Methodological Implications of Conducting Multiplier-Based Economic Impact Assessments: A Case Study of Three Methodologies

• Activity Number: 310
• Type: Contributed
• Date/Time: Tuesday, August 6, 2013 : 8:30 AM to 10:20 AM
• Sponsor: Business and Economic Statistics Section
• Author(s): Candice Clouse*+ and Merissa C. Piazza
• Companies: Cleveland State University and Cleveland State University
• Keywords: research methodology ; economic impact ; economic development ; university economic impact

Abstract

There are many assumptions and methodological implications that researchers must understand when undertaking an economic impact assessment based on the multiplier effect. This paper will evaluate different economic impact methodologies based on input-output models used by the IMPLAN 3.0 software. Three methodological approaches will be utilized to assess the economic impact of a university a region: bill of goods method, industry creation, and the "black-box" model. The bill of goods approach requires the researcher to input detailed data of locally purchased goods and employee payroll. In the industry creation methodology, the researcher modifies the industry as it is built by the multipliers of the IMPLAN product offering better background data on the relationships between output, payroll and employment for an industry in the region of study. Finally, the black-box model requires only a total expenditures amount to be input into the model as one number. The various inputs for each method will be outlined, tradeoffs examined, and empirical results compared. Moreover, the paper will address possible public policy implications based on these different methodologies used.