Economic and Fiscal Impact Analysis

Over the last several decades various New Mexico industry leaders, communities, and local governments have contracted with BBER to provide Economic Impact Analysis (EIA) studies. These studies provide quantitative information to help clients assess the economic importance and impact of a given industry, a single employer, a particular fiscal policy, or a given event on the state and local economies. Specifically, BBER EIA studies measure the changes in the economy resulting from the start of a company, a new project or event, the expansion of an existing entity, or the closing of a business. These changes are measured in terms of jobs, income, value added, and the economic output. For example, when a business starts operating in a region, creates new job, disburses money to pay its employees, buys goods and services from other local employers and it sells products for export and consumption on the local market. The impact of the new business is multiplicative in that this new economic activity causes the sales and employment of its suppliers to increase while and boosts the compensation of those employed by the local suppliers. In other words, this new business can create a positive chain-effect in a regional economy, thus the total impact is much larger. This effect is called the economic multiplier. As an example, if the employment multiplier of a company is 2X. This means that for every job the company creates directly, the economic activity generated by the business creates one additional job.

Economic impact studies are important for several reasons. First, EIA studies measure how important an individual business or a particular project is in the broader economy. Ultimately, this helps analysts assess and understand the bigger picture of the overall economy. Second, EIA studies measure indirect and induced impacts of the project in question by analyzing economy-wide interconnections among industries, government, and households. Third, EIA studies can provide public and private entities with key data for deciding which projects should be completed. With the same level of investment, two projects may have different total impacts. Fourth, EIA informs and educates stakeholders about how the project in question is important for an economy.

BBER has conducted economic impact analyses for many entities and programs in New Mexico. Past EIA clients and projects include:

  • Albuquerque Airport System,
  • University of New Mexico,
  • Los Alamos National Laboratories,
  • Air Force Research Laboratory,
  • University of New Mexico Health Sciences Center,
  • Doña Ana Community College,
  • Arts and Cultural Industries in Albuquerque and Bernalillo County,
  • Medicaid expansion initiative,
  • Federal American Recovery and Reinvestment Act Stimulus Funding.

The full EIA studies are available on the BBER website.  For more information on this and related research, contact Dr. Jeffrey Mitchell.

UNM Bureau of Business and Economic Research • Onate Hall at The University of New Mexico
303 Girard Blvd. NE, Suite 116; Albuquerque, NM 87106 • 505.277.2216 Main • 505.277.6626 Data Bank