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Although advanced labor skills, capital goods and technological innovations anchor our economy and living standards, we should remember that nature can be a critical economic actor. We usually think about nature’s economic power from destructive natural disasters such as tornados, floods, droughts, earthquakes and hurricanes. Less noticed are benign natural events that enhance economic well-being. The late journalist and Russian historian Raymond K. Massie attributed the relative peace and prosperity of Imperial Russia from 1906-1911 in part to “warm summers, mild winters and steady rains” that led to “plentiful food and government surpluses.”
More recently, portions of Indiana experienced a once-in-a-lifetime natural event: a total solar eclipse on April 8. At a very local level, many businesses and local governments reallocated resources because of the eclipse. Although not official, faculty and students at Ball State University canceled class to see the eclipse. Bohanon made a conscious decision in 2023 to skip an annual conference in Las Vegas scheduled for the date. After all, Muncie’s next total solar eclipse will be September 14, 2099, and Bohanon will be 144 years old and possibly not in good enough shape to truly enjoy it.
Because people worldwide were planning for the event, tourism officials fully promoted the celestial show and expected an influx of “eclipse” tourists. Tourism officials, local governments and the media told local people “to treat the eclipse like a snowstorm” and stock up on gasoline and essentials since they expected affected Indiana localities to be inundated by visitors. Tourist-related businesses added to their stocks, some taking out additional bank loans to finance new inventories.
Unfortunately, the crowds didn’t show up, and the locals followed their officials’ instructions to stay home. The late Yogi Berra’s seemingly oxymoronic quip, “Nobody goes there anymore; it’s too crowded” rang strangely accurate. A coffee shop got stuck with 75 gallons of milk. Another proprietor noted he “gave up almost 10 food-truck events this weekend—for what?” Giving up 10 food-truck events is a graphic example of the economic notion of opportunity costs!
Indiana University put on a world-class show with entertainers and academics at its football stadium. The financial records indicate that it cost IU $1.6 million but yielded under $300,000 in revenue. Four thousand attended, for a per capita deficit of more than $300 per attendee. However, the show demonstrated IU’s academic prowess and was memorable for the attendees. But let’s do better in 2099!•
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Bohanon and Horowitz are professors of economics at Ball State University. Send comments to ibjedit@ibj.com.
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