Estimating Economic Impacts Using Industry and Household Expenditures

Community development practitioners are often requested to assess the economic impact of some event or change in policy. One approach for estimating impacts utilizes input-output (I/O) modeling techniques. Input-output models are traditionally used to derive economic multipliers, which are then used in economic impact analysis. However, they also contain regional economic accounts which describe the structure of a regional economy. I/O accounts contain estimates of expenditures on goods and services by households, governments and industries. The method proposed in this article shows how expenditure information obtained from the I/O accounts can be used to generate detailed information of an event to be studied. By using the expenditure information, a better understanding of the initial event can be obtained. An example of a study examining the economic impacts of a proposed power plant in Bucksport, Maine, using MicroIMPLAN, a desktop computer based I/O model, is provided.