Economic Impact Analysis - Specific Issues - Factor Analysis
Methodology  -  Lake State Examples - Other Examples         
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Lake States Examples:

Anderson, C. and D. Otto. 1994. The Economic Impact of Rural Highway Bypasses: Iowa and Minnesota Case Studies. Ames, IA: Iowa State University.

Bypasses are viewed as a cost-effective method of improving traffic flow by routing traffic around central business districts of communities. However, retailers and other businesses in central business district view bypasses as having adverse impacts on them. This study examined the effect of bypasses on rural communities. The paper looked at 11 communities in Iowa and 10 communities in Minnesota. The paper used several methods to examine potential impacts. Pull factors of overall retail sales were compared in communities with and without bypasses. Total sales were analyzed in various classes of retail sales to understand the impact on different types of businesses. A survey was conducted of businesses to assess their attitude towards bypasses. This information was analyzed using a Probit model. The findings suggested that bypasses do not affect retail sales.

Wisconsin Department of Development. 1990. Economic Impact of Mergers and Acquisitions in Wisconsin: 1978-1989. Research Paper RP-90-1. Madison, WI: Division of Research and Planning.

Because of the general perception that mergers and acquisitions were having a negative impact on the Wisconsin economy, this study analyzed employment and wage data from 1978 to 1986 to determine if there were any negative effects. A statistical regression technique was used in this analysis. In addition, the study sought to determine if there was a difference between hostile mergers and acquisitions and friendly ones. The study found that on average 9,400 jobs and $220 million in payroll were affected each year. Loss of employment due to an out-of state acquisition was statistically significant; and hostile acquisitions resulted in a larger loss of employment than a friendly takeover.

Lieber, S. R., D. R. Fesenmaier and R. S. Bristow. 1989. "Recreation Expenditures and Opportunity Theory: The Case of Illinois." Journal of Leisure Research 21(2):106-123.

This paper investigates the factors that affect decision making of recreators. In particular the spatial context within which recreators make destination choices in considered. The relative effects of site characteristics are compared to the spatial context using a multiple regression model. Significantly, the results show that agglomerative effects and contextual effects of spatial structure are the principal factors influencing per person per day expenditure levels. The number of other facilities within 20 miles of the chosen destination had the most impact on per person per day expenditures. Facility development was shown to be the dominant predictive force in accounting for the level of expenditures.

Other Examples:

Nadal, J. R., A. R. Font and A. S. Rossello. 2004. "The Economic Determinants of Seasonal Patterns." Annals of Tourism Research 31(3):697-711.

This paper examines two particular issues: the applicability of the Gini-coefficient as a measurement of seasonality in tourism and the influence of some economic variables on seasonal distribution. It was found that the Gini-coefficient is a good indicator easily able to summarize temporal variations in seasonality. Through regression analysis it was determined that some specific economic variables have a significant relationship with the seasonal shape of the tourism demand. The analysis points to the conclusion that as people have more income at their disposal they tend to divide their holidays into several sub-periods. In contrast, the nominal exchange rate plays an opposite role in that the more it benefits tourists they more tourists are likely to travel at peak periods. The overall results support the idea that tourists in the peak season differ from those in the off-season period.

Mules, T. 1998. "Decomposition of Australian tourist expenditures." Tourism Management 19(3):267-271.

This paper looks at the various components of the economic impact of tourists on the Australian economy. In particular, the total expenditure of visitors is seen as a function of the number of visitors, the length of stay and the average expenditure per visitor per night. Over time the growth in the Australian tourism industry is seen to a product of an increasing volume of visitors rather than visitors who consume more or stay longer. The author suggests this has important policy implications and the reliance on the mass tourism is a potential risk to the Australian economy. This paper illustrates that from a public policy perspective it is important to understand not only total economic impact, but also the factors that result in that impact. Misinterpreting the most influential factors in yearly expenditure trends can lead to poor public policy decisions.

Lindberg, K. and R. L. Johnson. 1997. "The Economic Values of Tourism's Social Impacts." Annals of Tourism Research 24(1):90-116.

This article presents the use of contingent valuation to estimate the economic cost of three social impacts of tourism on the Oregon Coast: traffic congestion, noise and minor crime, and provision of low-income housing. A detailed description of the contingent valuation method is provided along with a discussion of its challenges, sources of errors and major pitfalls. In particular, the challenge of discriminating between the valuation of the commodity and the valuation of the policy presented in the contingent valuation scenario is highlight. The authors present logit models of the contingent valuation scenarios and analyze the various factors that influenced a respondents willingness-to-pay. Factors analyzed included the importance of the issue, income level and length of residency in the community.

Di Matteo, L. and R. Di Matteo. 1996. "An Analysis of Canadian Cross-Border Travel." Annals of Tourism Research 23(1):103-122.

This paper presents results on the determinants of per capita same day automobile trips from Canada to the United States and expenditures on a provincial basis. The results suggest that over 90% of the variation in same day cross-border trips is accounted for by variables such as income, exchange rate, gasoline prices, the Goods and Services Tax, and seasonality factors, though the size and strength of the relationships vary across provinces.

Loomis, J. B. 1995. "Four Models for Determining Environmental Quality Effects on Recreational Demand and Regional Economies." Ecological Economics 12(1995):55-65.

This paper addresses the paucity of research which links recreational demand modeling with regional economic analysis modelling. The choice to participate in a recreational activity at a particular site are based on four related recreation choices: 1) decision to participate in a given recreation activity; 2) decision about which of the available sites to visit; 3) decision about the frequency of trips to take to a given site; and 4) decision about length of stay at the recreation site. Each of these four recreational choice decisions is related to and influenced by environmental quality and site facilities. When modelling the economic impact of the improvement (or degradation) of environmental quality or site facilities it is important to consider all four factors or risk underestimating the economic impact of the change.

Mitchell, C. J. A. 1993. "Economic Impact of the Arts: Theatre Festivals in Small Ontario Communities." Journal of Cultural Economics 17:55-67.

This study looks at the economic impact of small professional theatre companies (budget of less than 2 million) on nine small communities (population less than 10,000) in southern Ontario. Economic impact is measured in terms of total visitor expenditures. The study also calculates correlation coefficients to investigate the factors that lead to the differences in total economic impact in each of the communities. The study concludes that economic well-being will be maximized by attracting more non-local visitors (more prevalent in communities with established theatre companies) and if the tourist infrastructure to sustain tourists is in place.

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