Est impacts over 5 yrs with minimum info
How do I set up an analysis to determine the impacts of a new company that will be investing $100 million, will employ 200 people in the first year, and will employ an additional 500 people by year 5. No additional information is available.
With such limited information, is it best to conduct an Industry Change activity for each year using the appropriate industry sector and changing employment in Year 1 to 200, and then changing the employment figure to 125 (500/4) for years 2-4, and then aggregate the results?
That seems like a very simplistic approach to a complex investment ... will my results be defensible?
Thanks,
Lu
Was this post helpful?
-
You have the construction impact, which will be temporary. For a discussion of construction see the link: http://implan.com/v4/index.php?option=com_kunena&func=view&catid=84&id=9307&Itemid=35#9308 With minimal information, some analysts just plug the whole 100 mill into a new construction sector, but that will overestimate a true result. Why cumulate year 1-5? Impacts will occur each year from 5 and on for the life of the operation. It is simplistic, but you state up front that is all the info you have. If you can't get more detail (production, payroll) from the firm, you could try Google for similar operations.0
-
Let me clarify ... the company is investing $100 million, but there's no new construction. They're buying an existing building and the equipment within. Critics are concerned about the incentives provided to the company, so we'd like to provide numbers re the company's economic benefit to the community, and one of the "selling" points are the 500 jobs the company will be creating - thus the aggregation (or so I was thinking).0
-
K, then there is no economic activity in the purchase itself, unless there are real estate fees, financing fees, legal fees, etc. going to local professiongals. There is no harm in a cumulative impacts as long as it is clear: eg, $xxx Labor income and yyy man-years of labor over the first five years, and $xxx labor income and yyy employment for each year thereafter for the life of the project. or, an average of $xxx Labor income and yyy employment for the first five years (sum of cumulative/5), and $xxx labor income and yyy employment for each year there after for the life of the project.0
-
Okay ... that makes a little more sense. Just one more follow-up ... It was suggested that I use the total employment number (500) as a proxy for industry sales (someone looking over my shoulder at the Quick Start Guide). If I did it that way, wouldn't that suggest that all of the impacts would be realized in a single year - which would be incorrect ... again, why I'm thinking that I have to run the model for each year in which employment is being added - 200 the first year and 125 for each of the next four years, and then summing the results to indicate the new economic activity as a result of the jobs/new investment. Close? In general, the employment number is likely the only number I'll ever have to determine economic impacts - trying to make the best of it. Thanks for your time and patience.0
-
You would need to run separate scenarios for each of the 5 years. 100 jobs, 200 jobs, 300 job, 400 jobs and 500 jobs. (In constant $2010 the impacts are linear -200 jobs will give twice the impact of 100 jobs.) Yes, the software will use the study area output per worker to estimate the "Annual Sales" for you.0
-
Thank you ... have a great weekend! Lu0
Please sign in to leave a comment.
Comments
6 comments