How Not to Be Bamboozled by Local Economic Studies - Day One

TodayToday

• Types of storiesTypes of stories

• Questions to askQuestions to ask

TomorrowTomorrow

• Concepts in economic impactConcepts in economic impact

• Common ratiosCommon ratios

• The multipliersThe multipliers

• The expertsThe experts

Nov. 9, 1998

Economic impact storiesEconomic impact stories

• The lobbyistThe lobbyist

• The boosterThe booster

• The stimulusThe stimulus

• The local monumentThe local monument

• The defenderThe defender

The lobbyistThe lobbyistJob-killing regulations, job-growing spendingJob-killing regulations, job-growing spending

Industry claimsIndustry claims

• 127,000 for F-35 joint strike fighter (Lockheed Martin)127,000 for F-35 joint strike fighter (Lockheed Martin)

• 180,000 lost if EPA regulates power plants more 180,000 lost if EPA regulates power plants more stringently, (American Coalition for Clean Coal stringently, (American Coalition for Clean Coal Electricity)Electricity)

• 1.5 million new jobs in 5 years in scrubber and air 1.5 million new jobs in 5 years in scrubber and air pollution control industries (Institute of Clean Air pollution control industries (Institute of Clean Air Companies)Companies)

• 181,000 lost to airline taxes (Air Transport Assoc.)181,000 lost to airline taxes (Air Transport Assoc.)

““Many economists Many economists think most of that is think most of that is

pretty sillypretty silly””

David Card, president of Society of Labor Economists, as David Card, president of Society of Labor Economists, as quoted in The New York Timesquoted in The New York Times

The stimulusThe stimulusLocal effects of government spendingLocal effects of government spending

$688,785$688,785

$266,259$266,259

The boosterThe boosterTourism, Super Bowls and conventionsTourism, Super Bowls and conventions

Personal income in Tupelo: $901 million;Retail sales: $800 millionTotal reported economic impact of tourism and events: $60 million

The Local MonumentThe Local MonumentMaking choices with local dollarsMaking choices with local dollars

Why?•Some are relatively labor vs. materials intensive•Engineering as a higher value of new projects•Not mentioned: Size of the projects – much lower cost for signage, etc. No data per mile

The DefendersThe DefendersLosing and moving jobsLosing and moving jobs

In Texarkana, up to 500 jobs have been or will be lost in a city of approximately 35,000, said Jerry Sparks, director of economic development for the Texarkana Chamber of Commerce. “If you start looking at 500 jobs lost in this community, ... you rapidly get into the hundreds of millions of dollars in loss in the community,” he said.

AskAsk

• Who did the study and who paid for it?Who did the study and who paid for it?

• Any actual known or assumed numbers (total Any actual known or assumed numbers (total payroll, tax rebates, visitor days and average payroll, tax rebates, visitor days and average spending)?spending)?

• Which types of impact? Which types of impact?

• Over how long? Annual, total 5-year, construction Over how long? Annual, total 5-year, construction only?only?

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