Economic Impact Analysis - Input-Output Analysis
Methodology  -  Lake State Examples - Other Examples         
Back to Table of Contents                                                                                                   

Methodology:

Jackson, J., M. Houghton, R. Russell and P. Triandos. 2005. "Innovations in Measuring Economic Impacts of Regional Festivals: A Do-It-Yourself Kit." Journal of Travel Research 43(May):360-367.

This paper describes an economic impact analysis Do-It-Yourself kit that was put together to measure the regional economic impact of small to medium sized festivals. The kit is designed to be used with readily accessible software and is based on input-output analysis. Manuals and a web-page supporting the kit have also been developed. The kit was distributed to festival organizers and training session were organized in a variety of locales. The authors have the kit reported receiving more than 100 requests for copies of the kit. Preliminary results from seven case studies are reported and demonstrate the potential usefulness of standardizing data collection of this type of economic impact analysis data at different festivals within a region or State.

IMPLAN Inc. 2004. The IMPLAN Input-Output System. Stillwater, MN: IMPLAN Inc. Web Link.

This manual, produced by the firm IMPLAN Inc., describes the functionality of the IMPLAN input-output model. Included are instructions on using their software, details on the structure of the database, description of the model output and details on regional modeling.

Regional Economic Models INC. 2003. REMI Policy Insight - User Guide Version 5.3. Amerst, MA: Regional Economic Models INC. Web Link.

This is paper is the users model for the REMI Policy Insight's input-output model. Sold as more than input-output model, REMI Policy Insight not only models inter-industry linkages, but also many other relationships relating to such factors as population and labor supply, labor and capital demand, wages, costs and prices, and market shares. The Policy Insight model is designed to generate realistic year-by-year estimates of the total regional effects of any specific policy initiative. A wide range of policy variables allows the user to represent the policy to be evaluated while the explicit structure in the model helps the user to interpret the predicted economic and demographic effects. The model is calibrated to many sub-national areas for policy analysis and forecasting, and is available in single- and multi-area configurations. Each calibrated area (or region) has economic and demographic variables, as well as policy variables so that any policy that affects a local economy can be tested.

West, G. and A. Gamage. 2001. "Macro Effects of Tourism in Victoria, Australia: A Nonlinear Input-Output Approach." Journal of Travel Research 40(August 2001):101-109.

This article uses a modified, non-linear, input-output model to assess the economic impacts of tourism in the State of Victoria in Australia. Responding to the tendency of input-output models to overestimate the multiplier effects, this study develops a marginal household income coefficient model, which allows substitution between primary factors of production. Essentially, in the input-output table the household income is replaced by the income elasticities of demand. To solve the equation an iterative Gauss-Seidel method is used. Using this model, this study concluded that in gross terms day-trippers contributed the greatest amount to gross state product and employment, followed by interstate, intrastate, and least of all, international visitors. However, if substitution expenditure effects by residents are taken into account, then interstate tourism contributed the greatest amount to gross state product and employment, followed by international visitors.

Frechtling, D. C. and E. Horvath. 1999. "Estimating the Multiplier Effects of Tourism Expenditures on a Local Economy through a Regional Input-Output Model." Journal of Travel Research 37(May):324-332.

This study uses the U.S. Department of Commerce Regional Input-Output Modeling System (RIMS II) to model the economic impact of tourism on the Washington D.C. economy. Data from the U.S. Travel Data Center's Travel Economic Impact Model was used in this study. The study finds that with the RIMS II system, the use of direct-effect (or ratio) multipliers is a more appropriate than final-demand (or normal) multipliers. The tourism sector generated normal earnings levels, but employment multipliers higher than three-quarters of other local industries. Their magnitudes suggest that the tourism sector is more highly linked to local suppliers than the average industry or that it employees tend to spend more of their earnings locally, or a combination of both. The multipliers for Washington D.C. were relatively low compared to other U.S. cities. This makes sense given the small geographic size of Washington D.C., which is situated in a highly integrated metropolitan area. There are therefore many earning and employment leakages.

Steinback, S. R. 1999. "Regional Economic Impact Assessments of Recreational Fisheries: An Application of the IMPLAN Modeling System to Marine Party and Charter Boat Fishing in Maine." North American Journal of Fisheries Management 19:724-736.

This paper looks at the regional economic impact of marine party and charter boat fishing in Maine. Using IMPLAN, non-resident and resident sales, income and employment impact are estimated. This articles looks to provide a starting point toward establishing consistent and defensible techniques for conducting regional economic impact assessments of recreational fisheries and to explore appropriate uses of economic impact assessment outputs as they relate to the growing needs of natural resource managers. This is important as most studies only report the final impacts of the impact study, without describing the interdependencies that produced the impacts or how the results should be and should not be used to guide management decisions.

Stynes, D. 1999. Economic Impacts of Tourism. East Lansing, MI: Department of Park, Recreation & Tourism Resources, Michigan State University. http://www.msu.edu/course/prr/840/econimpact/pdf/ecimpvol1.pdf

This paper provides an a review of the field of tourism economic impact analysis. It distinguishes economic impact analysis from other types of economic analysis that might be carried out in tourism research. Specifically, economic impact analysis traces the flows of spending associated with tourism activity in a region to identify changes in sales, tax revenues, income and jobs due to tourism activity. The principal methods this paper identifies are spending surveys, analysis of secondary data from government economic statistics, economic base models, input-output models and multipliers.

Fleischer, A. and D. Freeman. 1997. "Multiregional Input-Output Analysis." Annals of Tourism Research 24(4):998-1001.

This brief research note provides empirical evidence that a regional input-output analysis will produce lower multipliers than a model which allows inter-regional, or multiregion, interactions. This is due to the fact that a single region model assumes that all leakages from the region do not re-enter the region at a later date and that the indirect and induced effect occur only at that single region itself and not in other regions.

United States Department of Commerce. 1997. Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (RIMS II). U.S. Department of Commerce, Economics and Statistics Administration and Bureau of Economic Analysis. http://www.bea.doc.gov/bea/ARTICLES/REGIONAL/PERSINC/Meth/rims2.pdf

This is the user handbook to the Regional Input-Output Modeling System (RIMS II) developed by the Bureau of Economic Analysis at the U.S. Department of Commerce. The handbook includes a detailed description on the structure of the model and its assumptions. It also includes instructions of what type of information that each user needs to provide to RIMS II and four case studies.

Archer, B. H. 1996. "Economic Impact Analysis." Annals of Tourism Research 23(3):704-707.

This research notes describes the challenge with the paucity of data that exists for sound economic impact analysis with input-output models. While researchers are developing more and more elegant models, the adage of "garbage in, garbage out" very much applies. This challenge is often compounded at the local or regional level with the absence of any control total data. Very rarely do regional or local accounts exist. Researchers are compelled to undertake surveys and to use appropriate methods to "massage" or adapt the data to meet the requirements of the model. Provided that such "data treatment" is undertaken logically on a conceptual sound basis, it can fill the gaps where no other data exist.

Deller, S. C. and M. Shields. 1996. The Wisconsin Extension Fiscal Impact Model: Preliminary Results. Madison, WI: Department of Agricultural and Applied Economics, University of Wisconsin-Madison.

In this preliminary report, a hybrid model of local government revenues and expenditures for Wisconsin counties and municipalities is developed. Designed with the intent of providing estimates of the impact of economic change on local governments, the fiscal model is linked to a regional (county) input-output model. These regional IO models are based on MicroIMPLAN. An example scenario of an increase in manufacturing employment for St. Croix County Wisconsin is estimated.

Finn, A. and T. Erdem. 1995. "The Economic Impact of a Mega-Multi-Mall." Tourism Management 16(5):367-373.

This paper debunks the economic impact claims of the West Edmonton Mall (WEM), a mega-multi-mall, and provides more methodologically sound estimates of the true economic impact. Biases in the WEM estimates were introduced through the substitution of judgment sampling for true probability sampling, the failure to control for differential time spent and intercept response rates, and the reporting of total rather than just incremental effects. This study adjusts the initial WEM methodology to account for this problems and instead of an estimate of 9 million visitors and an economic impact of $700 million and 40,000 jobs in 1986, the authors suggests the realistic results are 5 million visitors that had an economic impact of $176 million in household income and 13,800 jobs.

Rickman, D. S. and R. K. Schwer. 1995. "A comparison of the multipliers of IMPLAN, REMI and RIMS II: Benchmarking ready-made models for comparison." Annals of Regional Science 29:363-374.

This paper compares the off the shelf regional input-output models of IMPLAN, REMI and RIMS II. Specifically each model differs in the following respects: 1) they specify different closure rules in calculating the multipliers; 2) they use different techniques to regionalize the national technical coefficients; and 3) they use different sources of data to build the models. IMPLAN had the largest multipliers when using the default results and all pairwise comparisons between multipliers yielded statistically significant differences. After controlling for the differences in the models through benchmarking, the results of the models were generally statistically indistinguishable. The similarity of the multipliers of the benchmarked models may give practitioners more confidence in the integrity of ready-made models. However, the correct choice of the ready-model still depends on the intended use and because of their complexity and available options, ready-made models have not relieved practitioners of the burden of technical expertise.

Wagner, J., S. C. Deller and G. Alward. 1992. "Estimating Economic Impacts Using Industry and Household Expenditures." Journal of the Community Development Society 23(2):79-102.

Community development practitioners can assess economic impacts with a number of techniques. This study used input-output (I/O) modeling technique to show how expenditure information contained in the I/O accounts can generate more information about a change in policy or an event than only calculating economic multipliers. The authors used an example of a proposed power plant in Bucksport, Maine to show how expenditure pattern information obtained from I/O accounts can generate useful information. This article provides an explanation of input-output accounts and how to derive expenditure information from them. The Maine study provided more detailed information to the public debate concerning the power plant.

Briassoulis, H. 1991. "Methodological Issues: Tourism Input-Output Analysis." Annals of Tourism Research 18:485-495.

Input-output analysis of the economic impacts of tourism has many advantages, but suffers from serious limitations. This articles reviews the literature (as of 1991) and identifies the methodological issues in tourism input-output studies and the solutions proposed thus far. A systematic classification and discussion of the old and new issues is grouped into four categories: substantive issues, aggregation, structural change and prediction, and intangible impacts. Possibilities for improving the input-output model and limitations are discussed.

Fletcher, J. E. and B. H. Archer. 1991. The Development and Application of Multiplier Analysis. Progress in Tourism, Recreation and Hospitality Management: Volume 3. C.P. Cooper (ed.). New York, Belhaven Press: 28-47.

This book chapter covers the concept of the multiplier and its use in tourism research. It outlines the concept of the multiplier and provides the following definition "multiplier refers to the ratio of the change of [output, income, employment, government revenue or foreign exchange flow] to the change in the final demand which brought it about." The historical background the multiplier is examined and both the methodology of ad hoc models and input-output analysis are examined.

Fletcher, J. E. 1989. "Input-Output Analysis and Tourism Impact Studies." Annals of Tourism Research 16(3):513-529.

This paper examines the usefulness of input-output analysis to tourism economic impact assessment. It concludes that (at the time) there is no other viable alternative method for country that wishes to examine in detail both the economic impact of tourism and the way in which tourism fits into the country's economic structure. The restrictive nature have some of the assumptions of input-output analysis are discussed and some possible strategies for avoiding these pitfalls are examined. Similarly, the type of multipliers that an input-output model produces are detailed and the importance of correctly interpreting these multipliers is highlighted.

Archer, B. H. 1977. Tourism Multipliers: The State of the Art. Bangor, University of Wales Press.

This is an oft cited publication on the theory, method and application of multipliers to tourism. Three types of multiplier models are detailed: economic base models; Keynesian-based models and input-output analysis, which is based on the work of W. Leontief. The author bemoans the fact that multipliers, which are increasingly being used in tourism research, are poorly applied and often by practitioners without proper understanding of the method.

Lake States Examples:

Wisconsin Tourism Development. 1990-2003. The Economic Impact of Expenditures by Travelers on Wisconsin - Calendar Year 1990-2003. Madison, WI: Unpublished report compiled by Davidson-Peterson Associates (York, Maine) for the Wisconsin Department of Development/Tourism. Web Link. 

This series of reports measured the economic benefits of tourism of travelers to Wisconsin's residents and governments. The authors of the report used a T-MAP-I economic impact model to measure economic benefits. The informational inputs into the method includes an inventory of lodging facilities, a seasonal survey of lodging business activity, an expenditure model, a telephone survey of Wisconsin residents, and an expenditure forecasting model. These reports provide detailed information about tourist expenditures and their impacts both for the state and for each county. The latest report includes seasonal data.

Upneja, A., E. L. Shaffer, W. Seo and J. Yoon. 2001. "Economic Benefits of Sport Fishing and Angler Wildlife Watching in Pennsylvania." Journal of Travel Research 40(August):68-78.

This article answers two major policy questions about the economic benefits of sport fishing in Pennsylvania: what is the annual value of Pennsylvania's sport fishing resources, and what is the annual economic impact from the use of that resource. Data from a mail-based questionnaire with 907 respondents was used to answered these questions using the travel cost method and input-output analysis (IMPLAN). The annual total value of the sport fishing resource was found to be $3.98 billion or about three times the total out-of-pocket expenses. The study found an overall economic impact of sport fishing of 4.75 billion.

Ford, J. and D. W. Marcouiller. 1998. The Wisconsin Maritime Museum in Manitowoc. Extension Reports Series 98.2. Madison, WI: Department of Urban and Regional Planning, University of Wisconsin-Madison Extension.

This study uses input-output analysis to quantify current direct, indirect and induced economic impact of the Wisconsin Maritime Museum in Manitowoc County. Results suggest that the Museum is responsible for generating almost $1 million in regional income and 53 jobs. With a museum expansion and an application of average expenditure patterns, the combined county wide impact may increase as much as $500,000 and by 23 jobs. Cost-benefit project analysis should be used, however, to weight these anticipated positive benefits with inherent underlying political and social implications and fully address the impact of museum expansion.

Stynes, D., C. R. Nelson and J. A. Lynch. 1998. State and Regional Economic Impacts of Snowmobiling in Michigan. East Lansing, MI: Department of Park, Recreation & Tourism Resources, Michigan State University. Web Link.

This study estimates the economic impact of snowmobiling in Michigan to regional economies and the state as a whole using the IMPLAN input-output model. Statewide, the economic impact of snowmobilers was $48 million in direct income and 2,500 direct jobs. With multiplier effects the income impact was $93 million and 3,800 jobs. Approximately one-third of this impact was generated by out-of-state snowmobilers. Regionally snowmobile trip spending represents 11% of all tourism spending in the Western UP, 7% in the Eastern UP, 3% in the Northwest Lower Peninsula and 3.5% in the Northeast Lower Peninsula.

Bussiere, M. and S. C. Deller. 1996. Kewaunee Marina Economic Impact Study. Madison, WI: University of Wisconsin-Extension, Kewaunee Marina.

This economic impact study surveyed slipholders, storage customers and other Marina clients. An input-output analysis was conducted and found that the Marina had a positive effect on Kewaunee in terms of employment and additional income totaling over $450,000 and 31.4 jobs annually.

Deller, S. C., A. Lake and J. Sroka. 1996. The St. Croix Casino: A Comprehensive Study of Its Socioeconomic Impacts. Madison, WI: University of Wisconsin-Extension.

This study analyzed the costs and benefits of the St. Croix Casino, particularly its socioeconomic impact on the Village of Turtle Lake, the St. Croix Chippewa reservation, and Barron and Polk counties. The study used input-output models to conduct the analysis. The report also examined a variety of issues in addition to employment and income, namely, traffic, housing, public services, local revenues, crime, other local businesses, and general quality of life.

Human Capital Research Corporation. 1996. Wisconsin's Independent Colleges and Universities: An Economic and Community Impact Study. Madison, WI: Wisconsin Association of Independent Colleges and Universities.

This study of Wisconsin's Independent Colleges and Universities used input-output analysis to understand economic impact. A Wisconsin Input-Output table was developed from a 1987 benchmark USIO table and regionalized through a standard location quotient update method. This study found that these 21 colleges and universities and resident alumni spent $8.4 billion annually in Wisconsin, that the state's investment of $975 million was leveraged 100 times, that these institutions spend $722 million in direct purchases from other industries of which 90% is purchased in-state. Aside from economic contributions, over 57,000 students, faculty and staff operated almost 1,300 community programs providing library access, volunteer services, and an equivalent of $20 million through pro bono work.

Janke, J. and S. C. Deller. 1996. Structural Analysis of the St. Croix County Economy: With Insights to Economic Development Strategies. Madison, WI: University of Wisconsin-Extension.

The authors used an input-output model of regional economies, IMPLAN, to study St. Croix county. Their purpose is to better develop and refine economic development strategies. Import substitution as a strategy was explored specifically. In addition, they took a careful look at economic multipliers for the county. They concluded that 35% of all businesses make purchases from outside the county with manufacturing and agriculture both the largest importers and exporters. Import substitution was suggested as a possible economic development strategy.

Kroenke, M., N. R. Sumathi, D. W. Marcouiller and J. Martin. 1996. The Public Sector: The Florence County Economy. CCED Extension Report 96-3. Madison, The Center for Community Economic Development, University of Wisconsin-Extension.

Three separate fact sheets were prepared concerning the Florence County Economy. This fact sheet is the third in the series and looks at the effect of reducing income maintenance programs in the County. The purpose of this fact sheet is to show the importance of the government sector in the total economy of a county. The input-output model is used to model this reduction. Area businesses would experience a reduction in sales in 1992 totaling about $261,000 in addition to $53,000 in employee's wages and $154,000 in all types of income. When indirect spending reductions are accounted for, further reductions are seen for sales, wages and all types of income of $105,000, $22,000, and $57,000, respectively. With respect to employment, a total of 8 jobs would be lost.

Kroenke, M., N. R. Sumathi, D. W. Marcouiller, W. G. Wengert and J. Martin. 1996. Timber Production and Wood Processing: The Florence County Economy. CCED Extension Report 96.1. Madison, WI: The Center for Community Economic Development, University of Wisconsin-Extension.

Three separate fact sheets were prepared concerning the Florence County Economy. This fact sheet is the first in the series and looks at the significance of forest resources on the local economy, Florence County. With the use of an input-output model, MicroIMPLAN, and 1992 data, the rippling effects on the total economy due to a change in the forest sector was modeled. The fact sheet presents how an import substitution strategy or a "buy local" strategy can affect the economy. With a 1% change in the value of imported inputs, direct and indirect benefits are equivalent to generating an additional 1 1/2 jobs, and $111,000 in local sales, over $23,000 in wages, and over $41,000 in all types of income.

Marcouiller, D. W., A. Anderson and W. C. Norman. 1996. Trout Angling in Southwestern Wisconsin and Implications for Regional Development. Madison, WI: The Center for Community Economic Development, University of Wisconsin-Extension.

This study assessed trout anglers on two Southwestern Wisconsin streams for their perceptions about current resource attributes and their resource use behavior. A two stage survey effort was undertaken during the 1995 angling season including angler identification and subsequent survey. In addition to perceptive and behavioral information, the effort used expenditure data with an input-output model (constructed using MicroIMPLAN) to estimate regional economic impacts. The study also collected data on angler willingness-to-pay for nonmarket resource attributes affected through fisheries management. Results from this portion of the study were based on graphical analysis of a series of dichotomous choice contingent valuation questions.

Deller, S. C. 1995. Status of Wisconsin Farming: The Contribution of Agriculture to the Wisconsin Economy. Madison, WI: University of Wisconsin-Extension.

Using input-output analysis, this study analyzed the impact of agriculture on the Wisconsin economy. The study aimed to determine how agriculture contributes to the economy through inter-industry linkages, not only how it directly contributes to the economy. The study found that on-farm production and agricultural processing have a significant impact on the state's economy and are two important and related industries.

Janke, J. and S. C. Deller. 1995. The Contribution of Manufacturing to the St. Croix County Economy. Madison, WI: University of Wisconsin-Extension.

IMPLAN, an input-output model, was used to study the contribution of manufacturing to the St. Croix county economy. Contrary to national trends, the authors found that manufacturing was becoming increasingly important in the county economy. The study found that manufacturing contributed $162 million directly to income and an additional $128 million through indirect and induced effects. In terms of employment, through direct, indirect and induced effects, a total of 4,720 jobs were generated.

Leatherman, J. C. 1995. At Work in The Kickapoo Valley: Agriculture and Food Processing. Madison, WI: The Center for Community Economic Development, University of Wisconsin-Extension.

This is one of four fact sheets prepared to better understand the Kickapoo Valley economy. This agriculture and food processing fact sheet underscores the importance of these sectors to the area economy and to each other. The link between food processing and agriculture is significant in terms of local sales, that is agriculture selling produce to local food processors which adds value to farm commodities and the area captures a greater share of the final price of the products. Through the use of input-output modeling, one can see the impact of reducing farm programs in the area.

Leatherman, J. C. 1995. At Work in The Kickapoo Valley: Forestry and Forest Processing. Madison, WI: The Center for Community Economic Development, University of Wisconsin-Extension.

This fact sheet is one of four prepared to understand the Kickapoo Valley economy. This fact sheet reports that an opportunity exists to support local processing sectors in the Valley. The input-output model of the Valley shows that forestry production and processing is an untapped market. In addition, it shows that forestry production is selling to processors outside the area which could be captured locally if new businesses were created or existing businesses expanded. Outreach efforts could assist existing processors to expand their businesses.

Leatherman, J. C. 1995. At Work in The Kickapoo Valley: Tourism. Madison, WI: The Center for Community Economic Development, University of Wisconsin-Extension.

This fact sheet looks at the impact of tourism on the economy of the region. Using an input-output model, the impact of canoeists on the economy was looked at specifically. From a survey that was conducted in 1993, canoeists spent an estimated $655,607 in the Valley. The total direct and indirect impact of this expenditure accounts for about $700,000 in sales, about $240,000 in wages and about $463,000 in all types of income. In addition, about 18 jobs are created. This analysis shows the significance of one recreational activity to the Valley's economy and why tourism as a development strategy can yield beneficial results.

Leatherman, J. C. 1995. At Work in The Kickapoo Valley: The Health Care Industry in the Kickapoo Valley. Madison, WI: The Center for Community Economic Development, University of Wisconsin-Extension.

Of the four fact sheets prepared on the Kickapoo Valley economy, this one focuses on the healthcare industry. It represents an important part of the area economy. Because healthcare will increase only gradually as the population increases and/or ages, large changes will not occur. However, small increases can be modeled using input-output. With a 0.6 percent increase in healthcare revenue, the direct and indirect impacts would translate to about $107,000 in regional sales, $67,000 in wages, and $140,000 in all types of income. In addition, 4.5 new jobs would be created.

Marcouiller, D. W., S. Hamilton and C. Jobe. 1995. Farm Progress Days 1994: Economic and Educational Impacts. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

This study used face-to-face interviews of visitors and an input-output model (constructed using MicroIMPLAN) to assess the economic impacts of the 1994 Farm Progress Days held in Columbia County, Wisconsin. This annual agricultural technology transfer event has long been an important connecting point for agricultural producers, agribusiness interests, and Cooperative Extension specialists. In addition to expenditure patterns, the survey collected information useful to planning future Farm Progress Days events.

Marcouiller, D. W., J. Preissing and J. Alpi. 1995. Regional Economic Impact of the Crex Meadows Wildlife Area: Assessment of a Proposed Wildlife Education Center Expansion. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

This study applied characteristic expenditure patterns to a regional input-output model (constructed using MicroIMPLAN) to estimate the economic impacts associated with an expanded visitor center at the Crex Meadows Wildlife Refuge, located in Burnett County, Wisconsin. A useful comparison of previous expenditure studies is presented in tabular form. Average daily trip-related expenditures identified in a recent study of eagle watchers on the Wisconsin River was applied to the current and projected annual visits to the Crex Meadows Wildlife Area in Burnett County. Results suggest that current visitors spend approximately $2.4 million annually. The potential exists, with expansion, to increase this by $355,000 annually. When applied to an input-output model of Burnett County, these expenditures translate into economic impact measured by income generated and jobs created.

Norman, W. C., S. Hamilton and D. W. Marcouiller. 1995. A Profile of Visitors at the EAA Air Adventure Museum. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

This study undertook an examination of the Experimental Aircraft Association Museum in Oshkosh, WI. Personal interviews were conducted of visitors. The research resulted in a visitor profile of EAA visitors, trip characteristics of visitors, trip motives and activities, and economic impact on Winnebago County. Using input-output analysis, this study found that $6.6 million in the local economy was attributable from museum visitors and over 202 jobs were attributable from visitor spending.

Deller, S. C., A. Roth and E. Jesse. 1994. Economic Issues: The Contribution of Dairy to the Wisconsin Economy. Madison, WI: University of Wisconsin-Madison.

In this fact sheet, the contribution of the dairy industry to the Wisconsin economy is estimated using an input-output approach. Dairy farming and manufacturing directly contributes about $10 billion to Wisconsin's economy with an additional $7 billion coming from other industries that are linked to dairy.

Marcouiller, D. W. 1994. Economic Impacts of the Wisconsin Maritime Museum: A Study of Current and Projected Effects. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

This study estimated the economic impact of a proposed museum expansion on the Manitowoc County area by translating visitor expenditures estimates resulting from museum expansion into regional economic impact using an input-output framework. Average daily expenditures of museum visitors from a recent study of the EAA Museum in Oshkosh were applied to the current and projected annual attendance of the Wisconsin Maritime Museum in Manitowoc. Results indicate that current visitors spend approximately $1.4 million annually. The potential exists, with expansion, to increase this by $3.8 million annually. When applied to an input-output model of Manitowoc County, these expenditures translate into economic impact measured by income generated and jobs created.

Norman, W. C., S. Hamilton and D. W. Marcouiller. 1994. A Profile of Visitors to the 1993 Experimental Aircraft Association Convention. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

Visitors to the 1993 Experimental Aircraft Association Convention were personally surveyed in order to develop a profile, measure visitor expenditures, and determine the economic impact. The report provided a visitor profile, trip characteristics, trip satisfaction, trip motives and activities, visitor expenditures and economic impact analysis. Using input-output analysis, total gross output increased by $83,041,400 as a result of the convention. In addition, more than 2,500 jobs were created.

Norman, W. C., D. W. Marcouiller and S. Hamilton. 1994. A Profile of Visitors to the 1994 Dane County Fair. Madison, WI: Tourism Research and Resources Center, University of Wisconsin-Extension.

This study examined the impact of the Dane County Fair on the local economy. A visitor profile was prepared along with information about trip characteristics, trip motives and area activities, visitor satisfaction, and visitor expenditures and their economic impact. Input-output analysis produced direct, indirect, and induced impacts of nonresident expenditures which increased the total gross output of the Dane County area by $1,873,200. A total of 27 annual full and part-time jobs were created as well.

Otto, D. and J. Lawrence. 1994. Economic Importance of Wisconsin's Pork Industry. Ames, IA: Iowa State University Extension.

An input-output analysis was conducted in the study on the pork industry in Wisconsin. The report looked at both backward and forward linkages related to the industry. In terms of pork production, the report estimated a total of $550.5 million of direct and indirect economic activity in the state's economy. In terms of employment, the report estimated 1,768 jobs directly related to pork producing and an additional 5,700 jobs created throughout the rest of the economy. When the forward linkages into the meatpacking industry are included in the calculations, a total of 32,500 jobs are estimated in addition to $3.29 billion of gross economic output. Clearly, the pork industry has had an enormous impact on Wisconsin's economy and will continue to do so if the state can maintain its share of the pork industry.

Deller, S. C., N. R. Sumathi and D. W. Marcouiller. 1993. Regional Economic Models for the State of Wisconsin: An Application of the Micro-IMPLAN Modeling System. Staff Paper 93.6. Madison, WI: The Center for Community Economic Development, University of Wisconsin-Extension.

This report described the Micro-IMPLAN Modeling System developed by the USDA Forest Service. The basics of input-output models and the IMPLAN model are described. IMPLAN is applied to a representative county in Wisconsin, Brown County. Then, an example impact analysis is conducted to show how input-output models and specifically IMPLAN can be used as a tool for policy analysis.

Murray, J. 1993. The Economic Benefits of American Indian Gaming Facilities in Wisconsin. Madison, WI: University of Wisconsin-Extension.

American Indian gaming in Wisconsin, according to this report, has had a large economic impact on employment and income. A total of 32,000 jobs, 10,000 of which were directly supported by gaming, were created. In addition, net profits to American Indian communities totaled $135 million in 1992. This study used an input-output model to analyze information collected from the participating tribes in the state.

Bay-Lake Regional Planning Commission. 1987. The Economic Impact of the Port of Green Bay on the Economy of Brown County, Wisconsin -- A Technical Report to the Brown County Board of Harbor Commissioners. Staff Report Series Green Bay, WI: Bay-Lake Regional Planning Commission.

This study was conducted to get a better understanding of the role the Port played in the Brown County economy in 1986. To generate economic impacts, the Port Economic Impact Kit (PORTKIT) was used. This analytic tool was developed to assist small- and medium- sized ports to determine their economic impact on the surrounding area. An input-output model was contained in this computer driven program that allowed the user to input data and estimate indirect and induced impacts. According to this report, total sales amounted to almost $49 million, total income amounted to about $18 million, and total jobs amounted to 761. State and local taxes collected in the county and generated from Port activities were calculated to be approximately $2.5 million.

Thompson, W., R. Gazel and D. Rickman. 1985. The Economic Impact of Native American Gaming In Wisconsin. Madison, WI: The Wisconsin Policy Research Institute Inc.

This study examined the economic impact of 17 reservation casinos in Wisconsin. An input-output analysis was conducted using RIMS II Regional Multipliers. The study identified both the social costs and benefits of gaming. The study found that the state gains $326.72 million in net revenue, though social costs related to compulsive gambling reduce this figure to $166.23 million. When higher social costs estimates were used, the impact was negative. The study concluded that Native American casino gaming in Wisconsin should be viewed as a transfer program and should be assessed in the future in terms of how this type of transfer program can be improved.

Lichty, R. W. and D. N. Steinnes. 1982. "Measuring the Impact of Tourism on a Small Community." Growth and Change 13(2):36-39.

This paper presents the results of a input-output analysis of the tourism industry in Ely, Minnesota. Three surveys - one of all 300 businesses in town, one of businesses to estimate expenditures by residents and non-residents, and one of customers of Ely businesses - were used to build an input-output model of the tourism industry. A total economic income impact from tourism of $3.8 million was calculated in this study.

Strang, W. A. 1970. Recreation and the Local Economy: An Input-Output Model of a Recreation-Oriented Economy. Madison, WI: Graduate School of Business, University of Wisconsin-Madison.

This report prepared a static input-output table of Door County to model the effects of recreation on that economy. The report detailed the construction of the table and the data gathering techniques and presented the Door County input-output tables including the transactions table, the input coefficient table and the multiplier table. The final section of the report examined the short-term economic impact of tourism on the Door County economy. The report found that tourism contributed $28 million annually to the local economy.

Kalter, R. J. 1966. "A Model to Estimate the Economic Effects of Water-Based Recreation Projects on Local Political Subdivisions." PhD Thesis, Water Resources Center, University of Wisconsin-Madison. Madison, WI.

This dissertation, sponsored by the U.S. Department of the Interior, had two objectives: To provide a method for calculating the economic effects of water-based recreation and to empirically test the method. Input-output analysis was used at a county level, specifically Walworth County, to illustrate its uses, limitations, and its assistance to public policy decision-making.

Other Examples:

Lee, C.-K. and T. Taylor. 2005. "Critical reflections on the Economic Impact Assessment of a Mega-Event: The Case of 2002 FIFA World Cup." Tourism Management 26(4):595-603.

This paper reports on the economic impact assessment of the 2002 FIFA World Cup in South Korea, using an estimation method that excluded tourists whose travel was non-event related. The survey research conducted during the event established that 57.7% of total tourist arrivals during the period of the event could be classified as either directly and indirectly attracted by the World Cup. Using this data it was calculated that the World Cup generated an economic impact of US$1.35 billion of output (sales), US$307 million of income, and US$713 million of value added for South Korea. The results also showed that foreign World Cup tourists provided a much higher yield compared with foreign leisure tourists, spending an estimated 1.8 times as much. Inclusion of the expenditure by non-World Cup tourists (42.3%) in the calculations of impact would have resulted in a significant overestimation due to the further multiplication of the expanded figures by an input–output model, misleading the net economic impact of the event.

Chhabra, D., E. Sills and F. Cubbage. 2003. "The Significance of Festivals to Rural Economies: Estimating the Economic Impacts of Scottish Highland Games in North Carolina." Journal of Travel Research 41(May):421-427.

This study uses input-output analysis to estimate the economic impact of visitor expenditures at two Scottish festivals in rural North Carolina. While the local restaurants and lodging and festival vendors and sponsors benefit from substantial visitor expenditures, the multipliers are relatively small, and hence the total economic impact of the festivals represent only a small percentage of economic activity in the two regions considered. Lodging expenditures have the greatest impact on the region with a single-day festival, while expenditures on food and beverage have the greatest impact on the region with a single-day festival. The magnitude of the economic impact depends on the characteristics of both the festival (number of days) and the local economy (other attractions and linkages).

Gelen, A. 2003. "Local Economic Impacts: The British Open." Annals of Tourism Research 30(2):406-425.

This paper quantifies the local economic impact of the 1999 British Open golf tournament held in Carnoustie, United Kingdom. It begins with a comprehensive review of the economic impact literature for major or "hallmark" events and establishes a consistent methodological framework. Its approach is consistent with Tyrell and Johnston (2001) and Crompton et. al. (2001). In this study some local impacts are included as about 5% of local spectators indicated they would have gone elsewhere. The adopted framework is also careful to account for any leakages out of the local economy in spectator expenditures. Despite 20.1 million in total expenditures in the local economy the income effect was only 20.8 million. The author attributes this small multiplier effect to a careful and consistent methodology in estimating economic impacts.

Saeter, J. A. 1998. The Significance of Tourism and Economic Development in Rural Areas: A Norwegian Case Study. Tourism and Recreation in Rural Areas. M Hall and J. Jenkins (ed.), West Sussex, John Wiley and Sons Ltd.: 235-245.

This case study from Norway uses an input-output model and survey of tourists spending patterns to model the impact of the tourism economy in the town of Roeros. The results of the study indicate that approximately 10 percent of employment in the town. However, indirect effects only account for 1/10 of this amount. The author concludes that planners and politicians overemphasize the indirect economic impacts of tourism in the discussion of the role of tourism in regional and rural development. Given this, tourism development strategies should not be disconnected from the general economic planning of these areas.

Gazel, R. C. and R. K. Schwer. 1997. "Beyond Rock and Roll: The Economic Impact of the Grateful Dead on the Local Economy." Journal of Cultural Economics 21:41-55.

This study uses regional multipliers derived from an input-output model (RIMS II) to analyze the economic impact of Grateful Dead concert goers on the local of economy of Las Vegas. The authors apply a framework of analysis which closely resembles that proposed by Tyrell and Johnston (2001) and Crompton, Seokho and Shuster (2001). Using a variety of survey techniques at the concert, visitor and local residents attendance motivations and spending patterns were sampled. Using this data and multipliers (derived from RIMS II for the local county) total economic impacts are presented. However, this study reports total expenditures impacts rather than income impacts as advocated by Crompton, Seokho and Shuster.

Archer, B. H. and J. E. Fletcher. 1996. "The Economic Impact of Tourism in the Seychelles." Annals of Tourism Research 23(1):32-47.

This paper describes the results of a detailed study to analyze the impact made by 1991 tourism expenditure on incomes, employment, public sector revenue and the balance of payments in the Seychelles islands in the Indian Ocean. Using an input-output model that divided the Seychelles economy into 18 sectors the economic impact of visitors from international destinations was analyzed. The impacts were found to vary by visitor origin, and that higher spending visitors (who were also the most efficient in generating income and employment) originated in Germany, Switzerland, Italy, United Kingdom, Ireland and other European countries.

English, D. B. K., W. Kriesel, V. R. Leeworthy and P. C. Wiley. 1996. Economic Contribution of Recreation Visitors to the Florida Keys / Key West. Monroe County Tourist Development Council, National Oceanic and Atmospheric Administration, University of Georgia, U.S. Forest Service, The Nature Conservancy. Web Link.

This report analyses the impact of recreational use, by both residents and visitors, of the Florida Keys and Florida Bay on the economy of the local county and region. At the regional level the authors used a input-output model based on IMPLAN. However, at the county level it was determined that IMPLAN was overestimating the economic impacts and more simplistic wage-to-sales and wages-to-employment ratios were used to calculate economic impact. This paper provides a good layperson's description of the concept and process of input-output modeling.

Deller, S. C. 1995. "Economic Impact of Retirement Migration." Economic Development Quaterly 9:25-38.

This article used the regional economic modeling system, REMI, to analyze the economic impact of migrating retirees to the state of Maine. Through a hypothetical policy simulation, implicit economic multipliers are generated for use in policy analysis. A policy that would increase retirees migrating to Maine would have a substantial impact on the regional economy.

Parlett, G., J. E. Fletcher and C. Cooper. 1995. "The Impact of Tourism on the Old Town of Edinburgh." Tourism Management 16(5):355-360.

This study develops a mini input-output model to assess the economic impact of tourism on the Old Town of Edinburgh, Scotland. The simplified input-output model included only six economic sectors. While the economic impact of visitors in Old Town was significant, the authors not the economic impact of Old Town cannot be seen simply within Old Town itself, but as a tourist attraction in its own right it has significant impact on the broader region.

DiNoto, M. J. and L. H. Merk. 1993. "Small Economy Estimates of the Impact of the Arts." Journal of Cultural Economics 17:41-53.

The study uses data gathered from arts organizations across the State of Idaho and a regional input-output model (RIMS II) to estimate the economic impact of arts organizations. Art organizations are found to have a positive effect on gross state product. Arts organizations received 38.5% of their income from non-local sources while spending 56.7% of their total budgets locally. These results support the argument that the public budget realizes a net cash benefit from financially supporting the arts, but the quality of data do not allow for stronger conclusions on the magnitude of the internal rate of return to financially supporting the arts.

Johnson, R. L. 1993. "Tourism Impact Estimation." Annals of Tourism Research 20:279-288.

This paper tackles the challenge of estimating regional economic impacts by whitewater rafting on the Upper Klamath River in Oregon. In particular, the study looks to provide accurate estimates by 1) accounting for expenditures only in the specified region, 2) determining the percentage of multiple destination trips to the tourism resource, and 3) including only those local expenditures that represent import substitution. Using the IMPLAN input-output model output, income and employment impacts are estimated. A model that accounted for both import substitution by local users and non-local users who were on a multiple destination trip and would likely have recreated in the region anyway provided lower impact estimates than a model that disregarded both local substitution and the affect of multiple destination trips.

Liu, J. and V. Turgut. 1983. "The Economic Impact of Tourism in Metropolitan Victoria, B.C." Journal of Travel Research 22(Fall):8-15.

An early example of the application of Archer's (1976) regional input-output model to tourism research. A relatively low income multiplier was calculated, 0.65, which is consistent with other island economies where there are high leakages. Overnight visitors had a greater multiplier impact on income, while day trippers had a higher multiplier impact on employment. However, in total numbers overnight visitors generated 23 more jobs than day trippers. The authors list three policy policy implications of their study, which are all designed to limit leakages from the island economy as even small changes in leakage amounts can have large income impacts.

Back to Table of Contents