URBAN ECONOMICS

Economic Impact Analysis

This project allows you to perform a simplified version of an economic impact analysis.  This is the type of analysis that might be performed by a local government or by a private organization to determine the impact of a particular policy or event.  The scenario is that an organization if considering locating a facility in a region that will involve expenditures of $30 million a year coming into the local economy.  Each student in the class should choose a different industry from the following list:

Industries

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I. Economic Impact Analysis

Use the RIMS II multipliers to calculate the impact of the facility on employment, earnings, and output for each of the aggregated industries that are given.  The multipliers are at the following links:

Final Demand Employment Multipliers

Final Demand Earnings Multipliers

Final Demand Output Multipliers

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II. Demographic Analysis

To further individualize the project, each student will choose a different county for the demographic analysis.  Data for the county can be obtained at the following site:

http://www.census.gov/quickfacts

The following variables are needed:

• Population Estimates, July 1, 2019

• Total Employment, 2018

• Persons Per Household, 2014 - 2018

From the first two, calculate the population / employment ratio.

Determine the impact of the increased economic activity on the variables below, using the given assumptions:

1. Population - X.XX people for each additional worker, based on the population employment ratio calculated above

2. Number of households - Y.YY people in each household, from the Census data

3. Homeownership - 64.4 percent of of the households will be homeowners, 35.6 percent will be renters

4. Homes needed - 1.016 homes per homeowner (1.6 percent vacancy rate)

5. Rentals needed - 1.078 rentals per renter (7.2 percent vacancy rate)

6. Automobile ownership - 1.88 cars per household

7. Annual vehicle miles - 13,476 miles per year per vehicle

8. Peak-hour trips - 1 peak-hour trip per occupied home, 0.7 peak-hour trips per rental

9. Number of students - 41 school-aged children for every 100 housing units (both occupied and vacant)

10. Daily indoor water consumption - 88 gallons per person per day

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III. Fiscal Analysis

Determine the fiscal impact of the plant, based on the following assumptions:

1. Police - The police department has a standard of maintaining 2 police officers for every 1,000 residents. How many more police officers must be hired to maintain this standard?

2. Fire protection - The fire department has a standard of maintaining 1 firefighter for every 500 housing units. How many more firefighters must be hired to maintain this standard?

3. Education - For every 30 new students, a new teacher must be hired.  How many new teachers will be needed?

4. Water - The city must import any extra required water from outside the region.  Water is measured in acre feet, each of which is 326,000 gallons.  How many extra acre feet must be bought each year?

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Output

Please prepare a short report on the impact of the facility. The report should be typed in a word processing document. It will be due on October 23.