Economics Happy Hour Podcast

Spring break isn't just a vacation—it’s an economic event. This week, we consider the potential impacts of spring break on destination economies, from the businesses that rely on tourism to the unintended costs cities face when hosting thousands of partygoers. We discuss how destinations like Miami Beach have pushed back against the influx of spring breakers, while other locations actively court the seasonal business. Plus, we break down common misconceptions about the true economic benefits of spring break spending.

In this episode, we discuss:

* The economic impact of spring break on popular destinations and whether the boost in spending is as big as it seems.

* How some cities have actively discouraged spring break crowds

* The role of externalities—both positive and negative—including noise, litter, and public safety concerns.

* Why businesses like airlines, hotels, and alcohol distributors benefit the most from spring break spending.

* The game theory decision-making of students and professors around the Friday before spring break—will there be class, or will everyone quietly agree to skip?

* And a whole lot more!

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Some show notes:

Before students head out for Spring Break, we took some time to catch up. Jadrian reached for a back-of-the-fridge pick, cracking open a Volcano Sauce sour from Aslin Beer Company, while Matt opted for his go-to non-alcoholic choice, a Free Wave hazy IPA from Athletic Brewing Company. Before diving into the episode, Jadrian also gave a shoutout to Barry from Sandwiches of History, a content creator who recreates unique sandwiches from the past.

Since Spring Break is on the horizon for many schools, we also thought we should chat about the economics of Spring Break. Our conversation starts with the concept of externalities—both good and bad. On one hand, spring break brings in revenue for local businesses, from airlines and hotels to bars and restaurants. On the other hand, it creates costs for cities dealing with noise, congestion, and public safety concerns. Some cities, like Miami Beach, have responded by implementing high parking fees and curfews to discourage large crowds, while places like Cancun and smaller beach towns in Florida rely on spring break tourism as a key part of their economy.

We also consider the potential economic impact of spring break tourism. Miami Beach may be trying to limit crowds, but other cities (and some businesses) embrace the seasonal surge. Miami Beach likely doesn’t need the additional visitors, but smaller cities or international destinations may think the benefits outweigh the costs. On the grand scheme of the whole U.S. economy, the result is probably negative since some money flows out of the country with tourists going to Mexico.

Another fun discussion revolves around the game theory of the Friday before spring break, or really any other holiday break on campus. Do students attend class, knowing that many professors might cancel? Do professors hold class, knowing many students will be absent? The strategic decision-making on both sides creates a classic coordination problem.

This week’s pop culture references:

Jadrian’s pop culture pick tied into the theme of skipping class rather than Spring Break in particular. The opening monologue from Ferris Bueller’s Day Off does a great job of explaining the cost-benefit analysis of skipping class. Ferris fakes an illness to get out of school, but he’s starting to realize that the costs of getting caught are rising. He needs to make the most of his day off.

Matt also didn’t have a memorable spring break clip to share, but he was proud of a great economics find from his daughter. She’s taking her first college-level econ class and pointed him to a classic scene from The Devil Wears Prada. In the clip, Miranda explains how the fashion industry influences trends down to everyday consumer choices. This scene can be used to discuss demand, complements, and cross-price elasticity, particularly concerning the price of accessories like belts compared to high-end fashion items.