A Hedonic Price Model for Ski Lift Tickets

Using a unique database of 85 ski resorts and 1,524 lifts and cable cars in Austria, we investigate the relationship between lift ticket prices for the 2005-2006 season and factors that influence the quality of ski resorts. We estimate a hedonic price function using OLS and robust regression techniques on length of ski runs, transport capacity (measured as vertical transport metres per hour), share of modern high-speed chairlifts and gondolas, age of mountain transport facilities, and measures of snow cover (i.e. mean altitude of peak lift stations, length of ski season and share of ski runs with artificial snow) as independent variables. In order to control for the price effects of associated ski areas covered by a multi-area ski pass, we use a set of dummy variables. We also apply spline functions in order to account for non-linearities. The empirical results show that the quality characteristics are positive and statistically significant in most of the cases, with an adjusted R ranging between 0.6 and 0.7. Furthermore, the share of modern high-speed chairlifts and gondolas, measures of snow cover are more important than the length of ski runs and overall lift capacity in determining the price of lift tickets. Given the empirical estimates, we also provide a ranking of the ski resorts according to their quality characteristics.