Economic Analysis

Responsive Management typically conducts economic analysis using a multi-step process to estimate expenditures and their implications. Surveys are often used to determine total annual expenditures by category for each respondent. These totals are then divided by the number of participation days of the activity or behavior in question. Daily expenditure estimates are used to estimate expenditures for specific sub-segments of the study population based on demographic, psychographic, and travel characteristics.

In economic terms, the use and reuse of funds in the economy produces a multiplying effect. As monetary transactions are conducted over and over again, the value of a dollar has the potential to be multiplied many times as it moves through the economy from transaction to transaction. This multiplying effect is generated both directly by organizations purchasing goods and services and at a degree of separation by the employees of those organizations spending their paychecks. An additional benefit of the multiplier effect is seen in job creation to provide the goods and services being purchased. This multiplier effect applies to all economic activity by all organizations and individuals, whether that activity takes place in the for-profit, nonprofit, or governmental sectors.

Typical economic analysis accounts for three elements of potential impacts:

The summation of direct, indirect and induced impacts produces total economic output and is expressed as a multiplier that is applied to retail sales associated with an activity, program, or project. Federal and state tax revenues are also examined.