.

The bill limits civil liability for injury or death that occurs in connection with equine activity, says Swinker, and protects owners from lawsuits where no party is at fault for injury or damages. She predicts that, in the wake of the new law, the number of insurance carriers offering liability policies to stable owners in Pennsylvania will increase, and the competition should make insurance more affordable.

At first glance, this may not seem to have much to do with an economic survey. But Swinker says that the study made lawmakers aware of the importance of the horse industry to their state. That, in turn, made them more willing to consider legislation beneficial to horsepeople. "The survey showed--proved--the size, scope and impact the industry has on the Pennsylvania economy," she says.

For Future Funding

In North Carolina, a 1996 economic impact study figured significantly, if indirectly, in efforts to pass a feed assessment supporting the state horse council and an educational grants program, says Sue Gray, the executive director of the North Carolina Horse Council. "While we cannot prove a direct connection, the information was utilized in promoting this act."

In fact, the North Carolina Horse Council is hoping to conduct a new study soon, says Gray. This time, the group's goals include protecting equestrian access to recreational trails. "In addition," she says, "economic information assists us with increasing our agribusiness partners, and improves our ability to establish sound fiscal practices, promote better research opportunities within our state and improve our facilities."

Equine impact studies also have been integral to the Tennessee State Horse Council's (TSHC) efforts to promote horse ownership and equestrian activities, says TSHC President Mike Moran, adding that the surveys are done about every two years. Because these studies underscore the economic might of horsepeople, he says, "the council is able to market the state's equine industry. This can result in higher purses, better show competition turnouts and higher stud fees."

A growing number of states now recognize the importance of learning about their horse constituencies. So if you haven't already participated in an equine impact study, don't be surprised if you are asked to do so someday soon. And if you are, consider it an opportunity to help shape the future of the horse industry. As Gray observes, "I truly believe that numbers do count. Information is power."

This article originally appeared in the January 2007 issue of EQUUS magazine. Read about Michigan and Virginia state surveys in the April 2008 issue.