The Impact of Weather Forecasts on Ski Demand

Pascal Troxler

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft - CRED

Abstract: In the wake of stagnating demand across Alpine ski areas, new pricing regimes and recent advances in the availability of precise local weather forecasts, the relation of weather forecasts to ski demand gains new relevance. I use an activity choice framework in which agents evaluate the utility of skiing relative to alternative opportunities. Thereby, agents decide early based on forecasts or spontaneously based on observed weather outcomes. By matching the demand data of three Swiss ski areas to local forecast and weather data, I show that forecast errors affect skiing demand above the variation through weather alone. Furthermore, I find suggestive evidence that reactions to pessimistic forecast errors exceed those to optimistic errors when agents are more risk averse, less enthusiastic towards skiing or the ski area is located further into the Alps.

Keywords: activity choice; skiing demand; weather; weather forecasts; forecast errors (search for similar items in EconPapers)
JEL-codes: Z21 Z31 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-env and nep-mac
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