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V IMPACT ANALYSIS: METHODOLOGY, APPLICATION AND FINDINGS <br />Impact analysis ·;s commonly used in regional policy making to predict the economic <br />changes that result from a project. These changes, or impacts, are experienced as <br />increases or decreases in the magnitude of selected economic variables. <br />Employment, output, income, value added, and taxable sales are the most often used <br />impact variables. Project impacts may be estimated for a local, regional, state, or <br />national economy. <br />One purpose of this study is to estimate the impacts of the horse park operations upon <br />the state, and more importantly, upon the immediate regional economy. This chapter <br />explains the methods that we used to estimate total regional impacts that result from <br />the initial direct effects of the project. First we describe the general type$ of econon,lc <br />Impacts. Then we briefly explain the specific modeling techniques. <br />Types of Economic Impact <br />There are th _ree types of economic impacts. direct, indirect, and induced-each of which <br />captures one facet of change in regional economic activities. <br />Direct Impact§ <br />Direct impacts refer to the initial purchases within an economy that result from project <br />activities. OJrect impacts of the horse park include expenditures stemming from <br />construction. operations and maintenance. and from spending by event participants and <br />spectators. Examples include purchases of concrete for construction, purchases of <br />beddtng by the horse park, and expenditures for lodging by out-of~area participants. <br />Indira~ Impacts <br />33