1. The Economics of The Audubon Society’s Sanctuary Program for Golf Courses
Dan Hyszczak ‘15
Economics Department, Colby College, Waterville, ME
Abstract
    Millions of people play golf every year, and in 2011 Golf Courses gained $22 billion dollars in revenue. This statistic combined with golf’s inherent place in the natural environment lead to questions of value and development for golf course owners. In 1991, The Audubon Society created their Cooperative Sanctuary Program for Golf Courses (ACSP) to promote environmentally sustainable practices for golf courses and to recognize the courses that are the most environmentally in both the United States and around the world.
    This paper builds off of prior research that connects golf course beauty with revenue by examining the effects of membership in the ACSP and greens fees for top golf courses in the United States. The sample of 208 golf courses was selected by using Golf Digest’s top 100 courses, top 100 public courses, and remaining top courses in each state.
With price as the dependent variable it was regressed against a dummy variable for membership in the ACSP and other variables including location, whether the course is part of a resort, whether the course has or regularly hosts professional golf tournaments, and the age of the course. The results indicated a statistically significant relationship between price and the ACSP, as well as being a resort and hosting professional golf. The study exemplifies that golf courses can be environmentally friendly, highly ranked, and charge a high price all at the same time.
Introduction
Golf courses that are more aesthetically pleasing to golfer’s are able to make more revenue than those that are less pleasing (Shmanske, 1999).
This fact motivates golf course owners to make their courses as nice as possible to make the courses more successful.
In an attempt to be as successful as possible, courses can face the tradeoff of choosing to be more aesthetically pleasing, but use non-environmentally friendly practices to do so.
This paper examines whether that dilemma, whether golf courses of similar quality can charge higher fees if they are environmentally friendly versus those that are not, and whether environmental friendliness is contradictory to successful business.
Pebble Beach Golf Links, #1 Public Course according to Golf Digest, Member of ACSP
Data Analysis (1) (2)
VARIABLES price price
Audubon 37.94*** 31.94***
(10.70) (9.927)
Top100public 73.55*** 67.38***
(9.481) (8.934)
Top100overall 92.95*** 108.0***
(17.32) (15.94)
age
(0.183) (0.175)
hostedprogolf 40.19*** 34.48***
(12.37) (11.48)
Resort 43.07*** 36.85***
(9.239) (8.648)
midwest
(18.04)
lakes
(17.36)
o.northeast -
northwest
(17.75)
southeast
(16.30)
southwest ***
(16.25)
hawaii ***
(24.99)
midatlantic **
(18.12)
Constant 71.85*** 50.25***
(9.446) (15.95)
Observations
R-squared
Standard errors in parentheses
*** p<0.01, ** p<0.05, * p<0.1
Audubon Society Program
The Audubon Society Cooperative Sanctuary Program for Golf Courses (ACSP) provides guidelines and recognition for environmentally friendly golf courses around the world.
Membership dues are $300 and courses that are accepted receive either gold, silver, bronze or classic distinction for their level of environmental compliance.
Courses are judged in the areas of Environmental Planning Wildlife and Habitat Management Chemical Use Reduction and Safety Water Conservation Water Quality Management Outreach and Education
Data
ACSP Member
Non-ACSP Member
Total
159 49
Resort 31 97
Age (mean) 33 25
Hosted Pro Golf 15 21
Price (mean)
$209.06
$148.64
Discussion
The study finds statistical significance between membership in the ACSP having a positive effect on prices for top public golf courses in the United States, as well as being a resort and hosting professional golf.
While the study finds that top courses that are environmentally friendly charge higher rates, the study does not take into account whether that means revenues are higher and the costs attributed with being environmentally friendly vs. the alternative.
Further research could add spatial components, track the various levels of ACSP membership, look at revenue as a dependent variable, and take into account the expenses of golf courses in each category and determine what characteristics make a profitable golf course.
This study does reject the hypothesis that environmentally friendly courses cannot be considered top tier and cannot charge top tier prices, host professional golf tournaments, or be a resort at the same time. These findings will hopefully encourage current course owners and future golf course developers to follow the ACSP’s criteria for environmentally friendly golf courses.