Hi, I am performing an economic impact analysis for a proposed new residential building in a downtown urban core. I think the simplest proxy for the economic activity that will result from the project's ongoing operations (i.e., excluding construction) is annual household expenditures from new residents. For the sake of argument, let's assume that all of the future residents are in-movers to the urban economy--that is, that their spending is "net-new" economic activity. Let's also assume that their average household income will be $120,000. I approached this analysis in two ways: 1. Using CES data, I developed assumptions for annual household expenditures by sector. I entered that spending by sector on a per-household basis as Industry Changes. This results in Direct, Indirect, and Induced effects. 2. I entered the new households as a separate Household Income Change activity, with one event: $120,000 Household Income Change in the Households 100-150k sector. This results only in Induced effects. This makes sense to me; the model doesn't know if the $120,000 is one new wage earner, or 12 existing employees receiving $10,000 raises. Quite frankly, I'm not sure if either of these approaches makes sense, or if they do, which one carries more validity. I'm hoping for a little guidance on how to approach this analysis. Thanks!
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