Christopher Peak Final Disseration 12-13-16 Approved

Discovering the Relationship between Macroeconomic Trends and Regional Theme Park
Performance
Dissertation Manuscript
Submitted to Northcentral University
Graduate Faculty of the School of Business
in Partial Fulfillment of the
Requirements for the Degree of
DOCTOR OF BUSINESS ADMINISTRATION
by
Christopher Peak
Prescott Valley, Arizona
November 2016

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Abstract
Consumer spending is a highly-researched topic and has been evaluated by multiple
industries. With consumer spending accounting for large amounts of gross domestic
product in the United States, understanding the impact of the consumer confidence index,
stock market values, interest rates, unemployment rates, and the consumer credit index on
spending trends is crucial to predicting reactions from changing macroeconomic
conditions. The specific problem is that consumer discretionary spending is impacted by
macroeconomic trends and although there is research on the impacts of macroeconomic
trends in relationship to various industries, there is no current information on how
changes in macroeconomic trends impact regional theme park attendance and overall
revenue results. The purpose of this quantitative ex post facto study was to understand
how macroeconomic indicators including consumer confidence index, stock market
values, interest rates, unemployment rates, and the consumer credit index impacted
regional theme park attendance and revenue during times of different macroeconomic
conditions. The research was conducted using annual data spanning 2007-2012,
specifically analyzing the correlation of these metrics to macroeconomic trends for each
year. Annual financial reports from both Six Flags and Cedar Fair Entertainment were
gathered for the needed attendance and revenue performance metrics as the dependent
variables for each year evaluated. Multiple regression analysis was used to conduct
statistical analysis on regional theme park attendance and total revenue performance
during times of macroeconomic shifts on an annual basis. While all independent variables
combined did not result in null hypothesis being rejected, specific independent variables
drove significant results that drove predictability within the models. Future research

iii
could include additional internal data from the regional theme park industry, along with
additional macroeconomic variables to predict future performance for the industry and
individual companies alike.

1
Chapter 1: Introduction
Consumer spending is a highly-researched topic and has been evaluated for a variety of
industries. Researchers have analyzed the relationship between macroeconomic conditions and
spending by consumers specifically in the retail industry (Abaidoo, 2014). A recent study
indicated that macroeconomic trends have an impact on the short run spending habits when
macroeconomic trends are negative (Abaidoo, 2014). This same study also concluded that
uncertainty and volatility in macroeconomic trends also created both short and long-term
spending declines (Abaidoo, 2014). In a similar manner, consumer spending patterns and fiscal
policy decisions were directly linked to macroeconomic variables (Ishmihan & Ozkan, 2011).
Since the Great Financial Crisis of 2008, the focus among scholars on consumer spending
has continued to expand. Consumer confidence trends based on lowered income expectations
have been connected to spending restraint by consumers in the short run (Gomes, 2010). This
same study concluded that the reaction to these short-term spending shifts should not cause an
overreaction by businesses that would drastically change long-term strategies used in planning
processes (Gomes, 2010).
Stock market rates and trends are frequently viewed macroeconomic values for many
consumers daily. Increases in consumer spending follow times of increased stock wealth in an
economy, along with expanded investment in the stock market itself (Hsu, Lin, & Wu, 2011a).
This two-way relationship between stock market values and consumer spending was verified by
multiple statistical testing methods in the study (Hsu et al., 2011a; Hsu, Lin, & Wu, 2011b).
Unemployment rates were found to impact consumer spending differently in a recent
study (Florea & Moise, 2014) . Increased employment did not directly lead to an increase in
spending. On the other hand, consumers did not spend less due to high unemployment. Instead,

2
they used savings and credit accounts to maintain their current spending habits (Florea & Moise,
2014).
Consumer credit indexes, especially among younger members of the economy, have been
a driving force of consumer spending in recent years (Schooley & Worden, 2010). The
increased comfort level among younger households regarding the use of debt to purchase
everyday goods amplifies the importance of credit availability for this subset of consumers.
When interest rates are expected to rise, these younger consumers react by borrowing to spend
immediately at lower levels of interest (Schooley & Worden, 2010).
With consumer spending accounting for more than half of the gross domestic product in
the United States, understanding the impact of the consumer confidence index, stock market
values, interest rates, unemployment rates, and the consumer credit index on spending trends is
crucial to predicting reactions from changing macroeconomic conditions. Of these
macroeconomic trends, unemployment rates, and consumer confidence have proven to be the
greatest drivers of ongoing consumer spending trends (Bryant & Macri, 2005). Understanding
the impact of these macroeconomic trends on consumer spending is vital for policymakers and
business leaders alike, especially in times of shifting macroeconomic conditions where swift
decisions need to be made.
The two-leading regional theme park organizations in the United States are Cedar Fair
Entertainment Company and Six Flags Entertainment Corporation. Each corporation has
multiple parks in various locations across the country. Their financial results depend on driving
revenue through attendance and guest spending over the course of each season. Understanding
the correlation between these macroeconomic indicators and their performance drivers is crucial

3
when predicting attendance and revenue performance, especially during times of changing
macroeconomic trends.
Background
In the public annual report for 2015, Six Flags described their company as the largest
regional theme park operator in the world. This report also described the sixteen U.S. theme
parks, servicing each of the top ten designated market areas as defined by A.C. Nielsen Media
Research. The current corporate structure was established in 1998 and now has over twenty-
eight million visitors a year. In addition to the revenue generated by admissions, in park
spending including food, merchandise, and extra fee activities makes up almost forty percent of
the company’s annual total revenue. The other leader in the United States regional theme park
industry, Cedar Fair Entertainment, also described their company activities in a similar public
annual report generated for 2015. With visitation totaling over twenty-four million guests with
theme parks in nine states across America and one location in Canada, Cedar Fair Entertainment
has also established itself as a leader in the regional theme park industry. Like their closest
competitor, Cedar Fair Entertainment generates over thirty-two percent of its total revenue
through in park spending that includes food, merchandise, and extra charge activities purchases.
With attendance at the parks and the ability of their guest to spend on items once they enter the
park being essential to the revenue performance for both companies, macroeconomic trends that
impact these spending drivers are of increasing importance to both companies and the industry as
a whole (Salamat & Banik, 2013b).
Since the Great Financial Crisis of 2008, consumer spending and the macroeconomic
factors impacting this spending has been a major focus for economists and businesses alike
(Gomes, 2010) . With consumer spending that climbed to over seventy percent of the gross

4
domestic product before the crisis, many businesses and the economy were overly dependent on
this trend that was primarily fueled by increased consumer debt (Yerex, 2011. ) . The increased
debt levels used by consumers was made available using low-cost loans, increases in revolving
credit card debt, and home equity loans backed by inflated home values (Yerex, 2011. ). The
spending bubble that would eventually burst was the result of consumer’s inherent drive to
consume at the highest level possible using this increased availability of income that was fueled
by debt (Yerex, 2011). In addition to the availability of debt, consumer’s confidence in their
future income levels has been cited a major factor for consumers when considering spending on
many levels (Eastman, McKay, & Forehand, 2010). Consumers’ perceptions of the economy,
personal financial stability, and cost of living expectations have been cited as factors impacting
planned spending expectations (Eastman, McKay, & Forehand, 2010). While these perceptions
cannot be directly related to one specific input, multiple macroeconomic factors have been cited
as leading indicators used to predict consumer confidence levels (Duarte Alonso et al., 2015). A
study examining the Christmas shopping season of 2008 described the impact of negative
consumer confidence levels on retail spending. This study saw a decline of a four percent in
sales losses versus just one year earlier, which was near an all-time high (Eastman, McKay, &
Forehand, 2010). Consumer spending has been similarly linked to interest rate levels,
specifically regarding long-term purchases (Barnes & Olivei, 2013). While lower interest rates
have shown a positive impact on current spending levels, future worries of inflation have led to
lower planned spending during these times with low- interest rates (Ichiue & Nishiguchi, 2015).
While it’s impact on consumer spending has not shown the same direct impact, stock
market values have directly impacted various factors that feed into consumer spending trends
(Sum, 2014). Younger consumers have been less risk adverse during times of stock market

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declines with regards to short term purchasing decision, but the same has not held true for larger
purchase decisions with longer impacts on the consumer’s financial situation (Johnson & Naka,
2014). While this finding is positive for businesses selling consumable goods, the same cannot
be said for companies with larger priced items with a perceived long-term financial impact
(Johnson & Naka, 2014). In recent years with stock market growth, consumer spending trends
have followed with increased spending levels and expectations (DeLisle, 2013). With regards to
consumer spending levels during times of higher unemployment, varying results have been
generated by scholarly research. One such study concluded that higher unemployment levels led
to lower consumer spending in the months that would follow (Howard & Shipps, 2013). The
study also noted the trickle down impact that these decreased levels of spending would have on
landlords and banks holding loans for the laid off employees (Howard & Shipps, 2013). In
contradiction to this study, another researcher found that consumers have been shown to sustain
consistent levels of spending even during times of unemployment (Heim, 2010a). To continue
the same levels of spending, unemployed consumers used savings, took help from friends, or
increased levels of debt to maintain their current lifestyle (Heim, 2010a).
The consumer credit index, or the amount of available credit with the economy, is
another driver of consumer spending (Bearden & Haws, 2012). While some had considered
more available credit to be a positive impact on consumer spending, debt levels that soared out
of control prior to the Great Financial Crisis of 2008 led to reduced spending by households
burdened with payments they could not afford (McCarthy & Steindel, 2007b). The proper
amount of consumer credit options is needed for an economy to progress, but moderate levels of
household debt have been seen to produce the largest amounts of long term spending (Dynan,
2012).

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Statement of the Problem
Downturns in macroeconomic trends have historically been followed by decreases in
consumer spending (Gaber, Gruevski, & Gaber, 2013). This was very evident during the great
financial recession of 2008 when unfavorable shifts in macroeconomic trends led to decreased
consumer spending, and eventually led to the largest recession in the United States since the
Great Depression (Catte, Cova, Pagano, & Visco, 2011). Success in the travel and tourism
industry is driven by consumer spending of excess cash that is more readily available during
times of macroeconomic stability (Cantor & Rosentraub, 2012).
Researchers have demonstrated the effects of macroeconomic downturns on consumer
spending in retail industries, including grocery stores, when metrics like consumer confidence,
interest rates, unemployment rates, stock market values, and consumer credit index decline (Ma,
Ailawadi, Gauri, & Grewal, 2011). However, there are industries, such as regional theme parks,
that are separate from other retail, travel and tourism destinations because of their unique
variables (Salamat & Banik, 2013a). The regional theme park industry has distinct
characteristics, goals, and revenue drivers that differ from the standard travel and tourism
category (Salamat & Banik, 2013a).
The specific problem is that consumer discretionary spending is impacted by
macroeconomic trends, and although there is research on the impacts of macroeconomic trends
in relationship to various industries, there is no current information on how changes in
macroeconomic trends impact regional theme park attendance and overall revenue results. This
lack of information impedes the industry’s ability to develop strategies to combat changes in
consumer behaviors at regional theme parks when macroeconomics trends shift (Cornelis, 2011).
If this research is not done, regional theme parks will not know how to plan for and react

7
properly to changing macroeconomic conditions, and would most likely underperform due to this
inability.
Purpose of the Study
The purpose of this quantitative ex post facto study was to understand how
macroeconomic indicators including consumer confidence index, stock market values, interest
rates, unemployment rates, and the consumer credit index impacted regional theme park
attendance and revenue during times of different macroeconomic conditions. The independent
variable for this study was publicly reported consumer confidence indexes, interest rates,
unemployment rates, stock market trends, and the consumer credit indexes during the timeframes
evaluated. The dependent variables were the attendance and revenue performance for all parks
at both Six Flags and Cedar Fair Entertainment. The research was conducted using annual data
spanning 2007-2012, specifically analyzing the correlation of these metrics to macroeconomic
trends for each year evaluated. Annual financial reports from both Six Flags and Cedar Fair
Entertainment was used to gather the needed attendance and revenue performance metrics as the
dependent variables for each year evaluated. Multiple regression analysis was used to conduct
statistical analysis on regional theme park attendance and total revenue performance during times
of macroeconomic shifts on an annual basis. This data was gathered from 2007-2012 and
evaluated on a quarterly or year by year basis.
Research Questions
The following research questions provide the needed bridge between the statement of the
problem and the research purpose in addition to expanding on the details of how the research will
be conducted. Consumer spending has been shown to adjust to macroeconomic trends among
the general travel and tourism industry (Cantor & Rosentraub, 2012). Research conducted for

8
the total travel and tourism industry cannot be generalized to the regional theme park industry
because no other industry is as reliant on consumer’s ability to change their consumption, or
attendance, patterns on such a consistent basis (Cantor & Rosentraub, 2012). This ability for
customers to change plans throughout the operating season impacts both attendance and revenue
numbers for regional theme parks (Bakir & Baxter, 2011). Due to the major impact that
consumer spending has on regional theme park attendance and revenue performance, the ability
for regional theme parks to forecast consumers’ spending at their parks based on macroeconomic
trends will provide stakeholders with the information needed to plan and proactively manage
times of changing macroeconomic conditions. The research questions and hypothesis for this
study are below.
Q1. To what extent, if any, is there a relationship between merging all five predictive
variables (consumer confidence index, stock market values, interest rates, unemployment rates,
and the consumer credit index) together and attendance at Cedar Fair theme parks?
and the consumer credit index) together and revenue performance at Cedar Fair theme parks?
and the consumer credit index) together and attendance at Six Flags theme parks?
and the consumer credit index) together and revenue performance at Six Flags theme parks?

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Q5. To what extent, if any, is there a covariance within the predictive variables consumer
confidence index, stock market values, interest rates, unemployment rates, and the consumer
credit index and attendance?
Hypotheses
H10. There is no relationship between merging all five predictive variables (consumer
credit index) together and attendance at Cedar Fair theme parks at a statistically significant level.
H1a. There is a relationship between merging all five predictive variables (consumer
credit index) together and attendance at Cedar Fair theme parks at a statistically significant level.
credit index) together and attendance at Six Flags theme parks at a statistically significant level.
credit index) together and attendance at Six Flags theme parks at a statistically significant level.
credit index) together and revenue performance at Cedar Fair theme parks at a statistically
significant level.

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credit index) together and revenue performance at Cedar Fair theme parks at a statistically
significant level.
credit index) together and revenue performance at Six Flags theme parks at a statistically
significant level.
credit index) together and revenue performance at Six Flags theme parks at a statistically
significant level.
H50. There is no significant covariance within at least one of the predictive variables
consumer confidence index, stock market values, interest rates, unemployment rates, and the
consumer credit index.
H5a. There is a significant covariance within at least one of the predictive variables
consumer confidence index, stock market values, interest rates, unemployment rates, and the
consumer credit index.
Nature of the Study
The purpose of this non-experimental quantitative method of inquiry, utilizing ex post
facto quantitative research, is to understand how the consumer confidence index, stock market
values, interest rates, unemployment rates, and the consumer credit index impact regional theme
park attendance and revenue performance. The data will be gathered using publicly distributed
records consisting of annual totals for both sets of dependent variables. Having both sets of
confirmed data will allow the researcher to use correlation analysis to determine the relationship

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between both sets of variables. Multiple research articles produced by Carter (Carter, 2014),
along with the previously mentioned study from Jarde (Jarde et al., 2012) in 2012 has validated
the use of multiple regression analysis to evaluate multiple variables against financial
performance metrics to understand correlations or a lack thereof between the variables (Carter,
2015). The use of this method within other financial studies also gives validity to the analysis
method used in this study (Carter, 2014). To understand how the consumer confidence index,
stock market values, interest rates, unemployment rates, and the consumer credit index impact
regional theme park attendance and revenue performance, the following study will use the
interval values of regional theme park attendance and revenue performance as the dependent
variables. Cedar Fair Entertainment and Six Flags annual reports will serve as reliable and
accurate sources for the data related to both dependent variables. Likewise, the independent
variables that consist of the consumer confidence index, stock market values, interest rates,
unemployment rates, and the consumer credit index are also interval values ranging in values
depending upon the specific independent variable. Each of the independent variables is
published nationally on at least an annual basis generating reliable and accurate data for the
study.
Significance of the Study
With a combined total of approximately 85,000 employees across most regions in the
United States, the financial success of both Six Flags and Cedar Fair Entertainment is not only
crucial to their shareholders but is a major contributing factor to the economy in the areas around
their theme parks. With consumer spending continuing to be impacted by macroeconomic
trends, the lack of detailed research regarding information on how changes in macroeconomic
trends impact regional theme park attendance and overall revenue results is concerning. Without

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the proper knowledge and research, the industry’s ability to develop strategies in order to combat
changes in consumer behaviors at regional theme parks when macroeconomics trends shift will
continue to be limited (Cornelis, 2011). These limitations will not only impact the shareholders
of each company in a negative way but will also impact the employees and surrounding
economies that are involved with each park. This study will result in three major contributions to
the regional theme park industry.
First, the study will provide regional theme park operators with the needed information to
predict consumer spending and visitation patterns based on macroeconomic shifts in the short
term. This will allow the operators the ability to staff and prepare appropriately for the guests
and their needs before the activities occur. The ability to predict consumer behavior in this
manner will generate efficiencies from a labor perspective, but will also generate additional
revenue for each company due to their preparation to increased attendance and spending when
macroeconomic trends indicate so. Second, the research will be useful in giving each company’s
guests the proper promotions during a given timeframe based on the guests’ likely level of
spending. Having the right product produced, advertised, and delivered to the consumer at the
right time will increase sales and revenues for the industry. Third, the research will provide
long-term spending expectations for each location within a company’s portfolio, giving them the
ability to plan the appropriate capital investments or savings at the right times. These changes
will not only increase the revenue totals for the industry, but will also provide a better customer
experience for the guests due to proper planning, product placement, and experience
development.

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Definition of Key Terms
An essential need for the application of this study is to fully understand the key terms
associated with the study. The source for all the definitions provided with be identified by the
citations. Whenever possible the terms were communicated in an understandable manner for
persons not familiar with the specific financial terminology used throughout the study.
Consumer Confidence Index. For this study, consumer confidence is a consumer’s
expected output of income based on their expectation of future wealth (Gomes, 2010). The main
quantitative measure of consumer confidence in the United States, the Consumer Confidence
Index (CCI), is based on a monthly survey of 5,000 households that is conducted by the
Conference Board, an independent research association (American Britannica, 2015). The CCI is
closely watched by businesses, the Federal Reserve, and investors (American Britannica, 2015).
New York Stock Exchange. For this study, the New York Stock Exchange (NYSE) is
one of the world’s largest marketplaces for securities and other exchange-traded investments
(American Britannica, 2015). Most common households do not have large amounts invested in
the NYSE, but considering households in the top one percent of net worth hold one-third of all
assets, most consumers view the performance of the NYSE as an indicator for future overall
economic performance (Poterba, 2000).
Interest Rates. For this study, interest rates are defined as the percentage usually on an
annual basis that is paid by the borrower to the lender for a loan of money (American Britannica,
2015). The United States government controls the rate at which money is lent from the
government to lending organizations, thus impacting the amount of interest charged to
consumers (Fullwiler, 2007).

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Unemployment Rate. For this study, the unemployment rate is defined as the
percentage of the population with the condition of one who can work, actively seeking work, but
unable to find any work (American Britannica, 2015). The study will evaluate the impact of
unemployment rates on other areas of the economy and discuss the known impact of financial
legislation on the unemployment rate itself (Gatti, 2009).
Consumer Credit Index. For this study, consumer credit is defined as the amount of
short- and intermediate-term loans used to finance the purchase of commodities or services for
personal consumption or to refinance debts incurred for such purposes (American Britannica,
2015). Some theories have contributed excessive consumer credit availability as a driving factor
of the financial crisis of 2009. This same study also indicated that younger consumers use credit
to maintain their standard of living, thus keeping the economy moving during slower times of
economic growth (Schooley & Worden, 2010).
Revenue. Revenue, in economics, is the income that a firm receives from the sale of a
good or service to its customers (American Britannica, 2015). Revenue totals to be discussed in
the study will be the result of admission, games, merchandise, and food purchases at the two
regional theme parks being evaluated (Salamat & Banik, 2013b).
Summary
Consumer spending is a highly researched topic and has been evaluated for a variety of
industries. Researchers have analyzed the relationship between macroeconomic conditions and
spending by consumers specifically in the retail industry (Abaidoo, 2014). Since the Great
Financial Crisis of 2008, the focus among scholars on consumer spending has continued to

15
expand. Consumer confidence trends based on lowered income expectations have been
connected to spending restraint by consumers in the short run (Gomes, 2010). This same study
concluded that the reaction to these short-term spending shifts should not cause an overreaction
by businesses that would drastically change long-term strategies used in planning processes
(Gomes, 2010).
To better understand these occurrences, the theory of planned behavior is used to evaluate
the influence of consumer’s knowledge, beliefs, and feelings related to a product (Bhuyan,
2011). The theory of planned behavior commonly assumes that an individual’s attitude towards
a behavior, based on previous knowledge, feelings, or beliefs related to this behavior will
determine their actual behavior (Bhuyan, 2011). The specific problem is that consumer
discretionary spending is impacted by macroeconomic trends, and although there is research on
the impacts of macroeconomic trends in relationship to various industries, there is no current
information on how changes in macroeconomic trends impact regional theme park attendance
and overall revenue results. This lack of information impedes the industry’s ability to develop
strategies to combat changes in consumer behaviors at regional theme parks when
macroeconomics trends shift (Cornelis, 2011).
The purpose of this quantitative ex post facto study is to understand how macroeconomic
indicators including consumer confidence index, stock market values, interest rates,
unemployment rates, and the consumer credit index impact regional theme park attendance and
revenue during times of different macroeconomic conditions. The research will be conducted
using annual data spanning 2007-2012, specifically analyzing the correlation of these metrics to
macroeconomic trends for each year evaluated. Annual financial reports from both Six Flags and

16
Cedar Fair Entertainment will be used to gather the needed attendance and revenue performance
metrics as the dependent variables for each year evaluated.

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Chapter 2: Literature Review
The purpose of the quantitative ex post facto study is to understand how macroeconomic
indicators including consumer confidence index, stock market values, interest rates,
unemployment rates, and the consumer credit index impact regional theme park attendance and
revenue during times of varying macroeconomic conditions. The independent variable for this
study will be publicly reported consumer confidence indexes, interest rates, unemployment rates,
stock market trends, and the consumer credit indexes during the timeframes evaluated. The
dependent variables will be the attendance and revenue performance for all parks at both Six
Flags and Cedar Fair Entertainment. As such, the following literature review focuses on the
theory of planned behavior’s relationship to consumer spending and its impact on regional theme
parks’ overall success. A large focus of this literature review covers relevant scholarly research
on the topics of macroeconomic trends, such as the consumer confidence index, stock market
values, interest rates, unemployment rates, and the consumer credit index. These topics and their
impact on consumer spending will also be discussed in detail. Finally, the review of literature
will cover the relationship between these macroeconomic indicators and consumer spending at
regional theme parks and the resulting impact on attendance and revenue performance.
Documentation
Literature searches for this research were conducted using various databases. Each
provided peer revived scholarly research that evaluated consumer spending trends using
regression models and other statistical analysis methods. Specific studies related to the theory of
planned behavior were also used for this research. Lastly, searches were conducted among
official government websites providing macroeconomic data during the timeframe evaluated.

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Theory of Planned Behavior
When thinking about consumer behavior recent research evaluates a common assumption
revolving around the belief that individuals are rational and behave in a reasonable manner when
making purchase decisions (Bhuyan, 2011) . Research has concluded that in some instances,
rational behavior is overruled by one’s desires related to a product or activity. To better
understand these occurrences, the theory of planned behavior is used to evaluate the influence of
consumers’ knowledge, beliefs, and feelings related to a product (Bhuyan, 2011). The theory of
planned behavior commonly assumes that an individual’s attitude toward a behavior, based on
previous knowledge, feelings, or beliefs related to this behavior will determine their actual
behavior (Bhuyan, 2011). A recent study titled “Do consumers’ attitudes and preferences
determine their FAFH behavior? An application of the theory of planned behavior” concluded
that a consumer’s attitude toward an activity or product drove the level of engagement or
amounts consumed (Bhuyan, 2011).
Another recent study examined wine festivals using the theory of planned behavior
focusing on the intentions of consumers to purchase an item or to engage in an activity (Duarte
Alonso, Sakellarios, & Cseh, 2015). This study discussed consumers’ increased effort to perform
an activity or to make a purchase based upon their intention to do so beforehand (Duarte Alonso
et al., 2015).
The research cited that when consumers could choose in their own timeframe to perform
or to not perform a behavior, they were more likely to do so (Duarte Alonso et al., 2015). This
research concluded on four main factors that drove consumers to behave in a certain way. These
factors included “commitment and perceived importance, consumption and entertainment,

19
attendance and discover, and joining others” (Duarte Alonso et al., 2015). Three-hundred and
eight questionnaires were used to measure attitudes towards the behavior, perceived behavioral
control, and subjective norms on participants attending the Derbyshire Food and Drink Fair
(Duarte Alonso et al., 2015). Of the three hundred and eight useable responses, significant
differences related to age, gender, and distance traveled to the fair were noted (Duarte Alonso et
al., 2015). The study noted potential outcomes of the study as being beneficial to the fair
industry looking to understand the motivations driving their guest within each group studied
(Duarte Alonso et al., 2015). The study also utilized the theory of planned behavior to examine
the factors that led to guest attending these festivals, thus expanding the development of the
theory of planned behavior (Duarte Alonso et al., 2015). Using this theory for their study, the
research indicated consumers’ attitudes towards this behavior, their perceived level of social
acceptance towards this behavior, their perceived level of effort that is needed to engage in this
behavior, and the past experiences of the consumers as predictors for engagement in this activity
(Duarte Alonso et al., 2015). The major demographic takeaways from the study includes the
gender mix with females accounting for sixty-one percent of the population and the age group of
above forty-six making up over sixty-seven percent of participants(Duarte Alonso et al., 2015).
While the conclusion of the study did backup the four stated factors as the driving influence on
the planned behaviors of the study, they also found a unique trend among the younger
participants in the study. This group had a higher expectation of future visits to these types of
events looking for new experiences with non-traditional offerings rendering information that
could be useful to organizing such events in the future (Duarte Alonso et al., 2015).
Recent research was conducted examining the growth of specialty coffee consumption.
The study analyzed consumers’ behavioral intentions towards specialty coffee using the theory

20
of planned behavior (Merwe & Maree, 2016). The study evaluated attitudes, subjective norms,
and perceived behavioral control in relationship to consumers’ preferences and intentions
towards the consumption of specialty coffee (Merwe & Maree, 2016). Coffee enthusiasts who
were over the age of eighteen residing in the major city centers of South Africa where chosen for
this study (Merwe & Maree, 2016). Surveys were distributed to known connoisseurs and to
coffee cafés that distributed the surveys across their customer base.
Results of the surveys indicated that cultural norms were an important factor in the
decision processes related to specialty coffee consumption (Merwe & Maree, 2016).
Considering that most consumption occurred in the presence of other individuals, these results
were not surprising. Positives attitudes toward this activity also encouraged future intentions to
purchases specialty coffees (Merwe & Maree, 2016). While attitude was the least important
factor, perceived quality, taste, and health benefits were the main factors associated with
consumers’ attitudes towards the product. Contrary to previous research, age did not play a role
in predicting consumption, with younger consumers drinking more specialty coffees when
compared to the past (Merwe & Maree, 2016) . The study concluded that retailers must adapt to
the changing consumer by not only providing the quality and variety that is expected, but by also
capturing the younger consumers as they move into adulthood. Promoting the social benefits of
status related to the consumption of specialty coffees has been a successful tactic in achieving
these goals (Merwe & Maree, 2016).
Another study utilizing the theory of planned behavior to evaluate consumer attitudes,
norms, and perceived behavioral controls related to the consumption of sugar-sweetened
beverages, water, and artificially sweetened beverages. This study used the homogenous
sampling strategy focusing on groups of individuals in the southwest region of Virginia (Zoellner

21
et al., 2012). This sampling group was chosen because of the region’s high diabetic rate among
it’s residents. This region also has higher than average rates of obesity and has been recognized
by the federal government as a medically underserved area (Zoellner et al., 2012). The research
used frequencies, means, standard deviations, Chi-squared, and one-way ANOVA’s to analyze
the data with a hybrid deductive and inductive qualitative analysis approach. The results
indicated four major themes that drove consumption across all categories evaluated (Zoellner et
al., 2012). Taste, availability, habit, and cost emerged as the leading factors related to
consumption across the different categories. While noted as influential to the behavior, health
impacts, water quality, and normative beliefs among participants’ peers and doctors had smaller
impacts on the decision-making process (Zoellner et al., 2012). A previously released study
related to the theory of planned behavior among Dutch adults listed satisfaction, health, social
influences, habit, availability, and awareness as factors leading to fruits and vegetables (Zoellner
et al., 2012). This study was noted based on its stark contrast to the study conducted in Virginia.
Consumer Spending
Economists refer to consumer spending as the goods or services bought by a household to
fulfill their needs and wants, through a variety of suggested and implemented fiscal policies
(Nnadi, 2011). Since the great recession of 2008, economists and researchers have been
focusing on ways to reduce the decline of consumer spending. Recent research determined that
interest rates, annual inflation, annual earnings increases, and mortgage rates affect consumer
spending in the most direct manner (Nnadi, 2011). This study developed a consumer spending
model to assess the impact of fiscal policies related to bank rates, inflation, earnings, and
mortgage rates on consumer spending (Nnadi, 2011). Four variables including the bank or

22
interest rate, annual inflation rate, annual earnings increase, and mortgage rate were used to build
the model comparing these factors to consumer spending and the behavioral patterns during the
great financial crisis of 2008 (Nnadi, 2011). The retail price index was used as a standard for
measuring the amount spent by households on consumables in the study (Nnadi, 2011). The
study included findings concluding that government entities should generate additional economic
activity through the stabilization of inflationary trends (Nnadi, 2011). This stabilization of
inflationary trends will generate increased consumer spending through lower interest rates,
increased earnings, and lower mortgage rates (Nnadi, 2011).
Macroeconomic indicators including consumer confidence, stock market values,
unemployment rates, and the consumer credit index have also been shown to impact consumer
spending (Abaidoo, 2015).With consumer spending accounting for seventy percent of the overall
gross domestic product prior to the recession of 2008 (Yerex, 2011b), this topic continues to
grow as a research and discussion topic among scholars and legislators alike. Prior to the great
financial crisis of 2008, consumption levels were at a record high. Research concluded that
normal trends of spending would not occur soon without indicating a specific timeframe for
normal trends to resume (Yerex, 2011b). To evaluate these consumption trends, the research
used a conceptual consumer spending model (Yerex, 2011b). On one side of the equation, the
model included three main components consisting of personal wealth, disposable income, and
savings (Yerex, 2011b). On the other side of the equation, investments, borrowings, withdrawals,
and expenditures were considered (Yerex, 2011b). These categories capture all spending
activities both incoming and outgoing (Yerex, 2011b). A combination of the labor index and the
Department of Commerce Retails and Food Services Sales Survey were used to evaluate
spending trends (Yerex, 2011b). Four phases were identified leading up to the financial crisis of

23
2008 and the years preceding it (Yerex, 2011b). The first phase between late 2006 and early
2007 saw continued increases in retail sales and labor indexes alike (Yerex, 2011b). During
2007, in phase two, a shift in labor indexes happened while sales trends continued to rise, putting
each index on opposite sides of the trend (Yerex, 2011b). As the labor index, would have
predicted, the sales trends dropped in 2008, in phase three, catching up to the labor index levels
by the end of the corresponding year (Yerex, 2011b). During the fourth phase, in 2009, the labor
index slowly rose with the retail sales trends following which has been the case since (Yerex,
2011b). The dramatic changes in the economy over the past fifty years were used as an example
to underscore the likelihood of normalization along with the examples of items that led to
increased spending prior to the Great Financial Crisis. Those include overvalued homes and
easily accessible credit (Yerex, 2011b). Other research evaluated consumers’ intent to change
spending patterns during times of economic change using the theory of planned behavior
(Chambers, Benibo, & Spencer, 2011). One such study used a survey of four hundred and fifty-
eight faculty and students from South Texas University, ensuring that faculty from all colleges at
the university and all levels of students were included to prevent bias. When using the theory of
planned behavior to analyze the relationship between one’s attitude and the influence of the
norms around everyone, the impact of each on participants’ activities varied. During times of
financial crisis, consumers’ attitudes had a significant impact on their decision to move money,
but had no impact on their decision to change jobs (Chambers et al., 2011). While the norms
around these consumers did have a small influence on their thoughts about changing jobs, the
norms had the greatest impact regarding where consumers placed their money (Chambers et al.,
2011). The research concluded that when making decisions about where to allocate funds,
consumers are influenced more by those around them, or the norm, as compared to other large

24
decisions where personal attitude or experience is the driving factor (Chambers et al., 2011). To
better predict future spending trends, current research has evaluated the impact of pricing,
income, and inflation on consumer spending trends (Nnadi, 2011). This research created a
consumer spending model based on the retail price index and the Hodrick and Prescott filter as
the smoothing coefficient (Nnadi, 2011). The study also used the assumption that the retail price
index is dependent on the bank rate, inflation, earning increases, and mortgage rates (Nnadi,
2011). The study noted that as spending is increased, consumer confidence will also rise, driving
bank rates up with inflationary pressures (Nnadi, 2011). While moderate pricing increases and
subtle income increases played a small role in keeping consumer spending levels flat after the
recession subsided, inflation trends also played a large role reducing the amount that each dollar
can buy (Nnadi, 2011). This has caused governments to implement policies encouraging the
stabilization of inflationary pressures to encourage future consumer spending growth (Nnadi,
2011). The research concluded that stabilization of inflationary trends played a larger role than
earnings increases or mortgage rate reduction, supporting the push for government regulation of
inflationary trends (Nnadi, 2011). It was shown that interest rates and inflation are highly
correlated to the retail price index and consumer spending overall (Nnadi, 2011).
Consumer spending as a driving factor relating to unemployment has been greatly
overlooked. A recent study examined the impact on employment when consumer spending
declines (Barello, 2014). During the great financial crisis, over 3.2 million jobs were lost due to
reduced consumer spending (Barello, 2014).This accounted for over a third of the total job loss
during that timeframe (Barello, 2014). Over half of the remaining jobs were related to gross
private investment with exports, and state or local governments accounting for the remaining five
and four percent respectively (Barello, 2014). In contradiction, during the recovery, jobs related

25
to consumer spending recovered at a faster rate compared to their counterparts(Barello, 2014).
This employment growth fueled by consumer spending is expected to continue at a moderate rate
including increased expenditures on labor-intensive services like healthcare (Barello, 2014).
With consumer spending accounting for seventy one percent of the United States’ gross
domestic product and just over fifteen percent of the entire global economy, understanding the
impact of consumer spending is crucial for any business (Barello, 2014). To understand the
correlation, the study created an equation to determine how much output supports consumer
demand, and then calculated production that is translated into employment using labor trends,
productivity trends, and current employment ratios (Barello, 2014).
Over the next several years, the research concluded that consumer spending would
continue to be a driver of economic growth. While the overall economy is predicted to grow at a
slower rate versus historical norms, consumer spending is expected to trend at a similar rate
when compared to the overall economy (Barello, 2014). Consumers are predicted to be
responsible for over seventy percent of the United States gross domestic product by 2022.
Ninety-five percent of the jobs related to this spend are expected to be in the service industry,
with over half of the growth expected to come from the health care and social assistance sectors.
It is crucial for all industries to understand these trends to understand the impact of lower
consumer spending throughout the entire economy (Barello, 2014).
Stress has also been linked to consumer savings and consumer spending. When
consumers are threatened by stressful situations or environments, they use their spending to take
back control (Durante & Laran, 2016). Consumers either place more money into savings to
prepare for economic downturns, or utilize their spending to purchase perceived essentials to

26
gain control during stressful situations. This study’s purpose was to examine the increased
willingness of consumers to spend or save during times of stress (Durante & Laran, 2016). To
gather the data, multiple surveys were used to generate participant responses. These responses
were analyzed using analysis of variance between stress and the control that was perceived
through spending (Durante & Laran, 2016). The research concluded that stress led more
consumers to save than to spend. The spending that did take place during these stressful times
was found to be more strategic, revolving around products that were perceived to be essential to
the current lifestyle of the consumer (Durante & Laran, 2016). The research also contributed to
the expanding amount of literature around the interplay of environmental and physiological
factors that are influencing consumer decision making. For companies of all types to be
successful in the future, understanding this dynamic will be crucial when evaluating consumer
spending decisions (Durante & Laran, 2016).
Regional Theme Parks
Multiple types of amusement parks exist across the county including attraction parks,
theme parks, safari parks, aquatic parks, and recreation parks (Salamat & Banik, 2013b). These
parks have been designed as permanent destinations for the public to use as entertainment hubs
(Salamat & Banik, 2013b).These destinations are also used for educational purposes and are
visited by locals and tourists alike (Salamat & Banik, 2013b). Regional theme parks, also called
amusement parks and recreational parks, are designed to attract consumers that want to spend a
specific amount of time in an environment that creates surroundings of enjoyment and new
experiences (Salamat & Banik, 2013b). These parks typically consist of rides or attractions that
revolve around a central theme (Salamat & Banik, 2013b). Theme parks are typically an outdoor
attraction, a specific visitor destination, require an admission fee, and are designed around the

27
needs of the consumers with the focus being on their entertainment value versus their educational
value (Salamat & Banik, 2013b). To be successful, amusement parks must contain a wide range
of options and attractions, have unique qualities on an ongoing basis, generate new innovative
features on an annual basis, continue the theme from year to year as new elements are
introduced, integrate environments that match the location of the park, properly manage lines
and capacities, operate sound infrastructures, and entertain guests regardless of the weather
(Salamat & Banik, 2013b). Guests also want an environment that allows them to escape the
normal distractions of life on a temporary basis. This experience should be interactive while
creating an emotional attachment to the brand associated with an expectation of high quality
(Salamat & Banik, 2013b). Most importantly, theme parks must design attractions that exceed
the highest safety and security standards while employing a well-trained and highly motivated
staff (Salamat & Banik, 2013b). To be successful, amusement parks must have the proper market
strategy. The different strategies in the industry include the low cost, differentiation, or focus
strategy (Salamat & Banik, 2013b). While the four P’s including product, place, price, and
promotion are a consistent piece of this strategy, physical facility and procedure are included
when discussing amusement parks (Salamat & Banik, 2013b). When designing marketing
aspects for the consumers, the proper design of each park should relay the marketing message
being delivered outside of the park (Salamat & Banik, 2013b). With the seasonality of the
business being a constant, amusement park operators must have efficient procedures in place to
maximize the use of their properties during peak business days, while having a similar
proficiency during off peak times to complete necessary tasks related to maintenance and service
across the parks (Salamat & Banik, 2013b).

28
Consumer spending is a key component to the success of many businesses and industries
across the globe (Heim, 2010a), and is a key ingredient for success in the regional theme park
industry (Van Oest et al., 2014). Information related to factors that may increase or decrease
consumer spending is quite valuable to the regional theme park industry due to the impact of
consumer spending on the industry’s attendance and revenue performance totals (Salamat &
Banik, 2013a). However, stakeholders do not currently have enough information to generate
strategies that will combat consumer spending trends that are impacted by macroeconomic
variables. Other research evaluated how the theory of planned behavior explained consumers’
allocation of money during such economic crises (Chambers et al., 2011)
With many considering attendance at an amusement park to be a luxury item or event,
studies around luxury purchases remain relevant to studies regarding the regional theme park
industry. Using the theory of planned behavior, a study identified self-directed pleasure, superior
performance, acquisition, and self-actualization as the motivating factors for purchasing a luxury
item (Jain, Khan, & Mishra, 2015). Culture, values, attitudes, and cultural behaviors were
identified as influences on consumer’s behavior patterns when considering luxury items (Jain et
al., 2015). The study also identified signals of power and position, impressing others, conformity
to a group, and non-conformity as socially motivating factors for consumers when making a
luxury purchase decision (Jain et al., 2015). Intrinsic or personal factors were identified as the
driving forces behind one’s desire to purchase luxury items along with consumer’s desire to
express themselves (Jain et al., 2015). The research concluded that one’s feelings and personal
attitude around a brand had a large effect on a luxury purchase decision (Jain et al., 2015). Four
main motivating factors were identified including, pleasure gained from the consumption
experience, the functional or quality value of the experience, materialistic satisfaction related to

29
ownership, and the perception of one’s self when purchasing such luxury items (Jain et al.,
2015). From a norm perspective, or the feeling of society about a brand, consumers valued this
perspective as well when making the same purchase decisions (Jain et al., 2015). Motivating
factors related to these extrinsic factors include the need for status, the need to impress others, a
desire to belong to a group, or a uniqueness value that does not conform to the norm (Jain et al.,
2015). While both sets of factors are key to the behavior process, consumers’ income or ability
to purchase the item must be considered (Jain et al., 2015). The consumer’s attitude towards a
product or behavior was noted as the first conclusion in the study. This attitude towards a
product may exceed the desire for the actual product if the feeling is significant (Jain et al.,
2015). Said another way, a positive or negative attitude toward a product or company may be
the deciding factor related to consumer purchases of luxury items regardless of the product being
sold (Jain et al., 2015). The second major conclusion revolved around consumers’ perception of
people’s attitudes towards them if they made the luxury purchase (Jain et al., 2015). Even adults
are influenced greatly by the social pressure to engage activities or purchases (Jain et al., 2015).
Lastly, the study concluded that a consumer’s ease in performing the behavior or purchase was
also a driving factor in the decision process. If income levels are a deterrent to purchasing
goods, marketing or financing activities need to be in place to overcome this obstacle (Jain et al.,
2015).
As with other industries, consumer spending is a key driver to the success of regional
theme parks on an annual basis (Salamat & Banik, 2013b). A recent study in Europe noted the
lack of a model for return on investment related to new attractions added to regional theme parks
(Van Oest et al., 2014). The study generated a model using 25 years of data from a German
theme park to create a predictive model that would estimate future attendance in relationship to

30
new attraction investments. The model indicated five factors that drive amusement park
attendance including attractions, competition, seasonality, price, and macroeconomic factors
(Van Oest et al., 2014). With the impact of a new attraction being the focus of the study, this is
the main factor evaluated in the model with the other factors used as controls to negate their
impact on the study (Van Oest et al., 2014). Saturation is also considered when multiple
attractions are added in a similar timeframe (Van Oest et al., 2014). In conjunction with their
model, twenty-four years of data related to attraction investments and attendance performance
was evaluated for the German theme park used in the study. The results indicated an average
return on investment of one-hundred and thirteen percent for each attraction built (Van Oest et
al., 2014). There was a significant decline in the return of similar attractions in subsequent years
compared to earlier versions of similar attractions parks (Van Oest et al., 2014). In conclusion,
when all things were equal, thrill attractions drove higher returns when compared to themed rides
(Van Oest et al., 2014). When saturation of thrill rides became evident, themed ride investments
produced better results, adding variety for guests and meeting the needs of different demographic
groups (Van Oest et al., 2014). In contrast to the trend in America to build the largest and fastest
new attraction, the study found that multiple attractions over the course of several years had a
larger impact of nullifying the impact of adverse weather, versus one large new attraction (Van
Oest et al., 2014). While this research did contribute to predicting attendance in relationship to
new investments at regional theme parks, the study did not generate a model to predict
attendance trends during times of macroeconomic shifting.
Regional theme parks generate 80% of their attendance and revenue totals in the 2nd
and
3rd
quarters of the year between Memorial Day and Labor Day. The average number of operating
days for the industry is around 130 to 140 days on an annual basis. The key demographic for the

31
industry is people between the ages of 12-24 with families driving a large portion of attendance
and revenue. With this being the demographic, parents of young families are the decision
makers, deciding ultimately to visit or not to visit the park, and determining the spending at each
park. Limited direct competition within regional areas exists due to a $300 to $400-million-
dollar cost to build a new regional theme park with a two-year construction time-frame. While
the population and economic growth may exist in a specific area where an existing park is
located, the cost of development for a new park almost always restricts the existence of new
competition for existing parks.
With admission tickets and season passes being one of the largest drivers of revenue for
regional theme parks, their revenue implications have recently been addressed and evaluated
(Byun & Jang, 2015). The comparison of bonus offers versus discount programs was evaluated
to determine the perception and likelihood a guest would renew season passes to amusement
parks in their regions with each of these offers (Byun & Jang, 2015). The authors used national
surveys and a promotion between-subject design experiment to reach the conclusion that guests
that had renewed passes in the past were not affected by either of the promotional methods
(Byun & Jang, 2015). Two national surveys were conducted by an online research firm to one
set of respondents that had never subscribed or purchased a membership to an amusement
attraction (Byun & Jang, 2015). A second survey was sent to participants that had held a season
pass to a theme park or a botanic garden in the past (Byun & Jang, 2015). ANOVA statistical
analysis was used to evaluate the significance of the results (Byun & Jang, 2015). Guests that
had not renewed passes in the past were more likely to renew their passes if the promotion
included a bonus offer with a perceived value versus a discount promotion with a known set
value (Byun & Jang, 2015). A promotion that included a new attraction and a promotion had the

32
highest level of significance, with promotional messages only providing the lowest amount of
response for new customers (Byun & Jang, 2015). In a similar manner, when a new attraction
was combined with a renewal offer, previous guests responded at a much higher rate (Byun &
Jang, 2015). While previous guests did show some response to a discount or promotional offer
without a new attraction, new guests showed virtually no response to these offers, indicating new
attractions were crucial to gaining new customers (Byun & Jang, 2015). While this study did
address the impact of promotional types on season pass renewals, thus evaluating an attendance
driver, the research did not add to the knowledge base around revenue impacts driven by
attendance shifts during macroeconomic irregularities.
With attendance being so closely tied to revenue performance, regional theme parks are
consistently trying to enhance customer experiences to drive initial and repeat attendance. One
recent study based in Taiwan evaluated five experiential marketing strategies created to drive
guests’ willingness attend, revisit, and recommend specific theme parks (Jung, 2016). The
experiment divided the experience marketing into five categories including sense, emotion,
thinking, action and relevance.
Sense marketing was described as activities focused on vision, hearing, smelling, tasting,
and touching to create purchase motivation (Jung, 2016). Experiences created to evoke positive
feelings toward to the product or brand were labeled as emotional marketing activities.
Activities created to allow consumers to see a product or company in a new light or from a
different angle were described as thinking marketing (Jung, 2016). Getting consumers to
visualize how their lives will be changed because of consumption was referred to as action
marketing. Lastly, the linking between a consumer’s psychology, society, and culture was
described as relevance marketing (Jung, 2016).

33
The study utilized surveys completed across multiple theme parks in Taiwan. The results
of these surveys were analyzed using regression analysis, and one-way ANOVA to evaluated
statistical relevance (Jung, 2016). All five of the marketing strategies were found to influence
revisit willingness with consumption willingness being driven by action, relevance, and sense
marketing. Relevance, emotional, action, and sense marketing drove the highest
recommendation willingness among participants (Jung, 2016). Age, marital status, educational
background, income level, and family income levels also influenced which marketing strategy
was most influential. Understanding the driving factors among these survey participants will
enhance theme parks marketing strategies to grow consumer engagement (Jung, 2016).
Consumer Confidence
Consumer confidence is typically defined as the likelihood that consumer spending is to
be relatively strong or relatively weak among consumers in the general population of an
economy (Parker, Souleles, Johnson, & McClelland, 2013). Since the great recession of 2008,
the issue of consumer confidence has been a highly-investigated topic (Yerex, 2011a), with the
correlation of consumer confidence being increasingly linked to consumer spending. An
independent research firm called The Conference Board releases the consumer confidence index
monthly. The value of the index typically ranges around 60-140 with a value of 100 being an
average middle point of consumer confidence.
A recent study conducted in 2010 concluded that during times of macroeconomic
uncertainty, decreased consumer confidence led to retailers having negative viewpoints
regarding spending in the short run (Eastman, McKay, & Forehand, 2010). The study contained a
hypothesis for both sets of respondents including retailers’ and consumers’ perception of the

34
economy, retailers’ and consumers’ financial soundness, retailers’ cost of operations, consumers’
cost of living, and retailers’ and consumers’ perceptions of the upcoming holiday spending
season (Eastman et al., 2010). Surveys were used for both sets of participants to gain an
understanding of the attitudes for each group regarding the economy just prior to the great
financial crisis (Eastman et al., 2010). The questions used in the survey asked both sets of
respondents to give their opinion related to the overall soundness of the economy, soundness of
their current situation, the level of overall cost and expected holiday spending in comparison to
the previous year for all questions (Eastman et al., 2010). Using an independent T-test for both
sets of respondents, the following conclusions were derived. Both consumers and retailers had a
similar perception of the economy overall. Retailers, however, felt more financially sound when
compared to consumers leading into this time frame (Eastman et al., 2010). In a similar manner,
consumers felt that their costs had risen at a higher rate versus last year in comparison to
retailers' thoughts on the same subject. Given the previously mentioned results, it is no surprise
that consumers had a lower expectation of spending during the holiday season compared to
retailers’ expectation (Eastman et al., 2010). This was verified by the actual spending by
consumers during the following holiday spending season. Both consumers and retailers held
negative views about spending in the short term. However, the consumers’ amount of decreased
spending exceeded the retailers’ expectations (Eastman et al., 2010). Research has shown that
increases and decreases in consumer confidence have been followed by similar changes in
consumption and followed by similar changes in investments (Heim, 2010b). Research using the
theory of planned behavior also indicated the same trends, concluding that attitudes that are
influenced in the short-term drive decision making (Chambers et al., 2011). This data would
indicate that long term decisions like investments are not as impacted by shifts in consumer

35
confidence, where day to day consumer spending, on the other hand, is very tied to consumer
confidence levels (Heim, 2010b). The decision of consumers to attend amusement parks falls in
the category of day to day spending, thus tying the attendance of consumers at amusement parks
to consumer confidence.
Recently, researchers in Canada evaluated the ability of the Conference board of
Canada’s Index of Consumer Attitudes to predict consumer spending based on consumer
confidence levels at the national and regional level (Kwan & Cotsomitis, 2006). The study used
correlation analysis to examine the link between Canada’s Index of Consumer Attitudes and
household spending at both the national and regional levels (Kwan & Cotsomitis, 2006). This
index asks consumers about their thoughts around their financial position over the next year, the
general economic situation of their country over the next year, the level of unemployment rates
in their country over the next year, and their expectations around savings over the next year to
generate the results (Kwan & Cotsomitis, 2006). Correlation analysis was conducted to generate
the results of the study. The study found a high correlation between the consumer confidence
index and household spending at the national level but failed to generate the same levels of
correlation when evaluating the index to regional levels of household spending (Kwan &
Cotsomitis, 2006). While this study did determine the correlation at specific regional levels,
further research is needed to understand if a similar correlation exists between consumer
confidence indexes and regional theme park attendance and revenue performance at the national
level.
The importance of focusing on consumer spending was highlighted by a recent study
noting that seventy percent of the United States gross domestic product is generated by consumer

36
spending (Yerex, 2011a). The correlation connecting consumer confidence levels and consumer
spending was further confirmed by a recent study that connected increased consumer spending
with just the expectation of financial increase (Gomes, 2010). Multiple models were constructed
to examine consumer spending habits during times of consumer confidence change. So, even
before consumers had the money in hand, they have been shown to spend more as their
confidence levels increased through an expectation of future financial security (Gomes, 2010).
When consumers had a positive outlook on their ability to grow above normal expectations, their
spending levels increased. (Gomes, 2010).
The impact of consumer confidence on consumer spending was recently evaluated across
specific sectors. These included durable goods, semi-durable goods, and nondurable goods.
The purpose of the study was to enhance the predictability of consumer trends by enhancing the
research on this topic down to the specific sector level (Gausden & Hasan, 2016). Correlation
analysis was done on published consumer confidence levels and consumer spending trends
within the specific sectors to generate the study results. The research concluded that analyzing
these specific sectors would have given greater predictive ability during the timeframe analyzed.
With the exclusion of auto purchases, the durable goods category would have seen the greatest
impact (Gausden & Hasan, 2016).
While many studies have evaluated the impact of macroeconomic indicators on the
consumer confidence index, a recent study looks to do the inverse. The factor-augmented vector
auto regression framework was used to evaluate the data throughout the study (Kilic & Cankaya,
2016). Monthly data from January of 1994 through June of 2013 was used including the
consumer confidence index and financial data from the federal reserve. Factors gathered from
the federal reserve included the unemployment rate, federal funds rate, nonfarm business labor

37
productivity rate, adjusted gross private domestic investment rate, and the consumer price index
(Kilic & Cankaya, 2016).
The findings of the study confirm that manufacturing related variables, housing market
variables, and durable and nondurable goods are sensitive to consumer confidence changes. The
inventory to sales ratio in manufacturing shows a very strong correlation in both the short and
long term (Kilic & Cankaya, 2016). Gas and utilities show a constant correlation to the index
with services showing a larger correlation compared to durable and nondurables goods when
evaluating personal consumption to consumer confidence levels. Housing market trends did not
change versus previous research, with increases in consumer confidence intervals driving
housing market growth (Kilic & Cankaya, 2016). While a direct correlation between consumer
confidence index and macroeconomic variables cannot be confirmed, psychological factors have
been seen in the short run (Kilic & Cankaya, 2016).
Stock Market Values
While at a first glance, the stock market values may seem like a point of interest for only
the wealthy, current research has proven the connection between the stock market and total
consumer spending (Sum, 2014). To generate their findings, the study used regression analysis
estimating the relationship of business confidence, consumer confidence, and the stock market’s
performance (Sum, 2014). The study found that with every unit of change in the business
confidence level the stock market also increased one and a half percent. When consumer
confidence levels change by one unit, the stock market has an even greater response, increasing
by over four percent (Sum, 2014). Consumers see the stock market as a leading indicator of
future economic activity, thus giving the consumer the expectation of financial growth or decline
(Hsu, Lin, & Wu, 2011a). The same research indicated a decline in consumer investments during

38
downshifts in the stock market as an initial reaction, further enhancing the connection between
consumer spending and stock market values (Hsu, Lin, & Wu, 2011a). This research used the
Granger-causality framework to investigate the causal relationship between consumer confidence
and the stock market (Hsu, Lin, & Wu, 2011a). Monthly data related to consumer confidence
and stock market levels from twenty-one countries over a period of eight years was gathered for
the study (Hsu, Lin, & Wu, 2011a). The study concluded that a strong cross-sectional
correlation exists between the two variables. Not only will consumer confidence levels increase
as stock market values rise, but more individuals will be willing to invest in the stock market
when their confidence levels are increased (Hsu, Lin, & Wu, 2011a).
Age of consumers has also been linked to the amount of short term and long term risk
consumers are willing to accept in both their spending and investing (Johnson & Naka, 2014).
The research also indicated a stronger response from consumers related to negative trends versus
positive trends in the stock market (Johnson & Naka, 2014). Greater changes resulted from
negative moving in both trends, indicating a larger downside risk versus an opportunity for
upside when evaluating these two variables (Johnson & Naka, 2014). While the research did
indicate a stronger risk aversion from older consumers, the ability to predict consumer behavior
from this connection was only useful for short term decisions and did not produce a correlation
when looking at long term spending decisions (Johnson & Naka, 2014). Because of this finding,
the study advised for the risk calculation to be included regarding the demographic mix of the
investor base when generating future models (Johnson & Naka, 2014). As information becomes
more easily accessed by more people, the impact of global opinions continues to be a larger
impact on consumers making personal decisions with money allocation (Chambers et al., 2011).

39
Another specific research indicated a similar result in consumer spending during times of
stock market decline. The example was given from early 2009 when the value of stocks plunged
by as much as fifty percent versus their highs a few years earlier as compared to real estate
values that had only fallen by twenty-five percent at this point (Cooper & Dynan, 2013). With
many younger consumers using credit for daily purchases, the availability of credit has a higher
impact on their spending in comparison to actual wealth growth. While stocks may not be rising,
when home values do the opposite additional credit availability is generated, spurring these
individuals to spend (Cooper & Dynan, 2013). Stock market values are used more as an
indicator of future wealth, spurring future spending, especially for those individuals that own
stock (Cooper & Dynan, 2013). One other impact of rising stock market values has been
increased contributions to one’s retirement plan. When this is done, daily spending is reduced to
contribute the funds to the retirement account, decreasing the amount of spending on consumer
goods during a time of actual wealth growth among stockholders (Cooper & Dynan, 2013). As
the population ages, this trend should reduce as older consumers begin to spend their profits
instead of placing them in savings, due to the limited timeframe remaining for them to spend
these funds (Cooper & Dynan, 2013). One other factor that has modified these trends has been
the level of debt held by consumers. During times of downward trends, large amounts of debt
are used to maintain consumption levels. As the situations improve, extra funds or profits are
used to decrease consumer’s levels of debt back down to desired levels, thus decreasing the
amount of spend into the economy (Cooper & Dynan, 2013). Consistent with other related
studies, this research connected the expectation of future wealth to consumer spending, versus
the facts and current wealth values truly connected to each consumer (Cooper & Dynan, 2013).

40
Less than four years after the global recession, research was again showing positive
outlooks on consumer spending in the years to come given the recent increase in stock market
values (DeLisle, 2013). Low interest rates and rising home values were also cited as drivers of
these results (DeLisle, 2013). With over eighteen weeks of positive stock market trends, the
essay noted record index levels and increased corporate reserves with strong earnings growth
estimates as factors behind increased consumer attitudes related to spending (DeLisle, 2013).
The fact that companies have been getting more out of their existing assets was noted as one
source of positive corporate results in recent quarters. As this trend plateaus, more companies
will be relying more heavily on revenue growth generated through increased consumer spending
into the economy (DeLisle, 2013). With interest rates predicted to continue at low levels, more
investors will be drawn to the stock market, thus creating increased trends for the foreseeable
future. The continued appearance of stock market growth should continue to spur consumer
spending for some time to come (DeLisle, 2013). An essay published in 2010 had the same
focus but examined in detail the change in consumers’ valuation of the dollar among different
generations, and the impact of this valuation from consumers on consumer spending (Bruner,
2010). The essay gave a brief history of money, in addition to a brief history of the value of a
dollar to validate the opinions expressed in the essay. The essay described how previous
generations used the ability of the dollar to convert into a metal, and the value associated with
this conversion as their basis of the dollar’s worth. In contrast, the current generations view the
stock market and other macroeconomic factors as their guidance on the dollars worth (Bruner,
2010). Questions around how we should value the dollar, and what would happen to these values
if another crisis occurred were addressed in this essay (Bruner, 2010). The lack of understanding
when evaluating the true worth of the dollar was noted as a large factor in the last financial crisis

41
(Bruner, 2010). In previous generations, the value of the dollar was backed by silver or a
tangible item. Now, as the essay suggests, the value of the dollar is tied to the ability of the
population to produce goods and service, along with the ability of the United States government
to meet its financial obligations (Bruner, 2010). In conclusion, the essay notes our challenge
continues to revolve around our ability to see the value of the dollar for what it truly is,
considering all our challenges and shortcomings as a country and economy (Bruner, 2010).
While it is universally believed that economic health and consumer confidence levels go
hand in hand, one study evaluates an anomaly to this belief. Stock market performance is widely
believed to be an indicator of overall economic stability, but when looking at consumer
confidence intervals, this is not always the case (Ferrer, Salaber, & Zalewska, 2016). A recent
study evaluated the correlation between consumer confidence levels and stock market
fluctuations. While multiple research articles have been published around the short-term impact
of consumer confidence on stock market performance, the long-term implications have not been
clearly identified (Ferrer et al., 2016).
Post hoc data analysis was done for the time periods covering the last two recessions to
evaluate the strength of the stock market and consumer confidence relationship. While both
recessions were similar in size, they had different outcomes with varying lengths of impact on
the overall economy (Ferrer et al., 2016). To generate the results, the study used the consumer
confidence index in comparison to the stock market indexes published during the timeframes
studied. The research concluded that indirect impacts of stock market performance on the
consumer confidence levels were not significant to draw a conclusion and further research is
needed. Indirect impacts from stock market performance on the perceptions about future
personal finances were shown as strong (Ferrer et al., 2016). The final conclusions indicated that

42
consumers’ understanding of the basic stock market and its implications to the overall economy
may be more advanced than widely believed. This information may cause future forecasting
issues based on the variables having a larger impact than originally believed (Ferrer et al., 2016).
While unemployment and substantial drops in housing prices drove a large portion of the
great financial recession, huge stock market declines also had a substantial impact. The mean
net worth of households fell from five-hundred and ninety-five thousand in 2007 to four-hundred
and eighty-one thousand in 2009 (Kyoung & Hanna, 2016). While the stock market losses did
not impact a large portion of working Americans, their views and savings patterns where altered
for the foreseeable future. Investors have since placed retirement savings in less risky
investment vehicles, at a more consistent rate, decreasing their disposable income monthly
(Kyoung & Hanna, 2016).
The purpose of the previously mentioned study was to establish the impact of the stock
market decreases during the great financial crisis in relationship to the total wealth of working
households. Data from the survey of consumer finances published by the Federal Reserve on a
triennial basis was used in comparison to stock market trends for this study (Kyoung & Hanna,
2016). An equation was used to calculate the impact using equity holdings, total wealth, and the
percentage of changes in the Wilshire 5000 index. Human wealth, or the present value of an
individual’s future salaries, wages, self-employment earnings, anticipated pensions, and social
security benefits were also included in the calculation (Kyoung & Hanna, 2016). With only four
percent of household wealth residing in equity assets, the potential loss from the decrease in the
stock market was barely over one percent. Only five percent of households between the ages of
fifty-four and seventy had the potential to lose eight percent or more of their wealth (Kyoung &
Hanna, 2016). Younger households were at an even lower level of risk based on their percentage

43
of wealth invested in equities. While the top one percent and oldest members of the investment
community are at greatest risk when stock market indexes decline, over twelve percent of the
losses sustained during the latest crash could have been avoided by not selling all equity
investments near the height of the recession (Kyoung & Hanna, 2016).
Interest Rates
While interest rates and consumer spending have not been directly linked as they relate to
everyday purchases (Redmond, 2001), research has shown a direct relationship between interest
rates and large ticket purchases, including automobiles and homes (Barnes & Olivei, 2013). The
research used a survey asking questions regarding multiple economic environment issues
including unemployment, inflation, buying conditions, income, wealth, prices, and interest rates
(Barnes & Olivei, 2013). Consistent with other studies, the research found that income and
wealth are associated with consumer sentiment. In a unique angle, the study also related pricing
and interest rates as an explanatory factor to consumer sentiment (Barnes & Olivei, 2013). When
comparing the two metrics against actual consumer sentiment and spending, pricing and interest
rate trends followed actuals at a higher rate when compared to income and wealth levels over the
same period (Barnes & Olivei, 2013). The trickle-down effect of these large ticket items has also
been directly linked to overall consumer spending (McCarthy & Steindel, 2007a). So, as pricing
and interest rates for large ticket items are decreasing, consumer spending is rising for these
items, then trickling down into everyday items, thus generating overall stimulus to the economy
(McCarthy & Steindel, 2007a).
One study in 2011 examined the relationship between interest rates and spending from
the cyclical perspective and the planned perspective (Kandil & Mirzaie, 2011). The first theory

44
involved in the study separated expected and unexpected events in relationship to consumption
by consumers (Kandil & Mirzaie, 2011). Correlation coefficients were used to understand the
variations between the real growth rates of consumption versus the growth rate of disposable
income (Kandil & Mirzaie, 2011). To better understand the data, the private consumption totals
were segmented into total consumption, durable goods, non-durable goods, and services (Kandil
& Mirzaie, 2011). While decreases in interest rates did encourage future planned spending, it
was not a driver for increased spending on a day to day basis (Kandil & Mirzaie, 2011). When
interest rates lifted, or were predicted to increase, both cyclical and planned spending were
shown to decrease (Kandil & Mirzaie, 2011).
A study conducted in Japan, a country that has experienced many years of low-interest
rates, confirmed this relationship during the current timeframe but experienced lower levels of
future expected spending in similar interest rate conditions (Ichiue & Nishiguchi, 2015). Data
gathered in the opinion survey from the Bank of Japan was used for the study (Ichiue &
Nishiguchi, 2015). Current daily spending was shown to increase during this extended period
with low-interest rates but expected future spending was on the decline due to inflationary
worries (Ichiue & Nishiguchi, 2015) . As expected, pricing changes exist due to future interest
rate predictions, projected and actual spending will follow. When pricing is expected to increase
even slightly, sales are expected to decrease (Ichiue & Nishiguchi, 2015). The inverse is also true
with slight downturns in pricing driving expected spending increases. During the timeframe
studied, pricing increases driven by higher interest rates were always followed by decreased
spending in the following months (Ichiue & Nishiguchi, 2015). Opinions of consumers during
the same timeframe also preceded increases in compensation of employees, and thus predicted
the increases of real consumption (Ichiue & Nishiguchi, 2015). Rising interest rates also created

45
lower future expectations causing an increase in the likelihood of decreased spending on larger
ticket items, driving the overall spending total down across the board if interest rates do not
increase (Ichiue & Nishiguchi, 2015). The results in Japan differed from the results in the United
States with inflation increases actual boosting the economy as opposed to America where
inflation has been known to decrease spending (Ichiue & Nishiguchi, 2015).
Another recent study evaluated the combined impact of oil pricing on interest rates and
the resulting availability of credit along with the impact these factors had on consumer spending.
The hypothesis of the study revolved around consumers spending more on credit during times of
high oil pricing due to the increased availability of credit (Arora, 2016). The theory went on to
explain that when gasoline purchases were made on credit, disposable income was spent on other
items in the economy, thus generating overall economic growth.
The study also contended that the trends for consumer credit and gasoline spending in the
United States moved at a similar rate. Availability of credit and the cost associated was
examined in the remainder of the study, along with an analysis of the importance of oil pricing in
comparison to the overall economy (Arora, 2016). Throughout the literature review, the research
found that when consumers had access to credit, there were smaller adjustments in regards to
spending when oil pricing shifted. As credit balances grew over time, this trend may have just
shifted the timing of a recession rather than avoiding one (Arora, 2016).
Outstanding credit and credit transactions have grown over the years in the United States,
with the cost associated with this credit declining at a substantial rate. To analyze the correlation
between changes in credit and gasoline expenditures, the research used simple scatterplots,
different types of correlation coefficients, and estimating tail coefficients to develop the research

46
(Arora, 2016). The raw data used was collected from the Federal Reserve’s month G19 releases
and the Bank for International Settlements reports around total credit. The correlation and
scatterplot analysis both showed a growing association between growth in various measures of
credit and gasoline spending during the time evaluated (Arora, 2016).
While the research concluded that the relationship between credit adjustments and
gasoline spending existed, it did not conclude that they were directly responsible for each other.
As total spending in the United States has shifted from mainly cash to an economy where many
things are bought on credit, the direct impact of economic shifts may not be fully felt
immediately (Arora, 2016). While increases in gasoline prices may have impacted customer
spending, the true impact may be delayed depending on the availability of credit in the economy
(Arora, 2016).
When developing nations begin to grow, a crucial determinant of their long term success
will revolve around their interest rate and monetary policies. When long-term development
begins to emerge in these developing nations, higher interest rates begin to occur (Velickovic &
Velickovic, 2016). As this increases the cost of capital in the developing county, investment
demands may decrease, hindering future growth if not done correctly (Velickovic & Velickovic,
2016).
While developed countries have used higher interest rates in a successful manner to
properly manage demand, this has not been done in developing nations (Velickovic &
Velickovic, 2016). These developed countries can change the discount rate if a sector of the
economy is not responding to the interest rate policy in place (Velickovic & Velickovic, 2016).
This ability to react and recover is not available for developing countries encountering the same
issues. Current research analyzes if a high interest rate environment in a developing country

47
would provide an environment for the country to naturally develop in a manner that would
generate long-term growth (Velickovic & Velickovic, 2016).
Short term interest rate hikes have influenced the growth of real cost of capital in the
past, therefore having had an impact on investment demand. This increase or decrease related to
investment demand also had an ongoing impact on interest rates (Velickovic & Velickovic,
2016). The question evaluated by the study revolved around analyzing the relationship of these
two factors.
The IS-LM model was used in this study and evaluated the simultaneous equilibrium in
the goods market and the money market. The model focused heavily on interest rate,
investments, and exchange rates to generate its calculations (Velickovic & Velickovic, 2016).
The model did have some weaknesses when evaluating developing countries, including its
disregard of persistent inflation and its impact on investment goods demand (Velickovic &
Velickovic, 2016). The model concluded that investments were the function of the gap between
the desired size of capital and the income growth and expected inflation (Velickovic &
Velickovic, 2016).
In conclusion, the model was more successful when used at higher development levels
with market-regulated economies with low inflation rates. In these situations, increases in real
interest rate levels had a greater influence on the decline of investments (Velickovic &
Velickovic, 2016). The model also found that in the long run, interest rate decreases had the
inverse effect on investment growth and took the country into an inflationary period (Velickovic
& Velickovic, 2016).

48
Developing countries in the end have failed to create a full functioning financial
marketing system ready to make the developmental processes able to succeed. This lack of
proper planning also generated difficulties related to the regulation of the developing market
(Velickovic & Velickovic, 2016). The issues that accompanied many of these developing
countries included chronic underdevelopment and a consistent demand for increased capital
(Velickovic & Velickovic, 2016).
High interest rate levels have been successful in developed nations due to the expectation
of inflation, and the nation’s desire to close the gap between current and desired levels of capital
in the system. These nations can also adjust the discount rate as needed, which is crucial for
success (Velickovic & Velickovic, 2016). The research concluded that these developed countries
must control private and public consumption during recessionary times to be successful in the
long-run (Velickovic & Velickovic, 2016).
In contradiction to other studies, a recent study noted that during the most recent
economic recovery in the last three years, lower interest rates have driven only modest increases
in spending on durable goods (Van Zandweghe & Braxton, 2013). The items included in the
durable segment consisted of residential investments, vehicles, recreational goods, and
household goods (Van Zandweghe & Braxton, 2013). This study compared the current recovery
versus the previous three economic recoveries for the United States economy. Real GDP,
consumption expenditures, residential investment, vehicles purchases, and household
expenditures were all evaluated (Ichiue & Nishiguchi, 2015). While spending, recovery lagged
other recoveries, interest rate increases placed ahead of similar recoveries, providing validity to
the theory connecting increased interest rates and decreased future spending amounts (Ichiue &
Nishiguchi, 2015). Another recent study voiced the notion of a decreased impact generated by

49
interest rate changes in the United States economy (Willis & Cao2, 2015). The recent study
conducted for the Economic Review periodical indicated that employment and industrial
decisions have been less impacted by interest rates in recent years (Willis & Cao2, 2015). The
study noted changes from monetary policy makers, innovations in financial markets including
changes in governmental regulations, and changes across and within industries as drivers of this
shift (Willis & Cao2, 2015). Long term interest rate changes are now having a great impact on
industries versus short-term shifts that created reactions in the past years (Willis & Cao2, 2015).
The model created used four variables including the federal funds rate, total nonfarm payroll
employment numbers, the Chicago Fed National Activity Index, and the price index. In
conclusion, the research indicated that industries have realized this shift, and are adjusting
accordingly (Willis & Cao2, 2015). This shift by industries has generated a decline in
dependence upon the interest rate, as in not the result of monetary policy changes (Willis &
Cao2, 2015).
In previous economic recovery time periods, lower interest rates generated a larger
increase in spending compared to the recent timeframe of recovery (Van Zandweghe & Braxton,
2013). As both the employment levels and industrial investments have stabilized in relationship
to interest rates, so have consumer spending habits during this recent period of recovery (Willis
& Cao2, 2015). As consumers see a more stable stream of income, and expectation of income,
spending has leveled out in relationship to interest rate changes, reacting at lower levels when
shifts occur (Willis & Cao2, 2015).

50
Employment Rates
Research has shown that as employment rates decline, consumer spending will
soon follow (Howard & Shipps, 2013). A lack of jobs in an economy has been shown to lead to
foreclosures, homelessness, and bankruptcies (Howard & Shipps, 2013). To understand the
impacts of employment rates on the economy, the study evaluated the aspects related to these
numbers for their findings. They identified four types of unemployment including frictional, or
unemployment from individuals changing jobs, seasonal unemployment due outdoor and other
seasonal factors, structural employment driven by a lack of skills needed to perform the jobs that
are available, and cyclical unemployment caused by changes in the business cycle during
recessions or expansionary periods (Howard & Shipps, 2013). Government workers, educators,
and employees of financial firms have lower levels of unemployment during recessionary
timeframes (Howard & Shipps, 2013). Education levels also played a major role with a
bachelor’s degree increasing the chance of employment by almost double when compared to
employees with only a high school diploma (Howard & Shipps, 2013). Since the great financial
recession of 2009, unemployment rates have declined, but not at the same levels as in past
recovery periods. Many factors were identified as factors keeping unemployment numbers
above desired levels, including large companies still struggling since the recession, job cuts by
large firms to reduce costs, low rates of job creation, firms holding cash versus expanding,
companies expanding without expanding their workforce, fundamental changes in labor markets,
and extension of unemployment benefits (Howard & Shipps, 2013). While these factors may not
have caused high unemployment levels, they have impacted the sustained high levels that still
exist(Howard & Shipps, 2013). Businesses shifting abroad, declining business formation, an
accelerated pace of automation, the unwillingness of companies to hire unemployed individuals,

Christopher Peak Final Disseration 12-13-16 Approved

Christopher Peak Final Disseration 12-13-16 Approved

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