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Horse riding is an important reason
for choosing Sonoma as the county or residence or visit. Sonoma
offers ideal opportunities for having backyard horses, for trail
and enduring riding, and for participation in a variety of equestrian
events. Horse riding generates a series of backward and forward
linkages. The sum of all these linkages constitutes the equestrian
industry with significant production, income and employment effects
for the Sonoma economy. At the request of Sonoma Horse Council
the Economics Department of Sonoma State University undertook
an empirical research aimed at assessing the economic impact of
horse riding in Sonoma county.
In Sonoma county, in the year 1994, there were approximately 15,042 horses. About 10,991 horses were kept in household backyards and the other 4,049 horses were boarded in stables by horse-riding households, by stable operators, by horse trainers and by farmers.
Of the 3,364 household heads owing riding horses, 23% have masters
or Ph. D. degrees, 56% have two or more years of college education,
and 18% only have a high school education. The average household
has 2 to 3 horses housed in 5 acres backyard farms. The average
value of each horse was $4,047 and the estimated value of each
acre was $8,519.
The Representative Horse-riding Household
Tables A.1 and A.2 provide an idea
of the importance of horse-riding for a representative household
of Sonoma County. Not all households with backyard horses, however,
have the same stock of land and equipment, nor manage their operations
with the same technical level.
In the following section we investigate the importance of the
whole sector. The values for the whole sector are based on the
average (mean value) household with horses. Notice that these
averages correspond to households with different age and with
different technologies. For the particular year 1994, the mean
values are smaller than the values of the representative household
which is assumed to be newer and more efficient.
The Equestrian Industry and Market
The following figure illustrates the structure of the horse-riding
segment of the equestrian industry of Sonoma. Taken households
with riding horses as the focus, we can see the series of backward
and forward linkages that horse riding induces in the county's
economy and beyond.
The ongoing research aims at estimating the economic importance
of the equestrian industry within the county. This require to
consider three concentric levels: one, the value added and
the production value of the horse riding
activities of households; two the value added and the production
value of the equestrian sector which include the forward and backward
linkages that horse-riding generate; the value added and production
value when we include the multiplier effect on the whole Sonoma
County.
At this first stage of the research we have preliminary estimates
of the economic importance of household horse-riding and of three
major activities that serve households (backward linkages). They
are Stables and Boarding Operations, Trainers and Breakers, Veterinarians,
Shoeing, Equestrian Shows, Equestrian Associations and Horse Store
Supplies.
Household Production of Horse-riding Services-In 1994, the dollar value of the household production of horse riding services was 128 millions dollars. This is the monetary value of being able to ride horses in the county. The value of horse riding is integrated by 97 million dollars produced by households with backyard horses, and 31 million dollars produced by households who board their horses in stables.
Households with backyard horses produce their services by buying hay and feed supplements, veterinarian services, shoeing services and so for. They also "add" their own value which in this case is the value of family and hired labor, the use cost of land and equipments, and riding time. Housholds with backyard horses add a lower proportion of the production value, namely the use cost of horses and riding time, for they buy most of the services from stables and boarding operations.
The value added by the two groups of households was 89 million
dollars. The value of the acquired goods and services (intermediante
goods) was then 38 million dollars.
These production flow of those househlods was generated with a stock of land and equipment which value was 341 millones de dollares. See tables B.1 and B.2.
The value of agricultural production in Sonoma County during 1994
was approximately 340 million dollars. The combined value of agricultural
production and household horse-riding activities ammount to 468
million dollars. Horse-riding then generates almost one quarter
of the value of farming. That is, grape
production and horse-riding constitute the two major green activities
of Sonoma.
Stables and Boarding Operations-For the same year, the
production value of stables and boarding operations was 16 million
dollars, and its value added was 8.5 million dollars. This flow
of services was generated with a stock of land, horses and equipment
valued in 128 million dollars. See tables B.3/4.
Trainers and Breakers-For the same year, the production
value of trainers and breakers was 2.8 million of dollars, and
its value added was 2.3 million dollars. This flow of services
was generated with a stock of land, horses, and equipment valued
in 9 million dollars. See tables B.5/6.
Veterinarian Services-Likewise, the production value of
veterinarian hospitals and professionals was 5.3 million dollars,
and its value added was 3.6 million dollars. These services were
produced with a stock of land and equipment equal to 1.1 million
dollars.
The Horse-riding sector-If we now look at the equestrian
sector as a whole, the production value generated by this industry
was 163 million dollars, and the value added was 111 million dollars.
The Multiplier Effect of Horse-riding in Sonoma County- Each dollar of production in the horse-riding industry generates about 2.09 dollars of production in Sonoma County. This multiplier value means that for each dollar of production of the equestrian industry, 1.09 dollar more is produced by other sector of the Sonoma economy due to backward and forward linkages.
That is the direct, indirect and induced production of horse-riding
in Sonoma in 1994 was near $ 341 million dollars.
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Carlos A. Benito
This report is based on an a research conducted by Professor Carlos A. Benito from the Economics Department at Sonoma State University.
E-mail your questions or comments to Dr. Carlos Benito
Stephen Berliner
Stephen worked as Research Assistant of Dr. Carlos Benito. He
was a student in the Economics Department at Sonoma State University.
P.O. Box 7157
Santa Rosa, CA 95407
The Sonoma County Horse Council is an advocate of the horse community of Sonoma County. It works to preserve horse riding, a green activity like farming, within the life style and landscape of Northern California.
E-mail your questions or comments to:
Silvie Thompson
Michael Murphy
Michael Murphy is the Founding President
of the Sonoma County Horse Council. Michael provided background
information and implemented the Equestrian Survey.
Silvie Thompson
Silvie is the Membership Chairperson of the SCHC. Voice: (707)
528 2227. E-mail: Sillysil@aol.com.
Amy Lambroso
Amy Lambroso from the SCHC, designed the survey for counting the
horse popultation of Sonoma County.
The production value (sales for a business) of an activity is
integrated by its value added (or gross domestic product) plus
the value of intermediate goods. The value added refer to the
wage bill (in cash for hired labor or implicit for family labor)
paid to the labor applied to the activity, the use cost of capital
for the services of the land and the equipment, and the profits
(or losses) for the entrepreneurial activities. The value of the
intermediate goods refers to the expenditures in goods like feed
and clothing and in services like veterinarian activities. These
are necessary inputs for horse riding, but they are not created
or "added" by households.
The production of horse-riding households is a flow of
services through out the year. It takes place thanks to the involved
labor force (a stock of human capital), the horses, the acres
of land (a stock), and the inventory of equipment and tools (another
stock). Stocks then are the list of human, animal, natural
and instrumental resources that are used in order to produce flows:
goods and services. When accounting say for the valued added by
equipment or horses we do not compute the price of the stock (for
example the price of a tractor or a horse). Rather we compute
the value of that part of the stock that was used that we call
"capital use cost." In simpler terms the value added
by a tractor or a horse in the generation of horse-riding activities
is equal to the depreciation of the tractor or horse during this
particular year plus the interest forego in the capital invested
in tractor or horse.
In the Tables reporting the importance of horse-riding we distinguish
between the inventory of stocks and its dollar value (assets),
and the costs and incomes associated of different segments of
the equestrian industry (flows). The capital-output ratio (assets/flows)
of horse riding in Sonoma is then 3.5. It takes 3.5 dollars of
land, horses and equipments to generate one dollar of horse riding.
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The production multiplier estimates the direct, indirect and induced
effects in an economy of one dollar produced within the equestrian
sector of the Sonoma economy. The direct effect is the production
within the equestrian industry itself. The direct effect is the
change in production of other sectors to satisfy the demands of
the equestrian sector. The induced effect is the change in production
of the Sonoma economy necessary to satisfy the increase in total
consumption within the county.
Multipliers are estimated out of the input-output models of an
economy. In a previous research project we estimated the input-output
matrix of Sonoma County. This model however did not consider the
equestrian industry as a separate industry. In a next stage of
our investigation we plan to do it, and therefore be able to estimate
the multipliers of the equestrian sector. As a first approximation,
however, we have used the multiplier of the livestock sector as
a way to get an estimation of the importance of the equestrian
industry.
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Sonoma County Totals for
each Major Segment of the Equestrian Sector
Combined Value for
the Equestrian Sector
