Axe ’Em, Jacks!
Economic impact studies are just one of the services offered by The Center for Business and Economic Research.
Any change in economic activity – a concert or another event, an opening of a new retail store, expansion of a manufacturing facility – triggers a larger change in the local economy. An economic impact study is a way to measure the resulting increase in output produced, incomes earned and jobs created or supported.
When new spending is introduced to an area, it impacts existing activity in three distinct ways:
- The direct impact stems from an increase in dollars used to purchase goods and services or to hire workers.
- The indirect impact occurs when other businesses increase their purchases of products that serve as inputs for the new activity.
- Any new spending increases the income of those who sell goods and services, and at least some of that income is spent locally, resulting in the induced impact.
The resulting increase in economic output translates into:
- more goods and services produced and consumed
- more jobs created and supported
- and more income earned.
This, in turn, contributes to local government's tax revenues, which has the potential to improve infrastructure, fund programs, and otherwise raise residents' standard of living.
Data from the annually-updated Bureau of Economic Analysis are used to calibrate an Input-Output model which can be employed to estimate the individual and combined effects of the direct, indirect and induced impacts.
