Back in August we published a blog post to address one of the most common questions asked of us, “What Is IMPLAN?” One of the reasons this question remains a complicated one to answer is that economic impact analysis benefits such a diverse set of users (from academia, to federal government, to real estate and everything in between). To elaborate beyond what IMPLAN is and illustrate what it does, let’s take a look at some of our common user types and a high-level example of how each of them applies the power of economic impact analysis in their spheres of study or in their industry.
User Group 1 - Academics
The myriad topics studied and further-developed in the academic realm makes categorizing the academic use of economic impact analysis an almost futile endeavor. Academic users find new, creative applications of our economic impact analysis software and data every day—and that fact perhaps, is what they all have most in common.
Academic Use Case Example
Academics customize the software and data to fit their needs and help expand the boundaries of their fields of study. One could select from hundreds of use cases to serve as an example, but a particularly interesting and creative use we have witnessed is the application of the tool to evaluate local food sourcing. As the USDA Agricultural Marketing Service puts it, they seek to evaluate “the linkages and contribution of local foods to local economies through input-output analysis.” The USDA Agricultural Marketing Service has found this approach to be so useful, that they compiled an informative module which walks anyone else who seeks to conduct a similar analysis through the process. You can learn about the particulars of this approach more in-depth here.
User Group 2 - Associations
Associations, like academics, align with a wide variety of interests and applications. Their unifying quality, however, centers more on advocacy than observation. Associations most commonly conduct contribution analyses to quantify the impact their industries have on their local economies as well as evaluate local job wages and tax benefits brought to local economies by their industries.
Association Use Case Example
A great example of an association demonstrating the positive impacts of its industry (in this case on a national scale) can be found in the report prepared by IQVIA for the The American Medical Association of Chicago, IL entitled the “National Economic Impact of Physicians.” Their analysis of the impact of physicians across the nation boasts such impressive figures as “in aggregate across all states, physicians generated $821.6B in direct output in 2015” and that “the number of jobs directly created by patient care physicians (including the number of physicians themselves) was 3,545,399.” The full report can be found here.
User Group 3 - Local Governments & Economic Development Coalitions (EDCs)
Another common user group of the IMPLAN software includes local governments and EDCs. From justifying and determining appropriate incentive packages for a company's relocation to a specific area, to examining job impacts and jobs supported as a result of a capital investment, local governments and EDCs are finding the data they are seeking to propel their projects forward and evaluate the effectiveness of projects past.
Local Government & EDC Use Case Example
The Economic Development Coalition of Asheville-Buncombe County and the Asheville Chamber of Commerce joined forces on an economic impact study to evaluate the economic impact of $500 million in capital investment (and the jobs created as a result) across Asheville and Buncombe counties. Through their analysis, the Coalition and Chamber were able to quantify the impacts of this investment. For example “for every 1 job created, an additional 1.24 jobs was supported in Buncombe county” and “for every $1 of labor income earned, an additional $1.05 is generated.” These findings are just the tip of the iceberg when it comes to the wealth of information they were able to report on. You can see their full report here.
User Group 4 - Real Estate
Users in the real estate sector often use economic impact analysis to show the importance of changes in land-use to get buy-in from local government for their upcoming projects as is shown in the following example.
Real Estate Use Case Example
Johnson Economics, LLC conducted an analysis on behalf of ConAm Properties, LLC to assess “the supply and demand of lands appropriate for new Class A office development in West Linn, Oregon.” The study breaks down the topography of the land, the reasons it is better suited for residential rather than commercial development, and the kicker, discusses the potential positive impacts at the site including tax revenue generation, school impacts, and employment and economic impacts. Using economic impact analysis, ConAm Properties, LLC determined that the proposed project would generate an estimated $572,500 in property taxes per year, contribute positive “revenue impacts on local schools”, and support up to 170 jobs during construction. You can read more about it here.
User Group 5 - State Governments
State government users conduct economic impact analyses for projects similar to local governments and EDCs, but on a larger regional scale. An additional common use case is that of justifying the contribution of government investment in programs and infrastructure. As demonstrated in the example that follows, state governments also emphasize the importance of year-over-year (or repeated) analysis to remain apprised of how the subject of their analysis is progressing.
State Government Use Case Example
The North Jersey Transportation Planning Authority collaborated with the New York State Shipping Association and their port partners to evaluate the “Economic Impact of the New York-New Jersey Port Industry” on both of their states. The report linked here is the 7th iteration of this study. The results have been tabulated repeatedly to monitor and track the contribution of the port industry and its positive impacts on New York and New Jersey. Along with many other fascinating findings the report states that the port industry supports 200,350 direct jobs in New Jersey, 17,420 direct jobs in New York, nearly $21 billion in personal income in New Jersey, and nearly $3.6 billion in personal income in New York.
Wrapping it Up
While this is merely a selection of some of our most common user types or groups, and an even smaller cross-section of the creative ways in which they employ our economic impact analysis software and data to tell their stories, hopefully this sheds some light on how diverse and creative one can be in applying such a powerful tool. Whether demonstrating the importance and impact of sourcing local foods, highlighting the importance of physicians across the nation, or persuading a local government that a construction project will benefit the local economy, economic impact analysis gives you an incisive edge when telling your story and helps you make an impact.