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be leakages. With each round of spending a portion usually leaks outside the local <br />economy. Leakages from successive rounds of spending eventually taper further <br />rounds of responding to zero. The larger the region, the more intricate the economic <br />linkages and, accordingly, the greater the total local impact from a given direct <br />expenditure. <br />There is, -therefore, a multiplicative effect af a given direct impact, which results in <br />greater total impacts. This so-caU-ed multiplier reflects the extent to which the initial <br />expenditures ·recirculate through a local economy. The multiplier shows the relationship <br />of direct impact to toial impact and depends upon both the degree of linkages among <br />the local industries and the extent of leakages. In a general sense, the multiplier can be <br />estimated by dividing the total impact by the direct impact. For example, if a total impact <br />of $1000 is comprised of $500 of direct impacts, $275 of indirect Impacts, and $225 of <br />induced impacts, the multiplier Is $1000/$500 or 2. In this example, each dollar of direct <br />impact creates a total Impact of $2. Note that the total impact includes the original dollar <br />of direct impact. To most accurately assess the multiplicative effect, estimates of the <br />· multiplier are often derived for each sector of the economy. To accomplish this task a <br />computer model of the local economy can simulate local economic interactions. <br />A number of economic impact analyses have been conducted for horse-related <br />activities. The primary element of impact analysis for horse parks .is the measurement <br />of direct benefits. These are based upon a set of measurements regarding the ~umber <br />of people for every horse on the grounds, the expenditures per person, and the <br />percentage of expenditures that originate outside of the region of analysis. This last <br />component ls included because, ~y the precepts of regional eoonomk:s, it is assumed <br />that only external dollars advance the local or regional economy, since expenditures <br />from locals would have occurred anyway, whet~er on horses or on other Items that <br />would cycle through the local economy. It is, accordingly, appropriate to review the <br />values of these spending patterns used in other impact analyses of horse _parks. A <br />35