YesterdayYesterday• Types of storiesTypes of stories

• Questions to askQuestions to ask

HomeworkHomeworkTampa Bay & Co.Tampa Bay & Co.

Hillsborough County Visitor reportHillsborough County Visitor report

TodayToday• Concepts in economic impactConcepts in economic impact

• Common ratiosCommon ratios

• The multipliersThe multipliers

• The expertsThe experts

TruismsTruisms

• The easier it is to move, the less local factors can The easier it is to move, the less local factors can influence it.influence it.

• A dollar is only spent once, but what it’s spent on A dollar is only spent once, but what it’s spent on matters.matters.

• Whoever is paid to do an analysis will likely Whoever is paid to do an analysis will likely produce the answer that’s desired.produce the answer that’s desired.

• There is no right answer. No one really knows. There is no right answer. No one really knows.

Figure outFigure out

• Do the known numbers make sense? What change Do the known numbers make sense? What change causes a big effect?causes a big effect?

• Dollars per job: subsidy, spending or revenuesDollars per job: subsidy, spending or revenues

• Multipliers : Impact per dollar spent, jobs leveraged.Multipliers : Impact per dollar spent, jobs leveraged.

• A comparison: A comparison: • Local totals (percent of total local economy)Local totals (percent of total local economy)• National averages (dollars per job, multipliers)National averages (dollars per job, multipliers)• Growth rateGrowth rate

• Different units of measure: per dollar, per job, per mile Different units of measure: per dollar, per job, per mile built? built?

Industry $1,000 sales/employee

Characteristics

Manufacturing $397 High wages, high productivity

Construction $236 High wages, buy many materials locally

Wholesale trade $959 Pass-through costs high

Retail trade $253 Low wages, little bought locally

Information $314 High wages, little indirect

Input-output modelingInput-output modeling

• Basis of many economic impact statementsBasis of many economic impact statements

• Every business buys something and sells Every business buys something and sells something – the difference is value added.something – the difference is value added.

• Do they buy things made locally? Construction Do they buy things made locally? Construction often yes, retailing almost never.often yes, retailing almost never.

• If you know one piece of the puzzle, you can If you know one piece of the puzzle, you can estimate the rest, even if it’s not easy, based on estimate the rest, even if it’s not easy, based on the I-O tables of the National Accounts at the Bureau of Economic Analysis (the basis for calculating the (the basis for calculating the GDP.)GDP.)

Elements of economic Elements of economic impact projectionsimpact projections

• Actual spending (initial change)Actual spending (initial change)

• Direct effectsDirect effects

• Indirect effects (earnings Indirect effects (earnings multiplier)multiplier)

Source: RIMS 2 user manual

Type Amount

Sports facility operation (initial change)

$22.8 million / 250 jobs

Purchases by sports facility (direct effects)

$13 million / 175 jobs

Earnings effect (payroll being spent on other local goods and services)

$12 million / 190 jobs

Total $47.8 million / 615 jobs

Watch out for…Watch out for…

• Most statistics are only for private industry – Most statistics are only for private industry – revenue shifted from government appears new.revenue shifted from government appears new.

• The more local the analysis, the lower the effect. The more local the analysis, the lower the effect.

• Most initial estimates come from interested playersMost initial estimates come from interested players

ResourcesResources

• Bureau of Economic Analysis• Local areas personal income and employment• Regional Input-Output Modeling System (RIMS II)• Value-added by industry

• Bureau of Labor Statistics• Quarterly Census of EmploymentQuarterly Census of Employment

• Census BureauCensus Bureau• County Business PatternsCounty Business Patterns• Economic Census (5-year cycles)Economic Census (5-year cycles)

Regional economic Regional economic accountsaccounts

County business patterns

Economic censusEconomic census

Quarterly Emp & WagesQuarterly Emp & Wages

Questions?Questions?Sarah.cohen@duke.edu / 919.613.7348Sarah.cohen@duke.edu / 919.613.7348