The equine industry of Pennsylvania is the second largest animal agricultural industry in PA and directly accounts for over $10 billion of economic activity for Pennsylvania's economy. There are currently 216,000 horses, mules, donkey and burros raised on 31,000 different locations across Pennsylvania. Equine owners devote 1.14 million acres of land in Pennsylvania for equine purposes with associated assets totaling nearly $8.27 billion.
The Pennsylvania Department of Agriculture, through the State Horse and Harness Racing Commission, contracted with The Pennsylvania State University to conduct an Economic Impact Study of the Pennsylvania Equine Industry in 2003. The survey was mailed to a random selection of individuals throughout all sectors of the equine community in Fall 2002.
For more information contact the author, Dr. Ann Swinker (email@example.com)
Goals of the Study
The project assesses the composition and nature of Pennsylvania's horse industry including its direct and indirect impact on the state's economy through sales, employment, and taxes and its less tangible contributions to the quality of life of equine owners and participants in equine activities.
Knowledge of the current scope of the equine industry is important for enhancing government and citizen understanding.
Results of the Study
To understand the economic value of the equine industry, one must consider the many activities that include equid, the many breeds of horses and ponies that reside in this state and the thousands of equine enthusiasts. These enthusiasts represent every walk of life, live in urban and rural areas and fill their homes, offices, and vehicles with symbols of their interest in equid.
By recognizing all the breeding farms and stables, land, equipment, facilities and products necessary to produce and use horses, one begins to understand how the horses and people involved represent an influential industry. Finding a rival in complexity would be a challenge.
Together, the breeding, raising, training, showing, racing, riding and care of thousands of equid each year stokes a vast industry that when pulled together in all its diverse aspects makes a huge contribution to the Pennsylvania economy. The following table contains some of the highlights of Pennsylvania's equine industry.
Table 1. Basic Facts about Pennsylvania's Equine Industry
|Col 1||General Equine Population||Racehorse Industry||Total State|
|Number of Horses:||189,328||26,365||215,693|
|Number of Operations||28,200||2,800||31,000|
|Employment (number of jobs)||13,870||6,430||20,300|
|Value of Pa's Horses:||$978 million||$352 million||$1.3 billion|
|Industry Outputs (Revenue):||$780 million||$344.5 million||$1.12 billion|
| *Sales & Income:||$246 million||$189 million||$435 million|
|Related Assets/Investments:||$7.15 billion||$1.12 billion||$8.27 billion|
|Expenses:||$508 million||$238 million||$746 million|
|Total Taxes**||$46.3 million||$6.9 million||$53.2 million|
|Employment Compensation:||$121.2 million||$291.1 million||$412.3 million|
| ***Wages and Benefits Paid:||$60 million||$32.9 million||$92.9 million|
|Value Added (ripple effects)||$427.5 million||$187.6 million||$615.1 million|
* Sales and Income are part of Industry Outputs.
**Taxes include property taxes for equine-related land and payroll taxes only.
***Wages paid to employees are included in labor costs or Employment Compensation.
The Equine Industry's Estimated Contribution to the Pennsylvania Economy
The total contribution of the Equine Industry to the Pennsylvania economy was estimated using the economic impact software program IMPLAN (Impact Analysis for Planning). Originally developed by the US Forest Service, IMPLAN is an input-output model widely used to quantify how businesses use technology, labor and materials (i.e., inputs) to produce a product (i.e., output). In practice, the IMPLAN model is used in every state and hundreds of communities across the nation to catalog economic activity and predict
Results of the analysis are shown in Table 2. Here, the direct output effect of the Equine Industry in the state is $642.9 million. Based on the IMPLAN model, this translates into 14,960 jobs, with an annual total compensation for these workers of $235 million per year ($15,715 per worker). In addition, our analysis suggests Pennsylvania's Equine Industry directly generates $330.5 million of value-added activity.1
Secondary effects are the spin-off or ripple effects of the Equine Industry. For example, equine-related businesses purchase a variety of inputs and services; and the companies that produce these goods and services also need labor. Accordingly, the secondary effects also capture the impact of local spending by employees of both the equine-related businesses as well as supporting industries. Using IMPLAN, it is estimated that these effects result in more than $481 million in additional output, of which more than $284 million is value-added. This translates into 5,340 additional jobs in the state economy, and more than $177 million in employee compensation. In terms of multipliers, the employment multiplier is 1.36, suggesting that for every job in an equine-related business, an additional 0.36 jobs are supported in the state economy. The labor income multiplier is 1.75, suggesting an additional dollar in employee compensation in the Equine Industry supports 75 cents of wages and benefits in other Pennsylvania industries. Similar interpretations can be given to the output multiplier (1.75) and value-added multiplier (1.86).2
Overall, the direct and secondary contributions of the state's Equine Industry are estimated at more than $1.12 billion in output, of which nearly $615 million is value-added. This translates into 20,300 jobs that compensate state workers with $412.2 million.
The racehorse survey indicated that this portion of the industry generated $197.4 million in output and $100.6 million in value added. This activity directly supported 4,740 jobs. Accounting for multiplier effects, the racing industry supported an additional $147.1 million in output, of which $87 million was value added, and 1,690 additional jobs.
The general population results indicated that the industry directly generates $445.5 million in output, of which $229.9 million is value added. This activity provides 10,220 jobs. And the ripple effects generate still more economic activity, supporting $334.5 million in output, of which $197.6 million is value-added, and 3,650 additional jobs.
Table 2: The Equine Industry's Estimated Contribution to the Pennsylvania Economy, 2001
|Direct Effect||Secondary Effect||Total Effect||Multiplier|
|Industry Output (millions)||$642.9||$481.6||$1,124.5||$1.75|
|Value Added (millions)||$330.5||$284.6||$615.1||$1.86|
|Labor Income (millions)||$235.1||$177.2||$412.3||$1.75|
|Per Worker Compensation||$15,715||$33,157||$20,305|
|Industry Output (millions)||$197.4||$147.1||$344.5||$1.75|
|Value Added (millions)||$100.6||$87.0||$187.6||$1.86|
|Labor Income (millions)||$67.1||$54.1||$121.2||$1.81|
|Per Worker Compensation||$14,162||$31,975||$18,848|
|Industry Output (millions)||$445.5||$334.5||$780.0||$1.75|
|Value Added (millions)||$229.9||$197.6||$427.5||$1.86|
|Labor Income (millions)||$168.0||$123.1||$291.1||$1.73|
|Per Worker Compensation||$16,435||$33,705||$20,981|
Some Characteristics of Pennsylvania's Equine owners:
- From the general equine survey, 70% of the equine owners are female and 30% are males. The racehorse owners were 70% male and 30% female.
- Over 60% of Pennsylvania horse owners reported trail riding their horse on public lands.
- Within the general population, more than half of the owners have owned equine for 20 or more years, and the average length of equine ownership is just over 22 years.
- Within the general population nearly 70% of the equine owners reported a level of education beyond high school and nearly half have received at least a college degree.
- In the General population females appear to be more active participants in equine activities, especially in the over 19 age group, and overall for all age groups.
The nearly 216,000 equid living in Pennsylvania represent approximately 50 different breeds, encompassing horses developed in this country by pioneers and Native Americans as well as horses imported from around the world. Pennsylvania is home to some of the finest breeding farms in the country. Hanover Shoe Farms in Adams County is the world's largest breeder of Standardbred horses. Willow Brook Farms located in Catasauqua was instrumental in shaping the American Quarter Horse breed as we know it today, as a world-leading breeder of performance horses. Iron Spring Farm of Coatesville is one of the top producers of warmblood competitors in dressage and show jumping. Reigle Heir Farms in Grantville is a top breeder of Thoroughbred racehorses in Pennsylvania.
The American Quarter Horse at 40,110 head, represents the most popular light horse breed in the state, followed by Arabians and Half Arabians at 11,154; Morgans with 10,136; Thoroughbreds (non-racing) at 9,567; Mules/Donkeys with 8,665 head; and Appaloosas with 7985. The survey respondents, identified specific other breeds and/or grade horses totaling 7,248 head; a large portion of these are light horse breeds. Draft horse breeds totaled 11,185 head; Belgians with 6,202 head were the most popular followed by the Percherons with 3,000 head. Pony breeds accounted for 10,577 head (Welsh 3,582, Hackneys 1,635, Shetlands 1,538 and other breeds at 3,822). There were 3,450 Miniature Horses reported. Breed data, value and use by breed are presented in Tables A1 and A2 in the Appendix.
Pennsylvania's Racehorse Breeds
Pennsylvania's racehorse industry included 26,365 head of horses. There were 14,815 and 11,550 head of Standardbreds and Thoroughbreds, respectively. An additional 6,317 Standardbreds and 9,567 Thoroughbreds were reported in the general equine survey (horses not used for racing). The two breed totals, when including the non-racing population are 21,132 for Standardbred and 21,117 for Thoroughbreds. In addition, a limited number of owners of American Quarter Horses, Arabians and Appaloosas reported racing these breeds out of state.
Numbers and Economic Value of Horses by County & District
From border to border, the horse industry represents a highly diverse industry that supports a wide variety of activities in all 67 counties. The industry combines the primarily rural activities of breeding, maintaining and training equid, farming, boarding, stabling, and other commercial purposes with the more urban activities of operating racetracks, off-track wagering facilities, horse shows and recreational riding.
Top Five Counties by Total Equine Population:
- Lancaster - 20,396
- Chester - 15,504
- York - 12,089
- Washington - 8,572
- Berks - 6,241
Together, the state's South Eastern and Capital Regions account for more than forty percent of Pennsylvania's equid population. Other county data regarding equid population and value are in Table A3, in the Appendix.
There are an estimated 38,000 households that own equine in the state of Pennsylvania, with a total of 190,000 people who participate in an equine activity. An additional 20% (7,600) of households within the state participate in an equine activity, but do not own a horse. An estimated 31,000 operations housed Pennsylvania's 216,000 equine in 2002.
Twenty percent of the farms/stables from the general equine survey reported being commercial operations (for profit), while 80 % considered their equine operation for personal use. Interestingly, racehorse operations reported 82 % are commercial and 18 % were for personal use.
1 Appendix A overviews the method and defines the key terms used in this study.
2 Economic multipliers are used to translate the direct impact into the total impact; multiplying the direct impact by the multiplier gives an estimate of the additional economic activity generated by a change in output. To derive the multiplier, simply divide the total impact (direct plus secondary) by the direct impact.