Income multipliers for community impact analyses —what size is reasonable?

Publisher Website
Google Scholar
Abstract
A personal income multiplier is extremely useful in community impact analyses. When community income increases (decreases), the total impact will be some multiple of the original change. So it can be estimated by multiplying the income change by the multiplier. The multipliers used in impact studies are often derived with short‐cut techniques and presented with little explanation of how they were constructed. To improve the ability of community development practitioners to evaluate economic impact statements and to estimate multipliers, insight is needed into the question of reasonable income‐multiplier size. This article demonstrates that community personal income multipliers are likely to be larger than 1.05 and less than 2.50. The multiplier for a small to medium size community is more likely to be within the range of 1.10 to 1.50. A community income multiplier over 2.50 should be critically evaluated. It should not be accepted for impact analyses without a convincing explanation of why it is that large.

This publication has 4 references indexed in Scilit: