Economic Impact Analyses

Economic impact analyses are used to determine the impact of an action or activity on the economy, whether it be local, regional, state or national. An examples of this type of analysis include the estimation of the economic impact of participants in recreation activities on the local economy. Recreationists will spend money on goods and services related to their recreation experience. This "direct effect" will have a ripple effect on the rest of the economy. Those firms earning revenue from the recreation spending will, in turn, spend addition money to provide the additional goods and services for the increased recreation demand. This is know as the indirect effect. Induced effects stem from people and firms recieving additional income as a result of spending by employees of the businesses that are impacted by the direct and indirect effects of spending by recreationists. This additional income results in increased demand for goods and services and increased production of inputs. A study performed by English et. al. (see table below) estimated the economic impact of tourists and residents participating in recreation activities in Monroe County on the regional economy (Monroe, Dade and Broward Counties).

The first column in the table below is the sum of the three county area from the data on this web site. The second column is the total income economic impact estimate (the sum of direct, indirect and induced impacts) found in English et. al. The third is the the impact estimate as a percentage of the three-county total.

Total Economic Impacts from Visitor Spending

 

Total Income

 

Three- County Total

Impact Estimate

Percent of 3-county Area

Ag., Forestry & Fisheries

318.20

8.16

2.5

Mining

36.32

0.13

0.4

Contruction

2,799.58

24.01

0.9

Manufacturing

4,326.21

68.83

1.6

Transp., Comm & Utilities

4,903.51

88.71

1.8

Retail Trade

6,435.41

465.38

7.2

F.I.R.E

5,542.54

196.04

3.5

Services

18,952.31

792.07

4.2

Government

8,123.41

43.76

0.5

Total

51,437.49

1,687.09

3.3
  • Source: English, D.B.K., W. Kriesel, V.R. Leeworthy, and P.C. Wiley (1996). Economic Contributions of Recreating Visitors to The Florida Keys/Key West National Oceanic and Atmospheric Administration. Silver Spring, MD. 
  • Table shows annual estimates for the  three-county region (Dade Broward and Monroe). Industrial groups aggregated to the one-digit SIC level.
  • Output, income and value added estimates are in millions of 1996 dollars. Employment estimates are number of full-time equivalent jobs.

As can be seen, the economic impact estimates do not have any specific meaning by themselves because there is no frame of reference. However, when viewed as a percentage of the three county area, one can determine the significance of the impact. One can also determine which sectors are most affected by the influx of money. One way that the data on this web site may be used is to provide the baseline economy measures needed for comparison.



(top)