Using Input-Output Analysis for Estimation of Distributional Impacts from Plant Openings and Closings

Abstract

This chapter shows how input-output models can be used to estimate impacts to a regional economy from industrial plant openings and/or closings. It presents the procedures developed by Leo T. Guedry and David W. Smith to estimate the distributional impacts of industrial plant location. The chapter explores an example industrial plant location in the northeastern Nevada counties of Humboldt and Lander. It discusses the use of input-output modeling procedures for impact analysis from industrial plant closings. New changes occurring in rural America, local economic development groups have expressed interest in estimating the economic impacts of proposed recruitment of industrial plants or closing of an industrial plant in their community. One method of determining the impacts of industrial plant openings and/or closings is input-output analysis. Deriving impacts of the out-movement of a firm on the entire economic sectors of a local economy can be treated in some degree with the same procedures as the analysis of an incoming industry or sector.