Home Border Economy Economic Impacts of Extending Arizona’s Border Zone

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Maile L. Nadelhoffer


Today, at DATOS: Southern AZ Regional Overview – Hispanic Market Breakfast at the Hilton Tucson El Conquistador, Alberta Charney, Ph.D., faculty member and senior research economist at Eller’s Economic and Business Research Center (EBRC), presented results of a new study simulating economic impacts of extending Arizona’s border zone from the current 75 miles to include the entire state to a crowd of about 400.  In 2015, the Maricopa Association of Governments (MAG) requested that the UA conduct an economic impact analysis of this proposed extension on Mexican visitor spending in Arizona. Several regional planning agencies including MAG have long felt that allowing pre-cleared Mexican border crossing card holders the opportunity and flexibility to spend their tourist dollars throughout Arizona will invigorate tourism-sensitive economies in both rural and urban regions of the state.

Dr. Charney outlined calculations for baseline expenditures of Mexican visitors to Arizona from 2013 to 2016, and provided several “what if” scenarios including 1) an increase in all border crossers by three percent; 2) an increase in passenger crossers by three percent; and 3) increases of five percent, ten percent and fifteen percent in the number of Mexican travelers traveling north of the existing border zone.

The analysis used data and detailed characteristics of Mexican visitors and their spending patterns obtained in an extensive 2007-2008 Mexican visitors study, conducted by EBRC for the Arizona Office of Tourism, combined with current and projected trends and volume of border crossings into Arizona.

“The proposed extension could generate up to $181 million in additional estimated spending and 2,179 additional jobs in 2016,” concluded Charney, “and bring the total projected spending of Mexican visitors to Arizona to nearly $3.1 billion with a total jobs impact of 31,856.”

“However, there are risks associated with these estimates” warned Charney, “if oil prices remain depressed long-term and the Mexican Peso-U.S. dollar exchange rate remains at historic highs, this could adversely affect Mexico’s overall economy and lower Mexican consumer spending and travel.”

Read the entire report “Extending the Border Zone to the Entire State of Arizona: Estimated Expenditures and Economic Impact Simulations, 2013-2016.

After Dr. Charney’s remarks, study co-author and EBRC research economist, Alan Hoogasian took the audience on a tour of EBRC’s new Arizona-Mexico Economic Indicators website sponsored by the Arizona-Mexico Commission, Arizona Commerce Authority, Arizona Department of Transportation, and Arizona Office of Tourism. The site offers over three thousand time series tracking trade and competiveness in the Arizona-Mexico region. “What I think is really great about this site is that it is interactive,” said Hoogasian, “users can download all the data they see, click on a table to get a trend chart, or if they want to use a map or a chart in a presentation they can download it in multiple formats with a click.” All the data on this site are constantly updated and users are assured they have the most recent statistics.

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Photo of tourists in Sedona, AZ courtesy of Shutterstock.