IMPLAN Blog

In the realm of economic analysis, understanding the full scope and implications of a firm's activities, an industry's growth, or the repercussions of a significant event is paramount. Economic impact studies serve as invaluable tools for unraveling these complexities, shedding light on the multifaceted effects that reverberate through economies. Today, we’re exploring why leveraging IMPLAN Cloud on a national scale is indispensable for informed decision-making.

The Farm Bill is a comprehensive piece of legislation that governs various agricultural and food programs, including SNAP, and has significant implications for the agricultural sector and the broader economy.

IMPLAN is a platform that combines a set of extensive databases, economic factors, multipliers, and demographic statistics with a highly refined, customizable modeling system. The foundation upon which economic impact analyses are built is the input-output (I-O) model. Understanding I-O analysis and the assumptions they employ are crucial to properly performing and reporting your own analysis.

So, you’re hoping to gain insight and quantify the impact of an industry, a new or existing business, expected growth or changes, or a specific event to the economy of a particular region. Where do you even begin?

“How can $1 of spending support more than $1 in the local economy?”

We get questions like this about economic impact analyses all the time. The answer is very straightforward. The results of an input-output (I-O) analysis are broken down into direct, indirect, and induced effects. The combination of these overarching economic effects often total greater than the initial economic input. Each level of effects captures a different portion of the complete economic portrait. In order to understand the totality of an impact, you must conceptualize how each value is defined and what they represent.  

The foundation upon which IMPLAN economic impact analyses are built is the input-output (I-O) model, and the basis for I-O models are multipliers. Multipliers are rates of change that describe how a given change in a particular industry generates impacts in the overall economy (e.g. for every dollar spent in the economy an additional $0.25 of economic activity is generated locally, implying a multiplier of 1.25). What multipliers represent and how they are calculated can vary significantly. 

If you’re looking to conduct an economic impact analysis study, chances are someone like you has performed and published something similar using IMPLAN. Conversely, if you’re attempting to study something unlike anything else, between IMPLAN’s data, applications, and knowledgeable customer success and education services teams, you have all the tools you need to get started.

Developed by the United States Forest Service (USFS) in conjunction with the Federal Emergency Management Agency (FEMA) over 40 years ago, IMPLAN boasts an unrivaled history of economic expertise. The USFS remains an active user of IMPLAN today along with a multitude of local, state, and federal government entities, a broad range of renowned academics, economic development entities, professional associations, consultants, and the United Nations.

IMPLAN is built on many years of economic data – but how can it help when you’re curious about the economic impacts of an industry without a documented history to examine?

Emerging industries, such as legalized cannabis, are reshaping local economies and generating ripple effects that influence job creation, tax revenues, and broader economic landscapes. For policymakers, business leaders, and researchers, understanding these impacts is essential for making informed decisions. IMPLAN, a robust economic impact analysis tool, is particularly suited for analyzing emerging industries due to its flexibility, data granularity, and customization capabilities.

Let’s take a look at how IMPLAN can be employed to measure the economic impacts of new industries.

Periods of financial uncertainty—whether due to budget negotiations, policy shifts, or economic downturns—can have widespread implications across industries, public services, and local economies. When government funding is delayed or reduced, the ripple effects can be felt far beyond the initial disruption, impacting employment, wages, and economic growth.

If you review the results of an IMPLAN economic impact study, you will not find GDP listed in the results. Naturally the question arises, "What is the GDP?" Within IMPLAN results, that value is actually demonstrated in multiple ways. 

Gross Domestic Product (GDP) is defined as the total market value of all final goods and services produced within a region in a given period of time (usually a quarter or year). GDP is the sum of value added at every stage of production (the intermediate stages) for all final goods and services produced within a region in a given period of time. In other words, GDP is the wealth created by industry activity.