Golf course development study finds surprises

No. 2 on a new list of communities ripe for golf course development is no shocker – Miami – but No. 1 may be: Sherman, Texas, a city of 32,000 about 50 miles north of Dallas.

Here are the top 12 areas ripe for golf development, according to a study by UW–Madison’s Stephen Malpezzi: 1. Sherman, Texas 2. Miami 3. Medford, Ore. 4. Fort Lauderdale, Fla. 5. Williamsport, Pa. 6. Baltimore, Md. 7. Scranton, Pa. 8. Tampa, Fla. 9. Atlantic City, N.J. 10. Hagerstown, Md. 11. Lancaster, Pa. 12. Chico, Calif. When Malpezzi multiplied the golf-hole deficit per capita times the total population, the list looks different: 1. Baltimore 2. Miami 3. Tampa, Fla. 4. Philadelphia 5. Fort Lauderdale, Fla. 6. St. Louis 7. Newark, N.J. 8. Providence, R.I. 9. Milwaukee 10. New Orleans 11. San Antonio, Texas 12. Scranton, Pa.

And Sherman’s not the only surprise uncovered UW–Madison researcher Stephen Malpezzi, who’s crunched enough numbers to cite 12 cities as showing the greatest potential for golf course development.

Malpezzi, a real estate professor in the School of Business, developed a statistical model explaining the demand for golf based on economic and demographic variables. Among the most powerful variables:

• The percent of a metropolitan population over age 65 was the biggest factor: It had an impact on demand nearly twice that of any other variable.

• Climate affects demand — and in a surprising way. People who live in or go to warmer places demand more golf, of course. But more interesting is this: For a given number of rounds, colder climates need more courses. A typical 18-hole course in Florida, let’s say, can handle about 75,000 rounds a year, while a course in Wisconsin can handle only half as many.

“Several variables that could have been expected to affect the demand for golf didn’t,” says Malpezzi. “In particular, income had no statistically significant effect, and neither did racial composition of the metropolitan area, after controlling for other demand determinants.”

Malpezzi used his model to produce the top-12 list of cities that don’t have the number of golf holes per capita that the model says should be required, given the cities’ demographic makeup, climate and size.

“These areas may be worth careful investigation for future golf development,” he says. Malpezzi cautions that his results should be used as a screening tool, not a precise indicator of future demand.

“Apart from the potential fortunes to be made by developing golf in Williamsport, Pa., and Chico, Calif.,” says Malpezzi, “demographic shifts over the next 40 years paint a very positive picture for golf.”

Right now about 2 million people are turning 62 every year. Because of aging baby boomers, that number will turn up sharply, he says, climbing to 3.5 million by the year 2020. That should add up to a lot of tee times – if golfers have enough tees to go around.