Economic impact analysis measures the effects that a business, project, policy, or other economic activity has on the economy. It models how spending from these activities ripples through the economy, creating additional economic activity and value. For this project, Strategen Consulting used the IMPLAN model to estimate the total economic impact for each electric cooperative in Oregon, calculating the effect that cooperative expenditures and activity have on the local community and throughout the state.
IMPLAN is an input-output model of the U.S. economy, which is used to calculate the impacts of economic activity. IMPLAN and other input-output models examine all of the industries in a local economy and estimate all of the ways that spending in 1 sector influences each of the other sectors in the area's economy. "Multipliers" are used to designate how much spending in 1 sector will affect another sector, and to calculate the added indirect and induced impacts throughout the economy.
The direct impact is the effect of cooperative spending, such as investment in new electric infrastructure or spending on operations and maintenance. The indirect impact is the effect that direct economic activity has on other industries, such as the suppliers of purchased goods and services. The induced impact reflects the effect of employees of direct and indirect businesses spending their income in the economy.
Gross State Product (GSP) is the total net value added to the state's production of goods and services from all industries, resulting from cooperative operations within the state. GSP is the state counterpart to Gross Domestic Product (GDP), which is used to measure net output at the national level. Likewise, local value added is a measure of gross local product.
Form 7 data (for distribution cooperatives) and Form 12 data (for G&Ts), detailing cooperative expenditures related to capital investment, operations, and maintenance activities, as well as the number of employees, payroll, and capital credits paid by distribution cooperatives to consumer-members, were provided by CFC under a confidentiality agreement with Strategen Consulting. These data were used as inputs into the IMPLAN model to estimate the economic impact.