Document Type

Working Paper

Publication Date

2012

Document Number

Working Paper 2012-02

Abstract

Local and regional practitioners commonly use the economic (export) base multiplier in project assessments. However, dependable estimates of the regional multiplier require that the division of total activity into its export (basic) and local (nonbasic) components be accurate across all industries – especially in the dominant ones. This paper compares the activity divisions that are generated by a shortcut approach, calibrated by the Arizona Community Data Set, with those generated by the widely used IMPLAN input-output model. the comparison is made over 577 micropolitan U.S. countries (all are nonmetropolitan) in the year 2000. Although the two approaches are methodologically dissimilar they generate comparable estimates of economic base multipliers. Moreover, other important regional attributes, like human capital and specialization, affect the alternative multiplier estimates in a similar way.

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