Date of Award

8-2012

Level of Access

Campus-Only Thesis

Degree Name

Master of Science (MS)

Department

Resource Economics and Policy

Advisor

James C. McConnon, Jr.

Second Committee Member

Todd M. Gabe

Third Committee Member

Gary L. Hunt

Abstract

This thesis is comprised of two unique essays which investigate important regional economic development issues in the State of Maine. Many researchers and policymakers have focused their attention on the development of Maine's manufacturing sector for economic growth, but rarely address consumer spending in the state. The following two papers employ econometric methods to address two very different consumer-spending based drivers of regional economic development—cruise ship tourism and big-box retail store growth.

The first study employs econometrics to examine regional retail sales activity in Bar Harbor, and finds an effective method where secondary data can be appropriately substituted for primary data. The second study examines the impact of big-box retail presence and growth on the vibrancy of Maine's retail sector.

The cruise tourism study examines the determinants of regional retail sales activity using multiple econometric approaches, and concludes that twelfth-order seasonal differencing is the appropriate approach to addressing the issue of seasonality that occurs in regional retail sales data. Results indicate that cruise passengers are a substantial and positive driver of consumer sales in Bar Harbor.

In addition, this research provides valuable information to coastal communities on how much spending can be anticipated per cruise passenger. Also, the innovative seasonal differences econometric method developed for this study will be very useful to economic practitioners in port communities, because it allows them to use state agency sales data as a proxy for costly repeated surveys to estimate economic impacts from tourism.

The second paper extends the big-box related literature by estimating the impacts of the presence and growth of big-box retailers on the retail sectors in Maine municipalities using a variety of econometric model specifications. Additional specifications were also included to test model stability, the impacts of big-box supermarkets, and the impacts of big-box stores outside the host towns but within the trading area. This study also examines the descriptive differences between Maine "host" and non-host towns.

Utilizing econometric methods to analyze cross-sectional demographic, sales, and establishment data during the period of 2000 to 2009, this research found that the presence and growth of big-box retailers had a positive net effect on retail establishment growth in Maine. This study also found that "host" communities and "non-host" communities in Maine are very different in terms of the average size of population, taxable retail sales, and growth in the number of retail establishments. An additional significant finding is that there appears to be a "saturation point" at which the effect of an additional big-box store becomes negative, a likely result of too much competition in a community's overall retail sector.

The above findings indicate that communities without a big-box store would gain from the introduction, but communities with a large number of incumbents would actually see a reduction in net retail establishment growth by adding additional big-box stores. Therefore, a "one size fits all" approach to big-box development regulation may not be an appropriate economic development policy.

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