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Economic Impact Analysis

An economic impact analysis examines the effect of a policy, project, or event on the local economy. An economic impact will quantify the economic value to a local, regional, and state economy, including value of production, jobs by sector, jobs by income level, and ax revenue generated. A properly designed economic impact will educate others not only of the impact of a project, but also the opportunity it represents.

An economic impact analysis may cover the following areas:   

  • Project Construction
  • Ongoing Operations
  • Impact on Economic Development
Project construction and operations are quantitative, and the latter more qualitative. A study will take into account both one-time investment costs, including land and construction costs and new job creation, and ongoing impacts, including job creation and continuing tax revenue.

An economic impact may include the following areas of analysis:

Economic Impact

  • Jobs, wages, income, spending, and output

Supplier Impact

  • Jobs and income supported by suppliers

Construction

  • Proposed expansion construction activity
  • Supporting infrastructure construction
  • Housing supported by employees
  • Resulting retail development to support employees

Taxes

  • Detailed breakdown of tax revenue by source:  (sales, property, income, etc)

> State vs. local tax revenue

  • Indirect taxes generated from employee spending

Social / Strategic

  • How the Project affects community image and quality of life?
  • How the Project will support broader economic development goals for the region?
  • How the Project supports the recruitment and retention of young professionals?

Research / Entrepreneurial effects

  • How the Project affects new business creation?
  • How the Project supports commercialization and new technology creation?

Value of an Economic Impact Study

A study will aid in external public relations efforts by providing tangible and comprehensive data on jobs, income, and taxes created by a project. Studies are typically used to support:

  • Media relations
  • Legislative relations
  • Public relations
  • Community education
  • Executive speaking engagements
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