Economic Impact Studies Research Articles

Assessment of Economic Impact Studies: The Cases of BMW and Mercedes-Benz

In 1992, the state of South Carolina offered an incentive package in excess of $120 million for the possible location of a BMW auto assembly plant. As part of the location effort, the state of South Carolina sponsored an impact study that appeared to be very optimistic. This paper evaluates this very optimistic impact study. The results presented in this paper fail to support the assumption made in the South Carolina impact study that 21 net new supplier chain firms would accompany a new BMW plant opening. Our findings suggest that the impact studies overestimated the total impact on the state economy.

An Integrative Approach to Tourism Forecasting: A Glance in the Rearview Mirror

In 1996, the South Australian Tourism Commission initiated a tourism forecasting and economic impact study to assess their future tourism industry potential. The integrative forecasting approach adopted advocates a combination of quantitative top-down and bottom-up approaches, along with a qualitative delphi survey to gather key industry input to the forecasting process. The article provides a retrospective assessment of the forecast accuracy for South Australia’s domestic and international tourism markets. Consideration of the most appropriate methods for updating existing state tourism forecasts, based on the South Australian experience, is also made. The findings suggest that the forecast accuracy for both international and domestic visitors was quite high overall. However, this apparent accuracy disguises some significant inaccuracies for particular segments, such as New Zealand and Other Asia, illustrating the difficulty of using time-series-type approaches to tourism forecasting in situations where the numbers are quite small and subject to significant volatility.

Measuring the Economic Effects of Military Base Closures

In this article, we use a newly constructed dataset to analyze the county‐level employment and personal income effects resulting from closures of military bases during 1971–94. Our estimated multipliers are mostly less than one, and considerably smaller than those typically used in economic impact studies. We find that the employment costs are mostly limited to the direct job loss associated with military transfers out of the region, and per capita income is little affected by closures on average.

Prevalence and costs of headaches for the public health system in a town in the interior of the state of São Paulo.

Despite the high prevalence, impact and economic importance of headaches, studies on this subject are rare in Brazil. The aim of the present study was to estimate the prevalence of headaches in the public health system of a town in the interior of the State of São Paulo, as well as to estimate the costs resulting from its management. Data refer to the year of 1998 and were obtained according to the following steps: 1) territorial and demographic characterization of the municipality; 2) characterization of the financial indices and social well-being; 3) budget characteristics of the municipality; 4) evaluation of the structuring of the medical service; 5) determination of the prevalence of headaches at different patient care levels; and 6) calculation of the costs of headaches. Headaches represented 7.9% of all visits at basic health units, 9.7% in the emergency room and 1.1% of hospital admissions. The total costs were R$ 85,131.31 (US$ 70,942.76) corresponding to R$ 7.59 (US$ 6,32) per inhabitant/year. The present study shows the need for epidemiological and economic impact studies, which would provide the basis for the rational use of health funds.

A Guide for Undertaking Economic Impact Studies: The Springfest Example

This study’s intent is to offer a generalizable model for undertaking economic impact studies that tourism professionals can use to conduct similar studies in their own communities. A conceptual rationale for undertaking economic impact studies is described. The four principles central to the integrity of economic impact analyses are reviewed: exclusion of local residents, exclusion of “time-switchers” and “casuals,” use of income rather than sales output measures of economic impact, and correct interpretation of employment multipliers. The economic impact of a festival on Ocean City, Maryland, is offered as an exemplar.

Strange bedfellows: the history of collaboration between the Massachusetts Restaurant Association and the tobacco industry.

This article examines the historical relationship between the tobacco industry and the Massachusetts Restaurant Association, a nonprofit trade association aligned with the food and beverage industry. The study analyzed data from Web-based tobacco industry documents, public relations materials, news articles, testimony from public hearings, requests for injunctions, court decisions, economic impact studies, handbooks, and private correspondence. Tobacco industry documents that became public after various state lawsuits reveal that a long history of collaboration exists between the Massachusetts Restaurant Association and the tobacco industry. For more than 20 years, their joint efforts have focused primarily on the battle to defeat state and local laws that would restrict smoking in public places, particularly in beverage and food service establishments. The resources of the tobacco industry, combined with the association's grassroots mobilization of its membership, have fueled their opposition to many state and local smoke-free restaurant, bar, and workplace laws in Massachusetts. The universal opposition of the Massachusetts Restaurant Association to smoking bans in food and beverage establishments is a reflection of its historic relationship with the tobacco industry.

The Use and Misuse of Economic Impact Analysis

Economic impact studies have been an important component of the debate surrounding the merits of subsidizing professional sports teams. However, various studies have arrived at remarkably different conclusions about the size of a sports team’s economic impact on the region in which they are located. The purpose of this study is to determine the causes of the wide variance of economic impact estimates between different studies. A meta-analysis was used on the 13 studies to determine the causes of the differing impacts. Although some of the variance is due to understandable differences in the size of the geographical region and sports team in question, differing assumptions about whether the expenditure of locals should be included accounted for a substantial variance in the impact.

The economic impact study of maritime policy issues: application to the German case

The economic impact study of maritime policy issues: application to the German case

The economic impact study of maritime policy issues: application to the German case

Input-output analysis basically provides an estimation of a sector's economic impact by taking into account the indirect effects on all other sectors. For purposes of policy making, however, this may produce rather rigid and inaccurate results. This paper, therefore, introduces some extensions to the basic impact analysis. These extensions secure flexibility, completeness and accurateness of the outcomes. First, an accurate cost structure is determined in a bottom-up approach, i.e. by using data from a sample of representative companies. This allows for reliable outcomes and a flexible definition of sub-sectors. Secondly, the analysis is made in an intercountry context. Thirdly, the expenditure effects of generated income are determined by a macroeconomic module. Fourthly, company-level responses to alternative policy scenarios are investigated and translated into changing model parameters. These four basic elements are applied in a case study concerning the shipping sector of Germany. The scenarios are a continuation of the present policy, a laissez-faire policy, and two framework policies in which the government creates a favourable environment for shipping companies. For each scenario, the effects on value added, employment, tax revenues and expenditures are analysed and evaluated. This paper, thus, shows the relevance of accordingly amplified input-output analysis for policy purposes.

Issues in Tourism Event Economic Impact Studies: The Case of the Albuquerque International Balloon Fiesta

Several methodological issues have emerged from the economic analysis of tourism attractions, including errors in sampling and analysis, misrepresentation of these issues, the application of a refinsed research methodology is described to measure the spatial distribution of visitor expenditures and economic impacts attributed to a stated tourism attraction. The 1995 Kodak Albuquerque International Balloon Fiesta (AIBF), considered the largest ballooning event in the world, was used as the focal attraction for this study. Direct, indirect, and induced economic effects based on the variables of output, income, and employment were examined using IMPLAN, an econometric model first developed by the United States Department of Agriculture Forest Service. Detailed analyses on multiplier effects, linkages, and leakeage attributed to the event are presented in the results and discussion sections. Discussion and recommendations based upon the study may provide a clearer picture of the consequences of methodological choices researchers make when assessing the economic impacts of staged tourism attractions.

Win, Place or Show: Gauging the Economic Success of the Renoir and Barnes Art Exhibits

Special art exhibits, sometimes known as "blockbusters", are often thought of as tourism and business generators. This belief is fostered by economic impact studies that bravely estimate the total gross domestic product or total jobs "created" by such exhibits. Unfortunately, the enthusiasm of the exhibit promoters often leads them to the uncritical use of methodologies that exaggerate the size of the exhibit's contribution to the local economy. Fortunately, such methodologies are well understood and corrective measures are available to make the estimates they produce more realistic and useful for advocacy purposes. This paper presents a comparison of two studies done in Canada to provide arts managers with a gauge for realistically forecasting the potential impact of planned "blockbusters". Several Canadian art galleries have recently hosted special art exhibits, notably the Renoir Por- traits at the National Gallery of Canada and the Barnes Exhibition at the Art Gallery of Ontario. They have surveyed the visitors to them using a corrective methodology that enables researchers to determine which visitors came to the region only because of the existence of the exhibit and which would have come to the region and spent money whether the exhibit existed or not. These data enable researchers to estimate quite accurately the amount of visitor spending that is actually due to the exhibit. This lower, but more credible, estimate is very useful in helping promoters obtain exhibit sponsorship from local tourism businesses who have become skeptical of the exaggerated claims of economic impact estimates based on standard survey approaches.

Using spatial analysis to drive reserve design: a case study of a national wildlife refuge in Indiana and Illinois (USA)

Our refuge design strategy involves a landscape approach formulated to complement existing management efforts and employ restoration in the heavily degraded Kankakee River watershed in northeastern Indiana and northwestern Illinois. The watershed historically contained an approximately 400,000 ha wetland (Grand Marsh), a diverse riverine system, oak savanna, and prairie. Today only fragments of these habitats remain. The U.S. Fish and Wildlife Service developed a preliminary project proposal (PPP) during the summer of 1996 to protect and restore habitat within the watershed by establishing the Grand Kankakee Marsh National Wildlife Refuge. The Indiana and Illinois Gap Analysis projects provided the resources to move beyond the expert workshop approach to a data-driven method for initial reserve design. Using visual analysis of various Gap Analysis data layers, we established ‘Focus Areas’ that formed the basis for the Environmental Assessment and the Economic Impact Study required under the National Environmental Policy Act (NEPA). We have initiated Phase II of the reserve design analysis using preliminary results of the Indiana Gap Analysis project and C-Plan software in conjunction with the New South Wales National Parks and Wildlife Service.

The Use of Tourist Money Flow Analysis in Measuring the Impact of Tourism Development on the Regional Economy

There have been several research methodologies to measure the impacts of tourism development on the regional economy, such as input-output analysis, income multiplier analysis, labor creation effect analysis, etc. Most of these are based on regional economic indices using secondary data for medium to large regional units. This study tests the possibility of adopting the tourist money flow analysis, which is centered on tracing a series of money flows beginning with tourists' payment for room, board and shopping, followed by tourist companies' expenditure for material and service purchase, wage, utilities, rent, tax and so forth, and by tourism workers' expenses for living and savings. This method makes it possible to reveal the amount and geographical extent of tourist money flow and draws some meaningful regional economic figures. Case studies of two tourist developing areas show that it can be utilized for economic impact studies for small scale areas.

Lessons learned about the methodology of economic impact studies: the nist experience

Both strategic planning and economic impact assessments must be undertaken to effectively manage government research programs, which are typically implemented through a series of research projects that can occur over extended periods of time. Planning and evaluation have been the focus of Congressional legislation, in particular, the 1993 Government Performance and Results Act (GPRA). Compliance with this Act is driving increased planning and impact assessment activity and is also stimulating greater attention to methodology. Well before GPRA, NIST began conducting economic impact studies as a tool for effective management and for communicating the nature and results of NIST research to its various constituents. Although some of the basic tools for economic impact assessment have existed for some time, NIST has had to adapt this generic methodology along a number of dimensions: selection and application of impact (outcome) measures, integration of qualitative and quantitative analyses into a complete microeconomic assessment of a projects impacts, and interpretation of the results of these analyses in the context of ongoing RandD policy debates.

The art and science of conducting economic impact studies

As the awareness and interest in sport tourism as an economic catalyst increases, so do the number of related economic impact studies. These studies have been commissioned by organising bodies as well as supportive governmental and sponsoring officials for differing purposes. Nevertheless, due to the complexity of economic impact research, the broad scope of sport tourism and the involvement of numerous variables, many such previous studies were flawed in design, resulting in fallacious conclusions pertaining to the amount of economic impact brought to a community. The authors of this paper, through reviewing more than 50 economic impact studies, attempted to unveil the art and science of economic impact research, the goal being to help sport tourism managers obtain a better understanding of economic impact research in the light of how to conduct, interpret and evaluate such studies. The scope of an economic impact study; that is, the economic region to be studied, is the first issue that needs to be addressed. Without clearly defining the impact region, it would be impossible to exclude those unqualified visitors and their expenditures from the final estimates of economic impact. The use of multipliers is the next issue to be addressed. A decision must be made as to whether or not a multiplier should be applied and if so, which type to use. The cause and source of economic impact must also be determined prior to the execution of an impact study. As related to sport tourism, a cause is a sport event, facility, or organisation that brings about the activity that impacts the economy of the host community. Another issue discussed pertains to the different methods (survey and non-survery) for collecting data. Visitor spending on lodging, food and beverage, entertainment, transportation and miscellaneous retail are common elements collected through a survey. Construction costs, player salaries, advertising fees, and tax revenues are samples of the sources of impact that need to be dealt with cautiously. Both the survey and non-survey methods have their own merits, shortcomings and circumstances to use. Attribution, accessibility, time delays and appropriateness are four problems associated with secondary data collection that could affect the accuracy of data. The different uses of vocabulary and the selective inclusion of information (tangible vs non-tan gible impacts), are but two issues related to the reporting of economic impact study results. A total of 11 types of expenditure have been identified that are commonly excluded from economic impact studies due to the difficulty in data collection. In conclusion, when evaluating an economic study, one needs to consider the study's relevance, scope, efficiency, accuracy and verification.

Patient education in rheumatology.

Patient education programs in rheumatology are emerging as important therapeutic interventions. The current evidence for their efficacy, economic benefits, and underlying causal mechanisms is discussed. Current meta-analytic studies suggest that patient education can affect knowledge, pain, joint counts, depression, exercise, and coping behaviors. Evidence is presented suggesting that self-efficacy and social support are strong underlying causal mechanisms. Although studies of the economic impact of patient education are still scant, most that exist indicate that the programs evaluated tended to reduce health care service utilization. An example of a complex cost-effectiveness study is discussed.

Estimating the net economic impact of air services

Studies examining the economic impact of tourism have traditionally focused on the inbound tourist. The conceptualization of tourism in economic impact studies, however, should be extended to include outbound local tourists and the means of transport. This comprehensive perspective may be gained by looking at tourism from the point of view of implementation of air services on particular routes. A procedure is outlined for the estimation of the net economic impact of services by a foreign carrier. This procedure is then applied to estimate the economic impact on Thailand's economy generated by additional weekly services on the Singapore-Bangkok route by Singapore Airlines.

Interim Report on Colorado Scenic and Historic Byways Economic-Impact Study

Despite the extensive use of highway designations to promote tourism, there has been little research on the economic effects of these efforts. An interim economic-impact study was conducted as an attempt to estimate the economic effects of Colorado Scenic and Historic Byway designation on tourism-related businesses in communities along the byway routes. The study's research strategies included a review of the literature and research on the economic impacts of travel and tourism, a byways traffic analysis, and a survey of community tourism businesses. The results indicated the economic significance of the travel and tourism industry, and more specifically of byway designation. The findings suggested that byway designation may have an effect on increased visitor traffic, visitor expenditures, and total retail sales in communities along the byway routes.

Antiquing as a Tourism Recreational Activity in Southwestern Pennsylvania

An economic impact study of travel and tourism in southwestern Pennsylvania iden tified 25 travel-related activities and associated visitor expenditures. Purchases of antiques appeared to be understated, therefore antiquing was included as a separate recreational activity in the second year of the study. All regional expenditures made by nonresident visitors were entered into an input-output model of the region. The majority of antique shops in the region belong to four cooperatives or antiquing centers. Annual visitation totaled 278,352 for the retail antiquing trade and was evenly split among residents and nonresidents. Nonresident visitors spent an average of $32.47 per activity day. The value-added component of the economic impact totaled $3.36 million, and 149 jobs were supported. The pursuit of antiques supported the consumption of regional goods and services and the generation of additional income and spending.

A Note on Measuring the Economic Impact of Institutions of Higher Education.

Universities and other institutions of higher education are frequently asked to justify, in economic terms, the allocation of state monies toward their programs. These institutions have often responded by conducting economic impact studies. The traditional approach to economic impact views increases in expenditures by a university as a means to create new jobs within the state and to expand the state's economic base. Recent studies have employed a new approach that also accounts for increases in the state's skill base as part of the economic impact. Although the skill-base approach yields favorable results for higher education, recent applications of the technique fail to consider fully the effects of migration on a university's economic impact and, thus, substantially overestimate the impact. Researchers are well advised to avoid the skill-base approach and to utilize the traditional economic-base approach, which produces more reliable estimates of local economic impact. Moreover, states and universities are cautioned not to place the debate over education financing exclusively in the realm of economic impact, since there are other reasons to provide publicly funded higher education.