Economic impact analysis measures the income, earnings, and employment that the spending of a company, an event, or an project creates in the broader economy. Economic impact analysis recognizes that the impact of the spending of a company, an event, or an project extend beyond the impact of the spending itself. Purchases made from local suppliers and the hiring of local workers creates additional economic activity, earnings, and employment elsewhere in the economy. Economic impact analysis is a formalized approach to estimating these additional impacts. They would not have occurred if the original impacts had not occurred, which is the point that makes economic impact analysis legitimate. These activities also generate local and state tax impacts. Regionomics has developed models to estimate tax impacts as well.

Bill LaFayette, Ph.D., has completed more than 80 economic impact analyses over more than 15 years. These are undertaken for a variety of reasons. Public officials use to help determine the level of incentives to offer an economic development project. These estimates can also be used to illustrate the far-reaching impact of a company, industry, event, or activity, or advocate for the support of policymakers and the public for the project. Many of Regionomics’ economic impact analyses also include local and state tax revenue impacts.

Case Studies

Regionomics has completed economic impact studies for various confidential economic development projects, and also for the planned stadium for FC Cincinnati, Major League Soccer’s newest team. This study compared the economic and tax impacts of stadium construction and operation at two alternative Cincinnati sites and one in Newport, Kentucky. The results were used to rally support for construction in the community and among public officials.

The North Market has been a community institution in Columbus for more than 140 years. North Market management needed an estimate of the Market’s economic impact and the resulting tax revenues to the City of Columbus. Retailers and restaurants such as those in the Market are generally considered not to create an economic impact because most of their sales transfer dollars within the economy rather than bringing them in. However, we have argued for years that locally-owned, locally-serving businesses do create an economic impact by preventing dollars spent at chains from flowing out of the community to remote headquarters and suppliers. The resulting study demonstrated this impact.

A specific need for economic impact analysis has been created by the EB-5 (Employment-Based Fifth Preference Category) visa program. This program stimulates foreign direct investment by awarding work visas to foreign national who invest a minimum amount into a designated project that creates at least 10 direct and indirect jobs. Job creation is documented through an economic impact analysis that must meet specific regulatory requirements. Regionomics has completed three of these studies which have been accepted by the U.S. Citizenship and Immigration Services. One of these was for southern Ohio’s Lawrence Economic Development Corporation in their development of The Point industrial park, a facility taking advantage of a location adjacent to both the Ohio River and a major rail line from the Port of Norfolk. Two others were for a mixed-use development in downtown Columbus.