Climate Change

Many businesses are becoming concerned about the impacts of climate change on their future profitability. In this case, a theme park operator wanted to understand how temperatures impacted attendance at one of their parks. Their concern is that increasing or decreasing average daily temperatures during the hottest and coldest months might reduce the number of monthly visitors.

To begin with, we took 11 months of attendance data (this park closes one month per year) and controlled for confounding variables, particularly holiday periods. We also collected local average monthly temperatures for corresponding periods. We then plotted this data and confirmed that in this location colder weather is associated with fewer visitors however the warmest weather does not create a disincentive. The relationship between temperature and visitors is positive and linear.

We created a function that allows temperature to be used to estimate the number of visitors and tested the predictions of this function against real attendance data focusing on months of the year as the key independent variable. As always, anything involving humans is subject to a certain amount of randomness, however, the function demonstrated solid predictive capability.

Given this geographic location tends to have temperatures that range from cold through to mild, the results were expected. It is also likely based on the data and the analysis that a slight warming of average temperatures in this area could actually increase the number of visitors to this park. However, any additional cooling in the colder months could be problematic for this theme park.

We believe it would be worthwhile rerunning this project at a similar theme park located in a much warmer area as we predict the data may reveal a trend that is opposite to the trend observed here and may suggest that additional warming could constitute a business risk.