Agenda - 12-06-2010 - 7e - Laserfiche WebLink

Browse Search

Community and Economic Development Bulletin primarily because some purchases are made outside the local economy (imports), but also due to savings and tax payments. The larger a geographic area, the more likely it is that a new dollar will be re-spent within its boundaries. Economic Impact Models and Software Applications Short of employing a full-time regional economist, how.can communities gain access to eco- nomic impact analysis when needed? While complex, large-scale projects might warrant hiring an external consultant, to assess projects on a case-by-case basis some communities opt to pur- chase industry-specific regional or local multipliers produced by the federal government. Others decide to make alonger-term investment in having this sort of analytical capability by purchas- ing alicense to operate a commercially available economic impact model and software package. The most commonly used models for estimating the economic impacts of development projects are RIMS II, IMPLAN, and REMI. Each model has advantages and disadvantages, discussed below RIMS 11 The U.S. Bureau of Economic Analysis (BEA) has created a methodology for estimating regional input-output multipliers called RIMS II (Regional Input-Output Modeling System). RIMS II "regionalizes" BEA's national input-output table by modifying it with data that capture local or regional industrial structure and trading patterns 6 RIMS II provides industry-specific multipli- ers that users must apply to local project data in order to make economic impact estimates. It is not an automated model, such as those described below, with which users can interface directly to generate impact results. RIMS II provides users with a tabular list of (1) final-demand mul- tipliers for output, earnings, employment, and value-added and (2) direct effect multipliers for earnings and employment. Final demand multipliers are used when the initial value of business output or revenues generated from a project is known. Direct effect multipliers are used when information on the initial employment and/or earnings directly associated with the project is accessible. Users can purchase multipliers for all available RIMS II industries for a particular region (one county or more) or a single industry for all states. This model is probably the most affordable option for conducting a basic economic impact analysis, but its methodology and functionality are not as robust as those of the models discussed below. For more information on the RIMS II system and its multipliers, visit www.bea.gov/regional/rims. IMPLAN An input-output model widely used to conduct economic impact studies is IMPLAN. IMPLAN is a commercially available software package that utilizes national input-output data for more than 500 industrial and commodity sectors to derive industry-specific multipliers for states and counties. The input-output data come from federal government sources including the U.S. Bureau of Labor Statistics and the Bureau of Economic Analysis and reveal the extent to which industries buy from and sell to one another in producing goods and services. In contrast to RIMS II, which merely provides users with a static table of multipliers, IMPLAN is a fully 6. Kenneth Poole, George Erickcek, Donald Iannone, Nancy McCrea, and Pofen Salem, "Evaluating Business Development Incentives," National Association of State Development Agencies, 1999. Also available at www eda.gov/PDF/lg3_ebdi_report.pdf. 19 © 2010 School of Government. The University of North Carolina at Chapel Hill