Economic impacts are effects on the level of economic activity in a given area. They
may be viewed in terms of: (1) business output (or sales volume), (2) value added (or
gross regional product), (3) wealth (including property values), (4) personal income
(including wages), or (5) jobs. Any of these measures can be an indicator of improvement
in the economic well-being of area residents, which is usually the major goal of
economic development efforts.
The net economic impact is usually viewed as the expansion or contraction of an area's
economy, resulting from changes in (i.e., opening, closing, expansion or contraction
of) a facility, project or program. Sometimes there is also interest in assessing the
economic impact of an already existing facility or project. This is usually viewed in
terms of the jobs, income and/or business sales that are directly or indirectly supported
by the facility or project. Such measures actually represent the gross effect -- i.e., the
facility's or project's role in (or contribution to) the area economy. That is not
necessarily the same as the net impact, particularly if other activities would be expected
to enter or expand in the absence of this facility or project.
Economic impacts are different from the valuation of individual user benefits of a
particular facility or service, and they are also different from broader social impacts.
The user benefits and social impacts may include the valuation of changes in amenity
or quality of life factors (such as health, safety, recreation, air or noise quality). Yet
while these various types of benefits and impacts may be valued in economic (money)
terms, through studies of individuals' or society's "willingness to pay" for improving
them, they are not economic impacts (as defined above) except insofar as they also
affect an area's level of economic activity.