By Allison Coleman
The Yalobusha County Historical Society (YHS) has kindly invited me to be their guest speaker during this month’s meeting. I am excited and honored to be asked to come and speak to this organization about the various aspects of my job, what I do for the county, and what I hope to do in the near future. It’s opportunities like this that help to make MSU Extension Service a viable and relative entity within our county. Look forward to seeing all of the Historical Society tomorrow afternoon!
After such great public forums in both Coffeeville and Water Valley this week. I thought it would be fitting to elaborate a little bit more on what economic impacts are and how they work on the county level.
So what is Economic Impact?
Economic impacts are effects on the level of economic activity in an area. They are usually viewed as the expansion or contraction of an area’s economy, resulting from changes in a facility, project, or program.
Public policy makers often want to know the impact of community economic development projects on the local areas. How do you define economic impacts?
They are usually defined as (1) business output (or sales volume), (2) values added (or gross regional product), (3) wealth (including property values), (4) personal income (including wages), and (5) jobs.
Any of these measures can indicate improvement in the economic well-being of area residents, which is usually the major goal of economic development efforts.
How do economic impacts occur? They typically occur in two phases: (1) direct economic effects are the changes in local business activity occurring as a direct consequence of public or private business decisions or public policies and programs; and (2) the “indirect” and “induced” impacts of a project are the “multiplier effect,” since they can make the overall economic impacts substantially larger than the direct effects.
What are economic multipliers? Multipliers arise as a result of local businesses, households, and governmental agencies purchasing goods and services from one another. Such interaction within the local economy created additional or multiplier effects. Three common multipliers used in economic impact analysis include employment, income, and output.
They measure the additional change given a one-unit change in economic activity. Multipliers are affected by geographic and economic surroundings; thus, not all multipliers are created equally. However, economic analysis shows that a potential development may impact key sectors of the local economy.
It usually focuses on four key areas: 1) employment, 2) labor income, 3) output, and 4) government finances or taxes. Analysts typically measure economic impact by using primary and secondary data and some type of economic model of the local economy. Information about the new firm’s local investment, payroll, employment, output, and sectors are relevant to plant operations let them estimate the economic impact of such development in two phases: construction and operation.
Article Source: “Understanding Community Economic Impacts,” Dr. Al Myles.