Term | Definition |
Economic Base Analysis | Looks at basic and non-basic economic activities
To identify economic base industries, a location quotient is calculated for each industry
Total = basic + non-basic |
Basic Activities | Those that can be exported
Brings in money from outside |
Non-Basic Activities | Those that are locally oriented
Local/service, recirculates the outside money |
Location Quotient | Ratio of an industry's share of local employment divided by its share of the nation
< 1 indicates an importing economy
>1 indicates an exporting economy |
Shift-Share Analysis | Analyzes a local economy in comparison with a larger economy
Looks at differential, proportional shift and economic growth
Uses employment information by sector for two points in time |
Input-Output Analysis | Quantitative method that links suppliers and purchasers to determine the economic output of a region
Uses an economy's structure to determine the economy in the future
Analysis requires a very high quantity of data |
Depreciation | Allocating the cost of a tangible asset over its useful life |
Acquisition Cost | The cost that a company recognizes on its books for property or equipment after adjusting for discounts, incentives, closing costs, and other necessary expenditures |
Fair Market Value | Selling price for an item to which a buyer and seller can agree |
North American Industry Classification System (NAICS) | Standard used by the federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data about the US economy |
Data Sources | Census.gov (county business patterns & employment by sector)
bea.gov (bureau of economic analysis & regional economic data)
lehd.ces.census.gov/research (longitudinal employer - household dynamics & micro-data) |
Economic Analytical Methods Used in Planning | Economic base analysis
Location Quotient
Shift-share analysis
Input-Output Analysis Economic Models |
Main Principals of Economic Analysis | Follow money/jobs
Direct and Indirect Effects (multiplier analysis)
Economic Impact Analysis (cost-benefit analysis) |
Economic Base Multiplier | Multiplier = total/basic
The indirect effect of $1 additional basic (direct) activity on the economy |
General Equilibrium Model of an Economy (Leontieff) | Starts as a accounting device
Total population = intermediate production + final demand |
Input-Output Tables | Transaction tables = inter-industry flows (who buys from whom)
Technical Coefficients table = proportion of inputs |