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© 2008 Economic Impact Group, LLC
Economic Impact Analysis (EIA) is used to measure the cumulative effect of changes in spending within an economy. The explicit goal of EIA is to estimate the direct, indirect and induced impacts resulting from a change in economic conditions due to some economic stimulus. The direct benefits of a project are relatively easy to estimate and can be straightforwardly assigned to firms, households and government entities. Indirect benefits are more difficult to measure as they are often the result of unseen and unexplored linkages within the economy. When captured correctly they can provide further evidence of the economic impact of a project as well as reveal the accrual of benefits to unexpected parties. Typical indirect benefits include increased economic activity in related industries.
Finally, induced impacts result from increased household expenditure as households experience additional income from the initial stimulus. The continued cycle of these expenditure patterns create a multiplier effect that extends the local benefits well beyond the initial stimulus.
There are a number of EIA tools available to decision makers at differing levels of technical complexity and cost. Our economic professionals will work with you to pick the appropriate methodology to demonstrate the significance of your project and meet your budgetary requirements.
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