Growth Expectations and Decision to Renovate a Golf Course: An Application of a Censored

Abstract Golf course renovation and expected business growth were examined. Endogeneity test on the renovationdecision and a censored expected growth model rejected the hypothesis of simultaneity and decisions weremodeled separately. Key determinants for both decisions were golf facility features, but not respondents’characteristics. Key words: Golf course, simultaneous model, probit model, endogeneity test,. JEL Classifications: Q15, Q21, Q26 1. Introduction Demand for golf shows an upward trend in the United States. The number of golfers and the numberof golf courses increased by 78.7 %, and 18.3%, respectively, between 1980 and 1999. In 1999, about27 million golfers used 15,195 golf courses, including private, semi-private, and public golf courses.Among golf course numbers the most rapid increase was registered in the number of daily fees courseswhich increased by 57.7% between l980 and 1999 (The U.S. Census Bureau; National Golf Foundation,2005). In addition, the number of public golf courses available for play increased from 2,736 in 1987 to3,780 in 1992. Revenues at public golf courses increased by 110 percent from 1987 to 1992, from $1.1billion to $2.3 billion.To attract new and retain old clients through its integrity, a golf course requires a periodic renovation.The renovation has an effect on the growth performance of the facility. A planned renovation incurs costs