The HKJC gaming guide: New insights on consumer confidence?

Avid readers of The Economist may know the Big Mac Index as a lighthearted guide to global currency levels.Based on the theory of purchasing-power parity, the Big Mac Index works on the notion that exchange rates should move towards a level that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.For example, the average price of a Big Mac in America in July 2015 was $4.79; in China it was only $2.74 at market exchange rates. So the "raw" Big Mac Index says that the yuan was undervalued by 43% at that time. It’s an intelligent and enjoyable way to view global economics outside the series and often dense data we're used to.But locally, what other indicators of economic health can we look to? Yes, there's regular retail updates provided by the government, in addition to numerous reports from the likes of Nielsen and Ipsos. But what else?Betting on horse racing is an activity enjoyed by a diverse selection of the Hong Kong community, so when the numbers from yesterday’s new racing season started to roll in this morning, it was interesting to note how close it seemed to mirror the sentiment of Hong Kong’s economic outlook.If you weren’t aware, yesterday saw the start of a new racing season for the Hong Kong Jockey Club, a period of the year which sees tens of thousands of Hongkongers turn out each week to bet big on horses running around in circles.Betting figures for the 2014/15 season saw were up 5.8% to HK$107.9 billion. Yes, this is serious money.Yesterday’s launch event in Sha Tin saw more than 72,000 people (slightly down on last year) turn out for the 10-race season opener and punters set a new high – spending HK$1.147 billion.That figure, while still at record-breaking levels, was up just 1% on the same day in 2014, where punters went all out and opened their wallets by 10% on 2013.There are also lessons from the Jockey Club that we can take. In the lead up to yesterday's race, the HKJC has bolstered its marketing activity, increasing its presence online and engagement with the racing community.Winfried Engelbrecht-Bresges, the Hong Kong Jockey Club’s chief executive officer, described yesterday as a more than resilient start to the season, but hinted that marketing had played a role the high number."To achieve this level under the very difficult economic circumstances is really satisfying and we are delighted,” he said.“This shows the attractiveness of our racing product and the value of the investment we have made through our marketing initiatives. Our customers are obviously very keen to participate.”So what can we glean from these results?Despite Hong Kong's somewhat gloomy economic outlook for the remaining months of 2015, it seems clear that Hong Kong consumers will remain resilient and while we might not see the likes of a 10% rise anytime soon, people are prepared to spend.It also shows that investments in marketing should not be cut in order to save the bottom line. From the HKJC example, we can see that getting your customers excited by a product, no matter what you are selling, can pay healthy dividends.