ESTIMATING TtiE REGIONIIL ECOit'O:dIC SIGNIFICANCE OF A1RFORTS
Steviari E. Outler Ecoiloiiiic Analysi s Division \lolp? National Trailsportation Systcins Center
Lt>iircnceJ. Kiernail National Planning Divisicn ' Fedel-a1 Aviation Adii~inis1.raiiorl Preface
Ciiapter 1 - Introduction
1.1 Furpose 1.2 A ' lieI4east1rcs 1.3 Applications
Chaplsr 2 - Benefits
Catc-gorics of Benniiis Transportation Kencfit Rules of T1it111:b Effect of !ncreas~dActivity Reduced Delays Cor;,:ilc~ni iy 6erii;ii t 5 Stimulation of Busin~ss Access to th; National Lirport Syste111 Recreat i on Commerciai Activities
Chapter 3 - Economic Impacts
3.1 Dofi ni Lions of Ecor>o~iiicII;!;)?c~s 3.2 r e i Esiiil:ztes
Chapter 4 - Preparation of an Ecorlo;ijic !mp:ct Assess!~ient
Chapter 5 - Surniaary
Appendices 8 Oe~-i%:atio~~of Iehl? 3-1 for Estiinating Expenditures p?r Visitor
C Est ir~atingECOI~U;;I~C I!~![)acts Usirg th~ R!I-1S 1I 1~1~11tipli~rs
References .Lis:?. of Tables
Paae
2-1 Transportation Beneii t Variables
2-2 Approxiniate Denciiis for Various Activity Lev~ls
3 - 1 Expendi turer, psr \:'isi tor
3-2 ~lpproximataimpacts for Yari cus Activity tcvels
4-1 Iipproximatc Genefi ts ant1 linpzcis for \/arious Acti vi ty Levels 36
1'4- 1 Airports with riior!? than 1 ilil lion Passengers 11-3
U- 1 Original Data Set B- I
8-2 Final Form of the Data Set 3-2
6-3 Expenditures per Visitor, !907=100 8-3
B-4 Expenditures per Visitor, 1991=!00 fj-4
C- 1 Aviation RIWS II Code Numbers C-3 Fic~ureNo. -.--Paoe
2-1 Transportation Benefit of an Airport 5
A- 1 Ai rports with 1-iore than On? 14i 11ion Passengers A-2 PREFACE
This docu~iient is a revision of oui i096 report, tsleasui-ino the
Regi.0~31~ Economni c Si(111ifi cance of Ai roorts, Report No. COTIFAAIPPI87-1. The car1 ifr report was prepared in response to requests fro111tiie airport conii~iunity for FAA guidelines for esti~natirignleasures of tile importance of indivitlual airports to thci r surrounding co~i~niuniti es. Like the 1896 report, tile present c!ocum.nt was v:ritten priniari 1y for airport managers arid pl anncrs whose budget and/or time constraints require that ir:~pact analyses Os conducted ill house, rattier than by a consultant. For this reason, our ouidelincs were prepared with saall- and mediunl-sized !)ablic use airports in e~ind.
-I lie ycneral orgatiiz?t ion of the presetit docuiri~t;t renair;~based on thr tiistinction betv:e~.li ti-i.nsportation benefit zr;d economic ic~~act. 'I'h? ~iialcrial in Chzpter 3, i;o~;;ever, is no:.: prcscnted iri tco separate chapters, one on dcfini tions of econoo:ic i~~ipactand itip cclcul~lionof prelimin~ryesti~iintes and one on th? preparation of a mot.? tletai 1ed econoliii c impact: assessnEnL.
Throc~gtioutthe report, data to be used irl the rule-of-Liiu~nb esti~lrationof transportation benefit ant1 economic iliipact have been ~rpilated. In addition, in Cha!)t:er 3 there is a ne+i: section on tlie esti~nationof i11di1.e~:impacts, bascd or1 a region's populatio!) 2nd origiii-destinaticn traffic. Also, the earl iel- trcalilie!it of induce6 impacts, i .e., regional niultiplie~'~,has ken refined to lake the sire of the region's population inic account.
[he au~horsare grateful to tiie marly users of tlie !9g6 i-ei~ortfor ttieir comments and suggsstions. !lc owe special iiianks to Robel-t J.
Zi~elsdorfof \k!i lf)l~rSmi tii Associates, wlio provided us vii Lh data or1 iircarid i riduced impacts. The United States has the sorld's riiost extensive airport sysierii. Ti~csystem is essential to riatiorla1 transportation, arid there is a l'rge Federal investmerlt in it. However, most public airports are owned and operated by units of local government.
Pub1 i c ai I-ports must compete for furids with othcr ~~ovcl.!i~i~c~ittil - activities. they 2re scrutinized during bvdyet preparation and may b? ihe subject of public debate, particularly iT rilajor iinprovenie~its or IEW constri~ctionarc ariticipated. They may eveti be ihe target of proposed restrictions aimed at limiting aircraft noise levels. in such instances, the future of an airport is c!eterniined pririi;ri ly throwjt~the local pol i iicai process.
I1 is important that tlie public and their. repr~ser~tatives appreciate the econoritic significance of airports if they are to !:oniinue to support theiil. This report is desigrled to zssist analyses of the economic importanc~of airports. It is not intended for use in iinancial feasibility studies or cost/benefil analyses. Rather, it provides informaiiort ltlat the average ci lizetl iliay find useful i;'iicn the current and future t-ole of an airport is bcing discussed.
'[he report is directed to a \vide audience kii th val'ying levels oi sopl~isticaLionin the field of ecotioinics. One objective is to encourage a standard approach to the measurc?nrent of thc ecor\o~riic sicj~iificarlccor airports. l'he report includes a urli Toria set of definitions, illustrations of ttlc II~OS~useful cnalytical techniques, and descriptions of the conditions urider whicii tliey at-e niost appropriately applied. Gerier-a1 ~ircthodologiesarc ~11:phasized rather than specific it~struciions. Thc procedures descri lied in the rcpot-1. can be used to evaluitie the ecorlori~ic significatlce of an r-xisti~igor pl-c;poscd airpol.t or to study tlie cor.sci{rlences of irici-eesed iictivity at ;ti airport. The two nail3 indicators that lllay be measured arid ci ted as eviti?nce OF an airport's importance arc its ?conoa~ic inipaci and its I.rcrisportation bencfit. Ecorloillic inipact is the regional econoi:~ic activi ty, cmployi~~ent,aritl payl-011 that can be attributed, directly and indirectly, to the operation of a local airport. It describes the in~portanceof aviation as an industry. Benefit is the scrvicc that a local airport makes available to the surrounding area. The services e~~ipliasizedill this report are tinie saved and cost avoided by travelers, but benefits also include other advantages, such as i~~ijjrovecltransportation safety anti comfort. Benefits are a rileasurc of the iniproved transportation that the ai ]-port pl:ovid", and thus reflect the primary motive of a coil:l;urii ty in op'.r~.tina a pub1 ic airport.
ProiiL, or the difierencc beti.:eeri i~lcoilleand costs, is a valid ~j~easureoi the viability of ii PI-ivate business. iio\.iever, pubi ic airports are ynerally operated as pub1 ic utilities, with provisiori - of scl-vice ~*atlierthan profit as tlie pl'iliiary motive. tiu us profit is riot partic~~larlyrelevant to (.he r~gionalecono11:ic sigtii ricarice of an airport. Financial feasibility, or the ability of an airport to pay its bills, is a relaied subject that is usually considered IS parl: of tile overall plannincj for a pub1 ic airpor.t. Tliis report does not include guida~iceon lioiv to determine tile financial feasi bi 1 ity of an airport.
Inionn~tior~about tlic cconoi:~ic significance of airports lias a xide variety of uses. It is an ii~iportantelement in airport niastel- plans arid system plzns, 1)ccause it helps to describe tli? basis for arid consequences of tlie cievelopment of airports and tile public involvement in tiielil. Tlie pub1 ic is wore 1 i kely to suppol't ai I-~OI-~S when they are awar-e of tl:e stlbstaritial positive effects 011 thc su~.ro~indiiigarea. Economic impact slid beneiit data can b? us~ful in evaluating tl~ceffects of proposcd airport use I-estl'ictioris. 8e::eii 1 dala can bc- co~:!bined with inconc PI-ojeciions to lielp detcrinirie tile viatii 1 i ty of airpart dc-velop~ii?niproposd s. iiri;ilysts should consider :he ir1lend.d spplication of tlizir work its probabl e audience arid design thri I~ analgsi s accordi~igiy. 7reliminary calculations derived froill rules of ttlui~ib provid? "ball- park" measures of an ai r])oriis signi iicarice arid are appropriate orlly v;hcn quick-response information is required i~ritlprecision is not ccscntial. More detailed analytical techniqcies, wliicll require more tirue and liloriey to perfoi-in, are appropriate v:lien a more precise esti~uateis ncedetl. Detailed arialyses may be used to sc!pport major investment decisions or as input into debates of a technical natt~re.
?, freque~itflay: ill econorl~ic impact analysis is preseniation of the resul ts ill a for~iithat the cvo'age rn?mber of tlie audience firids boring or i~ninformative. 'I'll? purpose of the study is usually lo gain pub1 ic untlerstatidi r~gant! support, and ihe final report sliculd be desigi~etlui.itii this in niirid. k balance siiould bs rnaintain~d betxcn the effort in [)repari~:gan i.nz.lysis and the cifori in di sseii~inaiing th? results.
The fol 1ov:ing suctions provide guidance on both simple rul c-s of thur:\j and wore sophi sticatctl arialytical techniques. Chapter 2 pres2nts a ~i:etliodology for the developracrit of measur-es of transportatio~ibenefit. Chapter 3 offcrs suggestio~isfor est ilnatil~geconon~ic illipacts by meznc of some statistical rules of thunib, anti Ctiagtef- 4 outli~iesa basic approach for coriducti~iga coii~preiiensivcecor!oirii~ assessraent. A brief su.m.t-y is presented in Clizpt~r5. 2.1 Catecrories of public-Kenefit
Benefits are the services that a coi~!~i~utiityhopes to obtain by developing and mai ritaining an airport. 'They differ froin cconoi~iic irnpact, which is described in Ctiapter 3. Airports l)rovide a variety of public benefits to the surrounding service al-c-as. The lilost substantial of iliese arc the tiriie saved and cost avoided by using sir transportatioti. Thcse transportation benefits can b? expressed iri dollars, using the techrlique describcci in this chapter. Other benefits include tlic high levels of safety, coinfot-t arid con~~er~ienceof aviation, the access that an sirport provides to the national airport sysLe!:i, and e~iiiariccncntsto cornl~iunity well- tjcing. Tliese benefits cannot be expressed in dollars, but they can be explained and demonstrated by examples. In the case of relievei. airports in ~iictropolitanareas, a reduction in tlel?ys at airline airpor'is can be cited atid cluatitified.
2.2 Transgorta-ti-on. Eetief i t
'ihe primary benefits of an airporl are usually the time saved and cost avoided by travelers wlio use it over the next best a1 izrnative. Tile i01 lowing procerlurc measures the value of tirl~c saved and cost avoided by travelers as a result of an airport located at point A (see Figure 2-1). Tile neari'st-cl ternative airport is located 21 C, c farther distance fi.o~ir the point 0 where ths trip ori ginalcs. Individuals ant to travel from O to B. Ttie tinie saved by using airport A is itie cliffercncc !jet\.ieen the time for the 0-C-I3 trill and the time for ttie aiore direct 0-A-.B trip. - I he benefit is the tiirie savcd pel- trip tinies ttie ~iur~il)cl'of 1;assenger trips, all inultiplicd by the value of the passengers' time. Ttlere is also a benefit as a resull or reduced rjround travel costs, since airport A is closer to the origin of trips than airport C. There could be acidiliorial bcricfits if tlie flight clistaiicc x ~icl-csl~orler than tile alternative flight dist2::ce y. In the esanples below, it is assuiilcd fo~'th? sak? oi siniplici ty that the flight distsnces are equal.
FIGURE 2-1 TRAb:SPORTATIOi$ BENEFIT OF AN AIRTORT
Tile var Annu61 Passprig?~-s= FGN t Y 0-C-5 tiaie = b/P + y/S 0-A-8 time = d/P .I. x/S Annual Benefit - E(FGN Y) (b/? + y/S - x/S - d/P) TABLE 2-1 TRANSPORTATION BEJdEFIT VARIABLES Typical Svnbol Variabl E.S Valve (Use actual data when availab)?.) G I ti neranl c(!eralions pcr bascd ai rci-aft 300 per year (1) N NumSci- of Oascd aircraft at airport A varies d Gl-our:d access distalice to airport Ii vari es (mil cs) E Passenger time value ($/hour) (2) 30 F Kumber of passetigers pel' trip pel- general aviation aircraft (3) P Car speed (a.p.h.) 4 5 (1 Car costs, including 6m~rtiz?tiofi (t5/iiti1 c) (4) h Grorlnd access t1isti:nce to iil ternativt! . varies sirpori C (ii~iles) Y /~onual passer:g?r-s in commercial service varies Three addi tioi~alvaria!,les are needed when of the aiiernative ail-port substanlially changes flight distancc, i.e. x : y. x Direct flight distance f~.oniorigin vari es airport A lo desti~iacior~airport 13 Y Alternative airport C to destination varies airport 5 flight distance 5 General aviation or regional airline varies aircrait speed (m.p.h.) (i) An operation is either a latiding or 1'. takeoff. Aircraft based at airports with air traffic control towers averaged 302 itinerant operations in 1985. (2) There is no source of precise data on the value of passenser tiliic, The FAA uses $30 per hour for estir~iatirlg the value of aircraft owners' and pi lots' time for internal reporting purposes. The Aircraft Ou~ners and Pi lots Associatio~l(AOPA) reports tlial the average annual iricor~in of its nentbers r.2~ $62,800 in 1990, which equztes to 530.19 per hour. The FAA used $29.60 per hour as zn cstiioate of the value of dotiiestic airline passenger time in 1990 for co!iip:~tinq the cost of air traffic dcl ays. (3) The average number of passengers per trip varies viitli aircrafi iype and is 1.4 for single engine piston aircraft with 3 seats or less, 2.4 for single engine piston zircraft with 4 seats or illore, and 3.0 for multi-engine pistori ai rcraft . See Reference (9). (4) 'Tile A1112rici;nkutonobi 1 e Association rc-ports that a rnediun- sized automobile driven 15,000 milcs a year costs $0.393 per mile to operate in 1992. R~di~cedGroutid Travel C-ost. Annual Ground Trips = GN t Y1 0-C-8 trip costs = Q 11 0-A-B trip costs = Qd Annual Berlefi t = (GN + Y) (Qb - Qd) Total Gcnefit \*!here x = y, Total Annual Beriefil = E(FGN + Y)(b/P - d/F) + (GW + Y)(QS - Qd) The transportation benefits fro~ilsa~nple airports vtitli varioil: activity levels are illustraled in Tahlc 2-2. 2.3 Rules of 'rhumb The transportation bencfi ts dcperid on sevcral variabl cs, j)articulirly the addi tional grour~d travel involved in reaching an alternative airport. \,Illen that ground travel (b - d) is 20 wiles, and tlie other variables are as st~owriin Table 2-1, the annual t~enefitfroin ihe airport is $12,330 per bzsed aircraft plus $2i.!2 pc-r passenger enplaned or dcplanetf in co~ni~i~rcialscrvicc. A proportionate adjustment sliould be tilade to the benefits if tlie additional grourld travel (b - d) ,is not equal to 20 o~iles. For instance, if b - d is equal to 10 miles, the benefits would be oniy half as great, or $6,165 p". based aircraft and $10.56 per commercial passenger. If b - d is equal to 40 wiles, the benefits would be twice as great, or 5211,660 per based aircraft aid $42.24 per passenger in com:~iercial service. These figures can be used as 'G!r, the nunber of cinni.ia1 itinerant G?, operations, is cqual to the nurr,ber of GX-related ground trip?; r,ll t.lir: ;issui:;ption tnzt passcngcrs nakiny e Gh trip together arc acqudintcd and will ::!iarti one automobile in travclliny hc';i.!cen the tx-ip origin and the icirpnrt. Y, the number of annuel ca:r,acl-cii.? p,?sserigsr-s, e:ju'?ls the 1inmbc.r o; cjr:c;und tl:i~!,r. rclatcd to conmfrcial service on thr? ass;l:.:ption thzt 2;lr.h cozcer-cia1 pa:;L;c'riqcr. i.3 tl:;lirellitq a Jonc and requires a scp~rntcfiaCor vc!iicl e. APPROXIl~lATE EEKEFITS FOR VAKlOUS ACTIVITY LEVELS I - d: Annual Rec!uction in Valuc Reduction iota1 Annual Based Co~;::i~crci a 1 Distance to of iirnc in Travel 'rranspor-taL.ioc~ Ai rcrafi Passengers (1) Air'l)orL (2) Saved Cost Eencfi t (1) Includes oiily origiii and d~stinationtraffic; does not iliciude t!irouyh or transfer pcssengers. (2) Hiyhia/ay ~i~ilcagc rn?asu~'ed fro~i~the point v:here tl-ips beyit? ot' fnd, typically the traveler'c i'esidcnce or piace of busit:e.s. a ruie of thumb to estimate the transportation benefiis of an zirpol-t. For example, an airport beirig studied has 25 based aircr?.ft, arid a I-cgional ail'lir~eserved 6,000 passengers at the airport in the - preceding year. ~hcncarest alternative airport is 20 higheay miles farther fron the area served by the airport under study. The total annual transportatioll be~iefit froni thp airport is 25 aircrzft ti~iies512,330 per ail-craft plus 6,000 passengers times $21 .!2 per passenger, or $434,970. An analysis can be used to determilie the additional b2tiefits tliat :.ti 11 result froin increased activity at an airport. The iricreased activity slay be the result of gradual g~-owttiin tlls dsni~nd for air trans{)or.tation (passenger enplanen~entsin the U.S. are forecast to increase at a rate of 4.0 percent per anlium from 1991 thru 2003):, or it r113y occur rapidly as the result of an improvement to the airport or the introduction of new service. \*Illen the expected rlumber of additional based aircraft arid coin:~~ercialpassengers is knotit~i, the anzlytical technique or rule of thtjl~ih described in the preceding sections can be used to estitnatc! tile iricrcascd bcri~fi1. This inforri~ationrliay be used to evaluate proposals to improvc cn airport or restrict airport growth. 2.5 Reduced Delavs A general aviatiori air.port in a ~uetropolitanarea inay bt' designateti a re1 icver airport l)y tlie Fctleral Aviation kdministt-ztion. 11) addition to providing acccss to the surrounding area, the airport relieves corigcstion at a busy air1 ir~eairport by providing general aviztion aircraft with an zttractire alterri?tive landin? area. For instance, Teterboro Airport in New Jersey is a rslievsr for Neeal-k Airport, serving over 409 aircraft that inigli; otherwise land ai Keviark and add to congestion thcrc. The value of delay reriuction resul ling frori~a re1 iever 5irport can be coillp:~ted by estinlaiing tile anoutit of traffic that would be added to the air carrier airport if the reliever WerE not availal~lc.arid then using an airport cc?pacity inodei to compute annual dclays before and after this traffic is added. For calendar year 1987, variable operating cost (creiv, fuel, maintenance) averaged $!,465.00 per airborne hour for an air carrier aircraft plus $26.20 per passenger hour. 3 Aircraft delays increase expori~ntiallyas traffic is added to a congested airport, so the benefits of an effective reliever airport arc usually quite large, and may be ~ilzasuredin mi? lions of do1 lars. Sonn beneficial iispecis of airports 2,-e signi fic21it but difficult to ai~antify. For example, jirports contribute to the prom;)t diagnosis and treatment of disease. Blcod and tissue samples are sent by air lo rnzdical facilities for analysis; isotopes, serum and anti toxin that cannot be stored locally are shipped by air \.;henever arid wherever they are needed; organs for tr.ansplarit operations are sliipped by air; ar~dpatients oftell travel by air for dialysis anti other tt-eatment not availabls in their co~i~rnuriity. A fiunibcr of high schoois, colicges and universities liave aviation programs, and illany offer dearees in iliese subjects. Tlie progr6as are designed to train young people for careers in aviation. Gencral aviation is a nlajor training ground fo~'tile airlir~i!pilots oT tonorrow. Such vocatiorls lilay bz conceived znd nurtured at the local public airport. Airports are vital civil defense facilities. They are extrenely durable, and aviation is a key source of relief from natural disasters such as floods arid cartiiqul?l:es. They also support pol ice, Civil Air Patrol, arid National Guard activities and inay be used by aircraft involved in pipcline patrol, detection of fucl and cheiriical spil Is, and foresi iire detxction and suppression. !ile it is usually not !)ossible lo pr.edicl such uses or io exprsss them in dollars, they car] be i i lustrated by rcferefices to spccific instances in which the local oirport, or orie iri the ycner.ai area, was used in arl elirergcncy. Anecdotal evide~tcearid sulirxaries of case studies can add a new diniension to discussioris of airport belief i is. 2.7 Stitr,ulatio~iof Business kviatiort is an esserttial for111of business transportation, and it has helped to shape tlie size end structure of inany m~jor corporations. The presence of an airport and the types of service it provides are illlportarl: considerations in :tic siting of business and industrial facilities. Large airports arc magnets for warchousir~,distribution ccnters, office parks, hotels, and other development. Smaller airports help to attract industry to Sll!rill- and medium-sized co~nunities, thnugli they ml~stwork in concert rri th other- factors such as the availajility of a market, raw ~~iaterials, labor, utilities, favorable treatment by local governmlnt, low taxes, co~iiiilirtiiiy ai~cnities, arid si tes that are econo~ilical to develop. As an iaiportani part of a rural area's transpnrtatian network, an airport is a Factor iri fosterirlg t)usiness, 2.0 P.czs> to the N:3tiorial Air.rjort: Systenr State and local agencies, workil~gwith the Federcl goverriineri:, h:?ve provided the United States vtitti tlie world's nlost exterisive and b:?st equipped airport system. These airporls acc01a:riodate aboui 40 percent of the coi~i:~iel-cis1trafiic in tlre world,, and 60 percent of the general aviatio~itraf;ic. I: is tfirougfi the local airport that En area gains access to this important national resource. 2.9 Recrestion kbout 50 percent of travel on cor;i:nercial ai rl irlcs arid about 30 percent of general aviation trips are for recreation or vacation. Tlis recreational uses of grncl-a1 aviation iriclutle sailplening, sky-diving, flying tiow built aircraft, and local sightsceinq. Thcsi. arc 211 iil~portr?ntsourcc of r.ecrr?ation and entel-tainiiient arid ?Is0 pr~vid?reverlues that .Ilelp to defray the ccis t of dcvelcping and op-rillinjl airports. There is a variety of coe~iercialactivi lies ilivolving aviation above and beyond the carriage of passmgers. Air cargo accounts for several distinct businesses, including air fr-ciglit ar:d express del ivery or sr~lall parcels, {.:any higll-value goods are slri ppcd by air, and even relztively low-value, heavy goods, such as automobile parts, are ofLen shipped by air to niir~ic~iizeinventory and v:areliousi ng costs. General aviation ai rcraf; are used for such con::nercial activi lies as agricultural applications (e.g., crop dustin?), pipeline and ulility line patrols, tr*ansportation of ch~cksand recol-ds of cornnli.rcia1 lransactions, and on-deilrancf air taxi and charicr services. Econorlic ilripacts rireasurc the importa~lceof a\~iationas an industry, in Cer-111sof the ni~ploy~irentit prosiacs and the goods and services it consuines. )!hi]? the benciits described iri Clizpter 2 arc the pri~ilary~~iotive for airport development, econoilli c ii~ipactszre benefi cia1 results that help to generate and sustai rl pub1 ic support for airports. The iol lowiriy tiefirlitions cover virtually evcl-y type of ccononic impact applicable to airports: 3irect-.....- -. irnr!&-. are consequ?nces of FCO~~O~I~~Cactivities carrietl out at the ai rport by ai 1-1i~ies,ai t.pori liianageilierlt, fixed base ope!-ators, and oihel- ten3nts v~ithz direct involve~ilelit in aviatioti. Cmpl oying labor, purchasing local 1y-produced goods and services, and corilraciir~yfor airport constritction ~.ndczpital imp~'oveilifr:Cs are exarilples of airpot-t aclivi tics that ypncrate direct inipacts. So(;ic direct impacts, 1 i k? airport ei1!1)loy11re1it,OCCU~ on si tc; others, like local production of goods and services for use at ihe airport, may occur off site. -,rrle disti11guishi1:g feaiut-e oi a direct i~npactis that it is all 1nii:ediate consequence of airport cconomi c activity. Strictly speaking, direct ili~p~ctssIlou1:I I-ep~.eseiiteconoi~iic activities that would noi have occurred in the absence of the ai~'po~'i.If ii were deteririi~led that, \ri thout the airport, soii~con- site el!lployees would be doing co~nparablework elscv~hereit1 thc regio~l\.riCliou; ciisplacin: olher workei.~, thfir c.iliployinent should not bc part of the airport's contribution to local cconcinic activity. This would be significant in a rqioti wit11 full or near- iul 1 eniploy~sent,\:.here ai rport employnie~:t niiyllt draw v:nt.ker-s away from other employe?-s in the region, wiio tlien hsvc to operate tlieir I,usinesses i.i th less l2bar- than they viould otiic.ririsc ernplop. A similar problem is poscii by the possibil i tp tnst, in t.he 2bs~nceof the ai rpor-t, the rqior~~i:iy!~t i~?ve cievelopcd a1iei-native iiiodes of coli!ii!ori car'rict. tranr;portatio:, more extencively and tl~uscreated eln?loy~n?nt opportunities for workers no;,: c-mployed at thc airport. As a practical matter, ho!ever, it will rarely be cost effective to develop a base-case scenario that depicts the economy of the region wi tliout the airport. -rhc time atla resoiirces required for this exercise wi 11 seldola warrant the rest11tirig ir~~provenientin the est i~i~atcsof c~:rployrnent, payroll , and cxpendi ture irrl;)acts, Expendi turcs by ai rl ines, fixed bascd operalors, anti tenants generate direct impacts, but only those that induce basilless activity are relevant for 2 rcgional econoinic asscssm?nt. For this reason, it is inlportani to distinguish between (a) the local value- added component of expenditui-es and (1)) thc. regional innport coil!porlf~it. Thus, airline expendi turi-s ari fils1 gensrate local fu.1 storaye and distribution services and the importation of fuel into tile regi~n. in alost parts of tli? country, only the forilier component is relevant for the analysis. Sii:iiiar considerations apply to :he expenditures of gift stlops, restaurants, and otlicr ai rport busi~iessesthat purcliase regional irs!lorts for resale. They may apply as well to airport constriiction and capital improvements. 11ldireci irtlpacts derive prilnarily from off-si te economic activities that are altribuiable LO the airport. These activities include sei-vices provided by travel- agencies, hotels, !*eSi.auriir!ts, and retai 1 estabi isi~lllnnts. I hesf enterprises, l ike airport businesses, miploy 1abor, purcllase local 1 y produced oootls arid servi ccs, and insest in capital expansion and i~iiproveraents.. indirect impacts differ :roll: direct inpacts ir~Lila1 they uriyiriate cnti rely off site. The sarrle c?.veats regat-dirig rcgionzl irsports apply. Like direct impacts, indirect impacts should theoretically repvesent econoiilic act.ivities tl:ai would not have occurt-ed in the absence of 1/12 airport. For this t~eason, it would be desirable to distinguish b?t:.e?n tourists (n~dotlier visitot-S) v!110 woilld 1101 have travelled to the I-egion if th?re v!wc rno airport 2nd itios? v:ho ~;;oul(l have co~;l? sny;;'ay by r.orne other iorai of ti-aricparLal-ion. Or11y he ior:lier are real 1:) r?l>~tii for the esii~~iatiorioi ir~direct i~pacts. Unfcrtunatelg, it is seldom feasible to mak? this distinction. As a result, tt,e impscts of expenditures oi toiirists and ottier visitors arriving at ihc airport may be overslaled, particularly for regions that al,c easily dccessi blc by rail, bus, and automobi 1e. Induced iea~sctsare the nlultipl ier effects of the direct aiid indirect impacts. Ttiese are the increases in employ~ii?ntarid incomes over and abovc the combined direct and indirect impacts, created by successive rounds of spending. For example, most of ?he take-home income earned by airport employees is spent locally. Seine oi this spellding becomes ir~conie to local irldividual s v:lio provide services to the airport employees. Some of the spending by airport eritl)loyees goes to local businesses and beconies income to the business ov/ners arid their employees. The11 pari oi iliese second-round iricoines are also spent loc3lly and thus becoil~e ilicoltie to another set of individuais. As successive rounds of spending occur, bddi t ional i ricoi1:e i s c~.eaLed. Altliouyh sotile of the irlduced impacts occur locally, some arc felt outside the i-egiori because of regions1 im2ort cooiponer~ts of tlie goods and services purcttased. It is i~i~por'iani,therefore, that tile specific rnultiplic7r factors selected for the analysis :ake regional imports into account. /,lore eco~~on:-;caliyseli-sufficient regions have i~iyllerr~iul t ipl iers than do reaions that are more dep~ndcnton I-cgional imports, because lilore of the spending arid respendi ng i s done in (.he area. Si111iIarly, two or slore coiiriti es considered together as one ecoiion!ic rqion wil 1 have higher ni~~ltipliers thari wi 11 each individual county. Sug~estiansfor sel'ecti ng and applying iiul tip1 iers ar? presented later iri this chzpter. ~ot.~l.~it~~pac~;are lhe suiii of tlie direct, indirect, and induced impacts. !,!iciespread adoption of tile abovc dcfiliitioiis bv;or~ldcontribute to the con~parabi1 i ty of di ffer-ent airi:ol-t iiilpact assessnt-.nts. The fol lov:ing scctioiis iriciicaie how ihese deiini tions can be us~fulto analysts in suggesting thc kinds of daia that should bc cnllected a~:d the :.:dys in ::'liich thcse data sho~iidbe analyzed. This section prcsents rules of thumb for developing rough estimates of an airport's ~COIIO!~I~Cin~pacts,coinpari.ble to the rules of thumb ci teti in Section 2.3 for estimating benefits. I4oi-e precise esi i1:lates may be obtained by using the rncthadoloqy presented in Chapter 4.0. Rules of tllurnb have been developed for two catenaries of airports: ! Air carrier air1)orts 2. General avSation airports Steo~.-.!.-diit.eriaine em!?~~y~?c~i.i?t._th:-.s.il-r,~ri. If total ai rport en~ployrnent is kf10\.!1i, the i?nalyst n.?y proceed to Step 2. If airport emptoyiilcnt is 1101 known, it can bs csti~iii.tt.-dby the fol1ov:ing rule: For an airport scrsing iilore than 1 million passcngws a year, v~ith rilore tlwn 10 operations eriiplopees and 100 or nlore total employees, the airport has 650 employees for' every mi 11ion commercial passengers a year, including through passengers. Th? uncertainty associated r~iti1 this slatisticzl ly derived coefficient (See Appcndix A) can he indicated by a plus-and- minus 20 percent inter.al, with 1cv;cr 2nd upper 1 imi ts of 520 and 760. For exawple, an airport with 10 ini llion commercial passengers a year xould almost cwtairily fa1 1iiig- in the -i~;:erval from 5,200 to 7,000. This rule does riot apply to siiial ler con-nerci a1 sel-vice airports, but it should be fairly easy to count employe~sdirectly a: these facilities. Note thzt this estiliiate dces liot iticlude any large aircraft manufz,cturi ng or niai ntenance activi ly, iv:tiicli [nay accoltiil for substantial additional ciriployrilent at. soms airports. These situations are discussed in SieP 3. .Stea~ 2.3n.v~cr.tairllorl en:ploy~~!e~~lirito airpr)y_i~~~~frolIs. A review of airport i~npactstudies inaicates that anr~iral airport payroll per employee at hig11 activity air cerr-ier airports is approximately 532,000 (in 1992 dollars). To continue the cxaiiil)le started in Step 1, the airport's esli~naledpayroll ~iouldthen be 6,500 titlies $32,000, or $20E,000,000. The lovier arid upper 1 iirii ts viould be $166,400,000 and S249,600,000. ..-~~Steo 3. pe.t.ct-mj~ie ei??~lopentand payroll.s~~at~~viation-rel~-~~~ busin~~ses. 111 sonic cases, an aviation mar;ufacturir;g plznt, aviation ~ii?intenancefacility, or othel- type of ;viation-related business is located on or near the airport site. If it is clsar that such facilities would not have located in the region in the absence of the airport, their employm~ntand payroll ilr~pacts should be includerl in the analysis. Because these i~lipacts!.:ill riot bn captul-ed by the rule of tliunlb in Step 1, ernpioyii~erit arid payroll data will have to be obtained directly from the facility operators. Step 4. C$.!culate indirect.i~)~;)zci.sof the airl)of-t. Indirect impacts are expenditures in the region for off-site services related to thc airpori. These include local taxzs for tion-corporate based ai !-craft aritl expendi tures by travel agents. But the dominarlt off-site expenditures arc nlade by visitol-s to the area for icod, lodging, entertai nriierii, local transportatiori, and re1 ated services. In 11:ost instances, visitor exl;?rldi tures represent practically a1 1 of the reoion's indirect inipacts. As v:i th direct inipacts, however, only expericii tures for goods and services produced locally should be counted. The meat cooked and served by a local restaul-ant is likely to have 01-iginateo 0utSidf of the region. In this case, oiily the cooking and sel'ving represent local ecoiioriiic aclivi ty. Lik~wise, retai l sales sl~oulc be net of the cost of the i1:erchandisr iiself if the items are produced outside of the reg ion. r$nnual visitor ex[~cridiluresire calcuiated by i~i~uli.iplyiny ~XPSI:~~~UI-CSpel' visi tclr- ijy the ilrin:ber 01 visitors. lf lliesc values have already been estii11att.d with data fro:ii a receiit survey of passengers, they should be used, provided that the expenditures are net of rcgiorlal iii~ports. If regionzl imporis Rave not be?n deducted, a rough estiniate of local value-added econotnic activity liiay be obtained by multiplying the unadjusted results by 0.55. (See Appendix B) . In the absence of a defensible estimate of annual visitor expenditures, a default value may be calculated l?y tile fo1 lvoing siniple 6-step procedure. a. Determine the population of the relevant region. This could be a metropolitan statistical area (MS.(), a primary metropolitan statistical area (~l.;Sli), a consolidated inetropoli tan slatistical arm (CI~IStl),a county, or two or niore counties. 11. Determine tlie annual number of arriving pcssengers at tlie airport. If this figure is not available ft-otil local sources, a call to the Office of Airline Statistics, U.S. Departrrtent of Transporta tion (i102/366-4373) should provide the nuoiber of crriving passengers from their !O percent origin-destination (OD) survey. This number should then be multiplied by !O. This figure is usually equal to the total arlr~ual enplan?eie~~tsminus traiisfer passengers. c. Divide the arriving passengc?r- (i5.P) figure from Step b 1)y the population figure (POP) from Stcp a. AP/POP is a rougii irleasure of the exterlt to which an 6,-2s attracts visitors, both business and pleasure. For example, as show, in Appendix B, AP/POP for Orlando, Florida is 6.7, gi:hereas the AP/POP for Faryo, North Dakota is 1.3. If AP/POP is less thari 1, the indirect impacts of the airport are likely to be negligible and shoultl be ignored. This situation could be the result of heavy reliance by visitors and local travelers on a larger ai rporl: i r~ a rlea~.bg1irel.ropo1 i tan arm. d. If AP/POP is equal to 01- ~rcatcrthan 1, ali estinute of the region's value-added expenditures pcr visitor may be obtair~edirolil Table 3-1. (The derivation of Tzble 3-1 is explained in Appendix E.) For ~xafi~ple,for a region with a population of 300,030 and AP/POP of 3, the default value of cxpcnditures per visitor is 5220. TABLE 3-1 Expenditures per Visitor Adjusted for Rcgiorial 1111porLs 199!=!00 ~.?/;c? ~1 1 2 3 6 > C i 5 Pop,~l2'.ion (COO) - .~.~. ...~...~. . . . .,.. -. jne A? figure obtained from Stcp 11 ir~clutieslocal residents returning to the allport-..- as well as outside visi tor-s. To estimate the nuinber of visitoi.~,nlul ti ply the a~iloulliof AP traffic by 0.5. For visitol--n'nminated regions, a factoi- of 0.6 or 0.7 call he uscd. For ail-ports thal are used priln~rilyby residents, a factor as low as 0.3 may be appt-op~.ie.le. ialli~iultiply tile value obtained fro111Tzble 3-! in Step d by the estimate of thc annual nai~:l)er of visitors fro111Slel: e. The result will bc a default value for tile I-;:.yionls icdirect impacts. Tlie 6-.step procedure is illustrate-(1 by lh? Collowirig exzmple for our i~ypotneticalairpor:: a. The metropolitan area has a populatiori of 750,000. b. The U.S. DOT 10-percent origin-destination survey shows that the annual numher of arriving passengers at the airport is 500,000. I,lultiplying this figure by 10 provides an estieiate of 5,000,000. c. Oivision of the 5,000,000 arriving passengers by the population (750,000) yields an AP/FOi' of 6.67. d. According to Table 3-1, a region \villi a population of 750,000 and an AP/PO? of 6.67 ti~san estin?ated value-added expendi tur? per visi ior oi approximately $320 (t3;;o-ttii rtls of the dirf?rence b2tween $303 and $329). e. Multiplication of the region's estimated AP (5,000,000) by 0.5 yields an estimate of 2,500,000 visitors to the region. f Muliiplication of $320, obtained from Table 3-1, and 2,500,000, the iiu~~lberof visitors, provides an estiniate of regional indirect iiiipacts of $800,@00,000. SJcp 5. C~.lcy~Je..i~~iucedi~tlpacts oi~rp~:tparic!a~ ai i ori-re1 abed emol ovrc-n t and pi:/yrl_ls_. As defined it~Section 3.1, induced impacts are the mctltipli~r- effects of employment, payroll, and other direct (arid indil..nct) consequences of airport activity. Unfortunately, there is no siriglc litill tip1 ier factor that appl ies to every i*egion. The appropriate rnultipliei- factor depends on the degr~eof ecoriomic self sufficiency of tlie region, riot on the level of aii-port activity. The more self depeiider~t the region, tile greater k:ill be ltie exterii io v;liicti expenditures by airports and airpoi-L employees keep tur-ning over within the region, creating additional irico;il:'s vii th cach ncS;: roi~r~tiof spt.n:lirig, i)!~Llie other hand, the 1aar-c- depc!ident iiie rnyio!~,tile nio1.e it 3;:i 11 spend or; qoocis aliii ?ervic?s imported irito the rcgion frorrr other parts of the U.S. Because th? size of the population of the region is a reasonable proxy for dcgrec of self sufficiency, it is possible to relate multiplier factors to population size. Use of tllp follo:.!iny recon!~:iendcd factors requires a knowledge of the size of the population of ihe relevant region, which could be a metropolitan area, a county, etc. ----Pooulation~ .- . I Fact or 'These riiul tiple iactors are based on 2 scr-ies of studies coritluctetl !)y icli lbur Sriii th Associates. For our hypotl~ctical airport, a in:~ltiplier factor of 0.75 is appropri at?, because tile region has a popul atiori of 750,000. Applying this iriul tiplier to the airport payroll, estilirated in Step 2 at 5208,000,000, yields an induced impact of $156,000,000. When the mu1 tipl ier factor is appl ied to the airport's indirect iniyacts, estimated in Step 4, additional induced impacts of 5600,000,000 are obtained. Total induced impacts are thus estinlated to be 5756,000,000. __Steo 6 Calculate...... total_ ecorioillic inoacts. Filial ly, the total annual cconornic inipact of the airport is estimated as the sum of the direct, indireci, and induced (mu1 tipl ier) impacts. For our iiypothetical airport, the total in\pact is calculated as follows: Direct $208,000,000 Ifidi I-ect 000,090,000 Induced 756,000,000 -.. ~- Total $1,7Gt,900,000 Althougll the total economic iri~pact0: $1.8 billion a year for the hy!)oiheiical airport may scelil large, it is actually an untieresii~~late,because ail-poi-t payrolls are the only direct impacts considered. Other expendi tures by airlines, fixed base operators, and tenants are not included in the analysis. These expenditur~s should be added to the direct ecorloniic illpacts whenever the data are avai lzble. G~ner-a1Aviation Aii:po& At an airport \~hxrthe principal use is by general aviation, th. steps outlined above, wi tti the exception of Step 4, should be follel For most. Gk airports, the nurribcr of arriving pzssengers is unlikely to generate appreciaSle illdirect impacts. Iri Stei) i, employi~~entand pay1.011 claLa 111.y be available from the airport manager. The scant data on GA airpcrts suggcsts a rotrqh ratio of 01-ie employee for every 2.2 based aircraft," but this may be iov:cr at siliall airports and higher at larg? ones. Local expenditures nay also b? determined and added to the direct payroll impacts. Stcps 2, 3, 5 and 6 could then be carried out as described above. Table 3-2 illustrates the application of rule-of-thumb procedures to airports oi various activity levels. These activity levels correspond to those in Table 2-2. The principal advantage of the rules of thumb proposed in this section is that their i~nplerlientationrequi re5 1 i ttle tiinc and a niininliim of resources. liowevcr, they yiel tl otily rough appi-oximatioris. k ~~iet,hodologyfor col~ductinga more thorough ililpact assessment is presented in the next chapter. J.r~rondata on fixed base opel-ators by employment-size class, reported in tlic I080 Su&-.v,.~y.~_o.fIjir~rt Service: (23), n;cdian i:UO cmploymc~?t, includinq the F3O lilatlacjer, is 4.5 for the nation a% a whole. The avcragc number of F!301s per airport is 1.1. !l.verz!go I'HO clnplo;l~~f~~tat fin airport is thus 1.1 tifiles 4 .3, or approximcitcly 5.0. 7.11~average nuzbcr of pel-rz.;inc:ni:l y l3zseci aircrart pcr a il-port is 36.2. 'l'lii~,f icjurc cli\rided by Cll~r. avcraq?: aii-par-t iL?o c,;;.;ilo!:ront of 5.0 yield54 i: ratio of 7.2 based i t per ?:so c?z,:,i,loyon. APPROX!!.iA'iE II4FACTS FOR VARIOUS ACT i141TY I-EVELS! --... .-. Total Annual Commercial Passengers Direct (including Plus F;ased through Estiinjtcd Payroll per ToLal Induced Induced Aircraft passc.ngers) E~~iploynlcnt employee' payroll i O I3 i ncome '~il-ectimpacts in table include only cni>lcy;:ir?rrt nnii pi!yrollr;. Ezpenriiturcs st>oul(l !,c ?.fIclcd i i i!v<:'.j!2ble. 'The f iqur-e of $72, 000 use3 in i!ic carljcr rcpoT:t was ccljuatcd to rcTlcct the ?002 cost of living. 'I!, tile r-xi:!i:;>lez s!lnwn in yi?is ti;l]lc, it is; a~,~;ui:?i.cithi:i 0.5 i.7. t'.tlr: a~>y,~-c)!>~-i,?.:-.c~~;~.~lV.i;>l ic?? :?:~cl:,or to I>ci t.0 ' Tlii s cliaptcr describes the n~ethodologyfor cor~ductinya detailed eco~loi~iiciilipact study. It identifies the phases in assessing an airport's econo~iiic ia~pactand offers suggestions for iniplailr-nting tlielii. Particular emphasis is given to the preparation of the study design (Phase 2). Each phase is iiiade up of specific tasks. Althouyh the order in which the tasks are discussed suggests a chronological scttedulin~of researcli effort, the tasks Carl often be cal-ried out sii:~ultaneouslyor in sonie other order. Becau5c of the reiativc coi;~;llexity of tlic PI-occss and the extensive research artd data collection that may be required, an intlivitlual or a small oryanizatioii may not have the necessary expertise arid resources to carry out a detai led assesssient, 2nd professional assistance may bi. requi red. Phase-11, Prel irninary Plaiini_n_o_ The planiting phase of the assess~nentis critical, because it articulates ll~epurpose and thus defines the ori enlation of tlie rzsearcli effort. The ~)lanriingpllase also identi iies the resources to be eii~ployed in carrying out the project. Pllase 1 iiicludes the fol loviliig tasks: k statenient of the purpose of the project will typically reflect soinc actual or per-ceived rcquiri.ri~etiL. Tliis coi~ldbe a regulatory niandate rclal-.d to airport developm~ntplanniny, or' it miyht be a need to docuri!erit. arl airport's economic contributior~Lo an arca to gain finaticial and/or !lo1 i tical suppoi't for the faci 1 i ty. -. ihe statelillnt of purpose should iriclicaie the t6rgc.t ~XJ~~E~CP,c.y., state aviation officials, slate and local elected officials, 0). the general pub1 ic. If n:ore ti:;!\ on? audience is anticil)iiied, it ]!lay be approririilie to oai)l is11 the report in laore tliaii one iorn;at. - i he planning piiase should speci fy the kinris of iniorrnation, both general and specific, to be includcd in ihe 'inal report. This information shoultl include esti~ilatesof direct, indi~wt,induced, 2nd total impacts. An exaritir~ationof sonle prior studies viould be hcl1:Cul in itlenti iyiny additional , inlore specific kinds of information. Various studies have included such data as the aver-age value of homes o\rned by airport employees, the average monthly rent paid by airport employees, the total number of peoplc being supported by airport payrolls, and the annual expenditures of airport ei;~?loycesfor food, /lousing, clothing, iriedical caw, etc. Tile rejliolis Lo b? covered by llie study should be identified. Slutii es that idpnti fy the oeagraptii cal boundaries of the affected regioris can state their fir~ilingswith gretter spccifici ty than ;l!ose i.i:at d9 !lot. It night be uscful to assess future consequences as well as current ijiipdcts. ihis would bc pa~'ticularly useful for the preparation of airport master plans. Given this rcqui relilerlt, reseal-chers would collecr projections of such variables as enplanfd passengers, airport eeiployieent , airport payroll s and expenditures, ail-port construction, air cargo, arid general aviation operations. Seleciiria lilc bo.iect Resources If the iniiiating agency does not iiave the tirrle or tile expertise to carry out the assessment project, all or part of the work can be coritracted out. The selectiorl of project resources will be sllal~ecl by the coi~iplexilyor (.lie task and i.he sponsoring agency's experience in conducting similar studies. Credible rcscarch h2s been performed by state agencies, trade associations, universities, and consul ti rig .f i ~IIIS. P,ev.i.ei.{ino-lhe 1.i tera illre If the project t.eal;l is uniami 1 iar- with the airport impact 1i terature, a seieclive r2viel;; of it is reco~i!:ne~~r!ed.For an cxccl lent e>:a~:ipleof i.lie appl icatiori ci the suqgesticrns offel.t.d ill our original 1386 FAA guide1 irtes, the readct- is referred to MIPACT! The Ecpmoilti c-_l~iinactof Cbjiv_1-i!.lc7Lion on the U. >,...Ec.qnon~y,, prc[jar~d by idi 1bur Smith Associates (24). A 1 i terature survey wi 11 suggc-st tlie kinds of data tliat arc availa!)le and tlifir sources. The 1i tel-ature fa1 1 s into two gerieral categories: rt~ftlioaologiesarid specific studies. While some of the ~iietl~odologicalliteratut'e emphasizes o\gerall research sti-ategy, solrie pr~\~idesspecific suggestions rega~'cling the design of questionnaires (I), (3), (17) (25). Some mcthodological advice is restricted to the economic in~pactsof general aviation ai rporis (8), (19). Studies of the econottlic impacts of specific air-ports have lieen carried out for vi\'tual ly every type of air-port. -~heseinclud? larqe iiub ail-ports, e.g., (41, (16), e~ediunihub airports, e.g., (Z), (iIO), sillall liub airports, e.g., (14), (21), aritl re1 iever and general aviation airports, e.g., (lo), (12). Phase 2 Ow~~!)li:entof-tlic..Stu(ly Flari. Development of the study plan entails defining the questions to be answered, the a1ternalive methods of answering t i and then selecting speci fic procedi~resFor collecting arid analyzing data. If possible, it should he designed by t!le orgzriization that ??ill iiiiplenlent it. E, contractor shouid clevelop the study plan in coi laboration wi Lh the sponsoring agency ro cnsure Chat ihe r.esearch contri bules effective1 y to the goals of .the study. The n~ethodologyshould be orga!iized in terins of ilie tasks of estimating the airport's direct, indirect, itiduced, and rota1 economic il:~~)act.s as follovis: -~tli:.starting point sliould be a cleat- statcnicrli or tlie impacts to be esti~aated. In general, an ail-povt's ail-cct irr:pacts a:-e Lhe i~tjtiiedi~tcccono~iiic conscqu?rices of mployincj 1abor, OUI-chasing local ly-produced goods and servi'zc.s, iirid conti-actirig for ai r.()ort construction and capi tal in;)rovements by air1 iiies, i'ix~dbase operators, ?viation-rela!ed facilities, and oilier busiricsses ogeraiing at the airport. Dit-ect irlipacts originaie at the aii-pot-t, but soine, 1 i kc cxpentli tures for local ly-produced supplies, are fell avtzy from the airport site. Decisions can then be made reoarding which impacts to quantify. The direct impacts selected for qtraritificatior~slloulcl Llieri be 1 inked :.ti th specific impact measures. The principal nieasures of on-si tc dircct impacts are airport e~~~ploy~iierit,airpor:. payroll s, and expendi tures for capital constructio~i. f4easures of off-si te direct impacts include airport cxpendi tures for saterials, cquipii~eiit, fuel, and utilities. Data should be collected directly frciii busirlesses strcli ?s ?iriir:es, concf-ssior~s,fixed base opera tors, air cargo opoi-ators, othcr ai rport tcnalits, ?nrl aviation-relaied businesses. If project rcsaurces permi i, 1)ersorial iiiterviews are preferable to nai led questionnaires, bccause they ensure that each question is understood and answered coriiplctcly aiici uriar~~l)iyuously. Although the survey [)l-ol,ably should be tailor-made to accom~i~odate the unique characteristics of the airport being studied, tile sluciy plan should provide for the study of questionnaires that have been used in other airport impact assess~iletits. (These are often pr~sentedin apperidi ces of reports .) The fol lov:ing kinds of i~iiormationregartiiny each airport tenant are likely to be ~~scfulin suttsequer~tanalysis, and these should bc specified: 1. Type of business (airline, i-erit?l car ngency, I-estauranl, gift shop, fixed base operatcri-, air ircight operator, etc.) 2. Nu~iiher of employees working ai the airport or plwidir~g support services 3. Total ?iiiival payroll of frlies~cnployc~s 4. Local expenditures during tl;~past ycar on servicss, niat.e~'i;;ls rind squipr:ent, irlcludfrlg vel~iclcfuel, ?v:ation fuol, mainterr?:lce Grid r-fpail-, ddvertising, electricity, telephone service, and capitzl inprovements at the airport. 5. Annual total dollar sales (especially if the R1t.IS li approach is to be used; see pp. 32-33.) The end product of this task should b? ? set of dcta on such variables as airport employment, payrolls, sales and expenditures. These data, along v:ilh dat.2 on indirect itilpacis, will be coinponfnts of the total estimated impacts. They will also be used in the cstiination of i nduccil ilr:l)acts. The study design should out1 ine procedures for neasuri ng i11:pacts derived from econoi~iic activities of oif-site enterpi-ises that serve the airport's us?rs, e.g., t~-avelagencies, hotels, restzurants, arid retai 1 stores, Like airport bi~sille~~e~,they too eiilploy vrorker;, purchase local 1y PI-oduced goods arid ser-vices, z~!d i nvest in czpital projects. Travel agency data m6y be coliectcd directly by interview or a mailed questionr:air-e. If tile region hrls a large n~ii1be1-of travel agencies, a sample survey should be considered. The kind of info?-mation to bit obtained is esserltially tile sane as thzt collected froir~airport tenz~ts,i .e., data on ~iliployiiient, pzyrol ls, and expenditures. It is particuiariy imporiant Chat the agencies estimate the percentage of their busincss that is reiated to local use of the ai roort. Data on iocal expenditures of tourists and other visiiors to the area ~lioarrive at the airport can be esti~~iatedby a survey of I>otels and travel agencies or obtaincd by at1 air passeng2r survey. Prior to the survey, a meeting should bc held with airport rn?rlagement to yain its cooperation and to plan a sampling procedure that \vi 11 rrot inter-:el-e wit11 airport ol?era!iol~s. Passenger svrseys are o;te~-~regartletl as intrusive and every cffol't sirould be made to keep them as brief and painless as poisiblc, v:liile maintzining statistical vzl icii ty and obt?,ini~igthe necessary irlfor~ir?.tion. 1nfori;ratioil to be requested iron di!par.Li ~igr~c!i-loc? l 1passer:ger.s slio~rldiriclutie 111. rol lo~v;i~i;: 1. Principal purpose of visiling the ar?a (easiness, convention, vccation, etc.) 2. Tl~cnuiiiber of tri pz to th? airport in the past year- - 3. &lierlulilber of (lays speni in the area - 4. rhc appr.oxililate srrrirs or nmey spent locel ly on lorlgin?, food and beverages, gifts, entertainnieni, trans:)or1.ation, etc. Iliese sainple data arc thzn !.he biisis for ex:rapol~.ting toiai a11::ual expetidit~iresby tourists anil other visit01.s to the area. The expenditure palter-{is of hotels, restaurents, and other erttel-pl-ises that cater to visiiol's do [lot have to be dcter~:~itiedunless, aj discussed below, iiignly reri~~edestimctes of induced in~pactsarc desired. The filial output of this task should be a set of csti~~:atesof such !ileasures as (1) ai rpo1.t-re1 iitd e~i~ploy~iicl~t,payroll s, arid local expendi turfs of travel ag~ncics,and (2) an!iual expc:idilures of tourists and otlier sisiig~.sfor- lodging, food, er~lertainf~:ent,gifts, etc. -Inducec!~.~..~~ ~ and Total !lilo-agJ-5 Tile study design siioul d rpxi fy c proceduri! Tor 12easu1-iclg ill(!uced i~npacts,the result of succc.ssive rour!ds of spcnclitig that origiriaie :.:it11 the direct arid indircct impacts discussed abov?. Tile sum of th3 direct, intlirect, arid iliduceti il;i;)~ctsI-~PI-CSCI~~S iiie totzl clilp1oy:nenl. 2nd i ncof!le impacts of tlie airport. iivAtced i~pactsar-c. typicaliy ~i!easured Oy i~:;~liiplyirrgit13 sun1 of the di reel arid i ri:li rcct irajjacis by soiili. factor. So!lie past studi~s ~;plicd differerit i~iultiplierfactors to iridivitlunl co~~ipo~ientsof direct and indirect iinpacls. As discussed zbove, mu1 tiplier valrjps +liould reflect the pec~rliareconomic characteristics of the region in which the airl)oi.L is located, especially the extent to wliich tlie region is ecorlomical ly self sufficient. lfevelopnierjt of (.lie study dcsiyr! r'itcjuires consideration of tile follor.rino three options for estirirating induced impacts: the eco~ior~licbase model, an econometric model, and a regional input-output model. One approach to estiniating regional mu1 tip1 icrs is the econo~~lic base model (13). This ~irodel relates changes in goods sold within the region ("nonbasic" or "service") to ctlar~ges in goods sold outsidn tiie region ("basic"). This model is siinple in theory arid icexpensive to construct. I-l~\~ever,beczuse it divides local ecol-~omicactivity into orlly two broad c?.tecories, itie ecotio~ilicbase multiplier is an average for the entire basic sector, arid this may riot accur-ately reflecl the specific induced consequences of the airport's direct and indirect inpzcts. iri adtiition the classificatioli of a region's industries as either basic or- service is somewhat arbitrary. For ex~niplc,i~lanufact.ur.ing, which is typically classified as a basic sector, often has some local orientatior~,e.g., food processing anti printirig. Also, banking, a snrvicc sector, rliay serve a market larger tliari tlie rqion being studied. Despite these limitations, however, the economic base model has been witlel y used for regional econoi~iic ~nalysis. sc-cond a[)proacli is to develop ari ecor~ometricmodel of ilie r?gion tt1i.t qvarili ries the relationships an!orlg a nu~iiber of key ecoiio:~~ic variables, e.g., income, corlsu~iiption expenditures, and the regionat price level (13). Tiiese lilodels are sil:lila~' in nature to niacroeconoinic rnodcls oi natiolial econori~iesand are usually based on time series data. Regression analysis is tl~eprincipal statistical tool used to estil~iatetile ecoriomic relatio~iships. Regional econoln?iric models are capable of estirnatirig 2. singl? multiplier, and tliis can then be applied to the cstiri~aieddirect and indirect impacts io derive the total econo:nic impacts of tile airport. fissistarice for d~vslopirig01- applying this kin:l oi rliodel can typicaliy be obtained frolil ill1 ecorionic consullilig firm or a unive~.sity. Eco!toritet.ric ~rrodcls developed for re~ionalanalysis have two principal iiinitations. First, most of the ~'t?qc~iretidata are ofteri available only at the state and rn?tropolitan area levels. Counly level ~i!odclinq may thus not bc possible. Second, regional models tend to be costly lo tlevelop in terlns of time and labor. A third approach is to use an input-output (1-0) franiev:oric of analysis. This is partictrlarly useful for taking into account the depelidericy of each ecorlonric sector on every other sector. Ttiis approach viill also yield estimates of the differential mu1 tipl ier effecis of direct and illdirect ilnpacts on separate rcgionai sectors. Regional 1-0 n!odels can be construcierl with region-specific data, but ihly are frequently based or1 a n? An alternative solution is to purchase niul tiplier factors estimated for the region fro111 the BUI-eau of Ecotiomic Analysis (BEA) of tlie U.S. Departlnent of Conimrrce. These factors sre available for any county or set of contiguous counlies in the United States. At present (1992), the cost of tliese iriul tipl iel-5 is 51,500 p?r rcgion, regasdlcss of the nurribcr- of counties in the region. 'Chi- BEA's Rcgional Input-Oatput I*iodeling System (R!:1S 11) r~ii~ltiplicrsare dcrivcd from tlie national input-output (1-0) ttible, which s1ioi.m the inp~rtand output structul-e of 531 1I.S. industries. Tlte national 1-0 matrix is made region specific by the us? of location quotients, which are measures of a regional industry's share of total regional econolilic activity relative to that intiustry's share of national econoii~ic activi ty. A technical discussiori of :!re derivi~iiorlof the kII4S 11 niul tip1 iers is foa!id ill the 8EA's fiegiotlal I~~p~~t-Outpc~t~oci~.linq .S~&~IJ ((22). RII.1S I I illultipliers havr b~cnusfd in inipact studies of a number of ail.i)orls, e.g., Aricllor;;.ae Intel-riztiorial Ai t'l:ot.t (5), Jzcksoivi 1 le Itliernational Airport (7), Roanoke Regional Airport (le), and Vashinglon National Airport (11). Each sat of RIMS IJ multipliers includes three tables: an eniployr~i~ntraul tiplier table, a total earninos inultiplier table, and a tot:?l ~r~ultiplierlablc. In addition, BEA \:'ill provide a household direct coefficient table upon request. Thn total earnings inul tipl iers are the most relevant for the economic ii~ipact assessment. They can b? applied to either a general category of expenditures, e.g., airline expenditures, or to specific expenditur-e items, e.g., airline expcndi tures oii up to 39 separate classi iications of itenis, e.g., fuel ant1 i~iaintenanceand repair. Morc refined estimates of multiplier effects can be obtained by applying separate mu1 tipl iers to individual cxperic!i ture componelits. Rib-IS II niultipliei,~can tlius be tiscd to cstiniatc the airport's total inipact on eniployiilerit and income, both for the region as a $;:hole, and, if desired, Tor speci iic intlustries within :lie rqion. It should be noted that the application of the HI/-IS 11 m~rltipliers leads directly to tolal impacts anti does not identify induced ioipacts explicitly. -0incsc, hoviever, can be calculated by simply subtracting direct and indirect impacts froni tlie total. An exaiiiijle of ttic use of RildS iI lliultipliers is presented ill Appendix C. One of ttle nicst useful aspxts of the sludy Inlay I)? to esiiir~stetlie ecorioniic iiiipacts of future clianges in the use oi the airport, particulat-lg as the result of increased passenger- traffic, An airpurl's cconoli~iciaipacts, 1i ke its benefi ls, car1 i;e exi)r?cLed lo change over tirrie as ail-port aciiviiy changes. Econoiiiic intpacts can be projected into the futul-c by using the estimated relationship between airport ernploy~~:c-ntatid the nu~iiber of comniercial passcngfrs siiov!n it1 Figure A-1 in /~ppcndixI\. Hov!ever, an adjustment should be inaduo reflect productivity improvelnents that are expected in the economy. Productivity increases on the orcier or trio percent psr y?ar in air1 ine costs and e!~!ploynient and onc percenl p-lr year in other sectors nay be cnticipated. 1.11~actual condilct of the research wi 11 reilcct the eciphasis, avai liibili ty of data, ant1 ti~neanti resources available. So~ile general pi-ogra~niliariagcment techni~uesare useful in sctiedi~ling arid coordinating ttie effort. Diqrariis of tile sort used by such net;!ork techniques as ille CI-itical Path t4etliod (CPt4) and the Prograrn Evaluation and Review Technique (PERT) are particularly useful for ensuring that tasks are perfors~ed in the proper sequence and coliipleted in a timely manner. Additionally, provisions should bc iuadc for frequent assessments of the various tasks within the study plan. Kc-visions and adjilstli~ents to ttie srildy plarl and sch~dulemay be necessitated by unforeseen early successes 01. probl ci~is. Phase~ 4. Presentation~ ..- arl(i' Revicgf tll? Econo~~iici\s~ess.m~~-~t Resort The successful completion of the study should result initially in a draft technical report suitable for review. TI]? draft report should be a detailed account of the purpose of the study, analytical tcchniques employetl, data analyzed, and the coiic.lusions of the rescarcii. Subsequently, the coinriients on the draft ~'ejtort should be incorporated into tlie final tecliriical report. The rcvier: process can bc. very helpful both in assuring the accurzcy of the results and i 11 increasi iig ttie general acceptabi 1 i ty and cvcntual use of the sludy, if possible, individuals or organizations r:iio tiave specific knowledge of the si tuation or who may be ililectcd by the stvdy sliould provide coilrnents. Finally, an cffot-t sllould be itlade lo publicize and distribute the results of the study. A brief, well illustraietl brocliul'e should preserlt tti~I-csults in easily understood ternis. The brochure should be sui tab1 e for i nexpellsive reproduction, as a. 1;\rye 11~11i1ber will be distributed. A briefing package, with a series of slides or vievigra~~lisatirl an accoinpanyiny script, c?n l~eused by airl)orl nianaqeilient to [??escnt the study I-?sill ts to iocal officials, service or~aniratiotis,and the ccncral public. I\ 15-lninilte prcseniatiori is usually sui tablc. 11.n irii tial program to inlroduc? the iintiirlgs injay include a press release, a briefing for ~'?presentativcsof the ~iiedia, anci a ifitel- report to intcresi:ed parties. I4agazine 01- newspapel- inserts tilay be prepared slid financed by advertising from airpo1.1 tellants knd thcir suppliers. Reports for distr-ibution to the gcneral pub1 ic are typically short brochures that present the principal findings cf lii~researcl~. I,nalyti cal techniques are avai lab1 c Lo quantify the transportation benefits and thc ecorlomic impacts of airports. Ru1 es of i.huillb, consistent with those analytical techniques, can provide prcl iisinary but imprecise estimates by relating airport activity to benefits and Lo economic impact in terms of the jobs and payroll that result fron the airporl. Table 4-1 illustratec typical figures lor airports \.ii tt~vsrious activi Ly levels. APPR0XII.lATE GEREFITS Ail'0 !NPiICl'S FOR YARICUS fiCIIV ITY LEVCI-S Oe~lefi t s 0i rect Plus Induced impact Annual Rcduccion lotal Eased Conncrcial Value of in Travel P.nnua1 kircrafc Passengers Tine Savcd Cost Beneii t kn~lual Payrol 1 Source: Tables 2-2 and 3-1 T;'ic: rs!e of thui:!ij pr.csented in :;,?~-:ti~],3.2 lor estizi;.tilirj21; ;;.ll-por~.':; e:::ployx>nt or: t:ti? basis qf i..r,nuc-.l co!:::iierci;:l Ij.!.'.s*r-l:g.?rl;, iricluciincj tliroilyb, passe~icjer-s, is ilc.\,clopcc! iron . .-!i;.pic. rccjr-ession arlalysis. t'icjurc A.-l stioxs till plat of [;sir.:.!: 2nd the c!r;ltirn3tecl re,grcr;sion li~;c' for thc 61 airpc~rt-si:-1 t:he a : ( 1 A - The equztion oP the reg.-essio:, lir~ci!; Airport cnployment = 650.5*passcngers (nillions), :i.her-n p;:!:-ci,?l?cjers are thc st12 of arriving plus dcprii:ti!ig travelers. ,Ti. ~r,,i_ r-scjcarc hc?t.cnc-.r: ok%;.sel-veciclnd pr:cdicted airporl i:;:;!.n.y:;~~::lt i,- L1. GI?. The t valuc of 9 .0 iiidiciltct; tIt:!r. tile 1-eqres:ior; coi-f ficien'i i!;statistically siqrli ijcant at: ti~r: i ?:.:?rc~;-~ti8?.:;?1 . 1 . r! 1 I I-e noted thcit the ccpratio!i was ~r.t.i~eateclthr-~~.iqb.t:.i~: or-i:::r~. :or t:i:::pl lcitj.. In a separate reijr-c:;sior; that pi-r.~,i:;i::.i zii i~ttcrcepttorn, thc ~iifl'er-encu!jcrweeo the estinacr?:: int~:-r?ei:,t 2-11 1 - ! fourid to be not stntistlc~illyr,i.c;liii:icc!it. FIGURE A-1: AIRPORTS WITH MORE THAN ONE MILLION PASSENGERS PASSENGERS (Mil-LIONS) St. Louis-I~?~?~r:rt Detroit Hctro-V~yne Iionolulu Inte-national Minneapolis-St. Paul Phoenix-Sky fiarbor Greater Pittsburgh Las Vegas HcCarran Houston Intcrnational Sca Tac international Charlottf Mcx,i)his lnternztional lias!,inyto!>-iX:Il~?s San Diego Tahpa lntcrnational S?.lt Lake City Inti Kansas City-lntcrnational Baltinore Gashingtcn Internati It. Ljuder-dale-liollyv99rj Houston lisbby 1:cw 0rleai:s 1nter.natiunal Clevcland tio:>kin:; Nzshville Ke21-opoli ta:-, San JOSC inLcrnttiona1 San Antonio Ilit.crns".otir:l I)allas Love Haleigh-Durhah Indianapolis 1nte~-national Dzyton I!>te~-~>&tional Fal~Ucach international Or,tario Intel-nntional Altuqucrquc lnternstional Sants Ana-Jehn Wayne Oakland Intcrnationzl hustin-Mucller Sacramento Metropolitan Port Colui:?~i!l: Intl Milwuakee-Gen. Mitchell Bucfalo International Reno Cannon IIorfoIk Ir~ter-riafjon(i1 Surbahk-Glondale-Pasadena Tucson Inte~mational Oklalroma City-will Kogcrs Jacks~nvil?~ 1nttzrr.ation.l ?,ncho~-age ..L. Myers-Sr;u';:r:'-'cr;t.F?a &%?ha-Epplcy L~uisville-St;:!-.difort1 Greensboro 12389 Kar~ick-TF Grccn State 64 2 Richmond Intcrnztional 1401 Ri.m,inghar; Municipal 3880 Spokane Intcrnational 700 Sarasota-Bradenton 763 Des Moines International 54 0 Colol-ado Springs 3'76 biichita Kid-Conti.ne:iL 2311 Grand Rapids-Kent GOO Knoxville-McGhec Tyson 7 I *, rang Beach 1550 Colurhia Metropol itan 793 Midland Regional 580 Savanz;ah 4822 ~reenvj1If SpZrLanburg 728 The \:ali:es in Table 3-1 at-e bescd on a st.atisticzi1 rclatio!lship between expenditures per visitor (E?V), regional population (I'ol'), anc! number of arriving pc<:;r;enycl-s (A?) for 35 airport:;. Data on e>:perltij.tures pcr passenger were ohtai!lfd from Jji!:.?.C:l:, liilbur Srnith A~i::o~:.iilte~,1989, This 523ple ir)c:l~dc~a wide I-~II~C of airport sizes and represents airports fron nany rcyions oi t-.he cour?try. The original dall;! set is prcscnted in ?'able Li.-1, U.L.TA. SET City Anchoraqc I~I~cx?~ i >: Bul-bank Los Angelcr; Ontario San 1;:-ancj.sco SBP San Luis 0hi:;po ST 5; Snnta Rosa DCP. Washington IAD Washington :4co Orlando ATT, P.tlanta DO1 Boisc OR!) Chicago BOS Bozton :.':sp E:inlleapoli~ 3x3 Bisnerck DVI. 0cvil1s Lake Farqo Grand Forks J?mestobrn t.:inot Rock sprirty:; \?illi~tot~ Ihs Vegas Buffalo Long :I!;Iznd Ilf$i TOL-k t:cw York tlek! Yc~rk Redmoncl-5c;id ilar?ir,bu?-g Tzble P,-!. (conl:.) Id City I'iiL Philadelphia P7t (1 16 5755 4530 PIT Pittsburgh Pk. 7.38 2372 2925 UAL Dallas TX 191 3348 1800 Consolidation of the data in Tablc is-1 was required becnuse of the inclusion of son)@ large, multi-airpoi-t netropolitan areas. Thcre arc uat:a for t:)lree of the fixye greorfr- Lo?; ?,ngclc?:; airports (l,A:.:, Oli'l'. IIUK), for all four sicjnificant ?icw York City zirports (CI.;K, JF'ii, LGA, ISP), both l.iaclll.ncjton, U.C. airports, 01H2r:c but nut I.:id>:ay in Chicnqo, and Dalli..:; Love hut. not DFVi in Dalla!:-Po::: Worth. 111 some case!: t-t~ercwere sqmrate FP'J estimztcs by airport, hut there was a sincjle nul:riu:r Tor Lllc t111-ee NYC oj,z:po1:ts. For each of thqse la-rje cetr-opolitan areas, onc ot;scr.vation +!as r::or~sC.r~lct.odfor use in ~hest~tisLi.c~?l an:~lysir;. Tt~e consolida1:cd metropolitan statisLical area (CRSii) population and the nui;,l?ei- of srl-iving pas!:cngcrs ior all airports in the CXSA r,wr'e used. Tllc EPV is sn averace of i.ndi.virlua1. ZPVs! i~v?igt!ted by tho individual numbers of arriving pa:isengars. Misslnq airports, such as LGD 2nd S?!A in I,os I:lICjcJC:;, G1CL.C aL;:;llr;,Ccl to satisfy the average calculated for the airpo~:ts for which there were data. This ?nay be a problcn for the Drillas observation, where our data arc for the sr>aller air-port, vliich is also thc one that might be preferred by the noro cost-conscious travalers. The results of this data con5olidation arc p?i?sclitnd in T\?;t>l~E-2, wl1icI1 served as the final data sot for the st3t:istical ~nalysis. Tilhlf I:--? City Las vecjas Ot'l 811C10 l'hooni,: At1 anta ,.:.dsn-ngton' i ~etro s TO San Francisco EOT 30lS? i..liC Anr:itor~!cje TAULE A-Z ('on=. ) Id City St SLxp/vi~:itor Popul atioil A?/Po!r iip (000) (000) D?.llas Retro ,,I >.. Zooston !Gi t.:i.nnenpolis Fix ct~icayoI,.~rtro . I L. Los kngele!; e!ctr:o cir RIS Rismal-ck N V MOT Mil~ot N V I:>& l'aryo ND PIT Pittzhurqh PA 3UF Buffalo ;.iy ! 1% rcgressio:~of ESP on POP and ,\P/POP procluceci tile Pol loi.:ir'q result: ,.,,!,!c R squared is 0.53, and t!lc coe~l;icientsarc siqni.ficz.nt at tilt 5 percent level. ?'he :-c(~rct::;j.on results arc the basis of Tablc 0-3. TADLE I?-3 E?:l'E110:CTURES ?i:R VlSlTOR 1927=100 -it will I?(. noted that thc cxpendit;t!rcs per visitor in 'I'able 13-3 arc i.11 1937 clollarr;. Betr'c-en 1907 and Uecemhcr , 1931, hoxover , the consuxcr price index (CPI) incrcascd by 21.4 porccnt. Tchlc R-C reflects this incroasc in the CPI. TABLE B-4 EX?ERDTTURES !>EK VTSTTOH 199lz=1O0 >\I-'/POP A fincil arljustment wss required t.o make the expcntlitur:c!i; per visitor reflect rcqional econonic activity only and not a mixture of rcyinnal economic activity plus regional imp0rt.s. This was done by a 4-stcp procedure as Zollows: i. Data on 110:; visitor c>:.:pcnditures arc di viti?cl among najvr tipending categories were obtained from 11 airport i~q~ctstudies. The median perccnt.ages for mediun- sized airports are 31 pcrccnt for lodging, 27 p~~cent for restau~-ants,15 percent for retail estahlishcents, 12 pcrccnt for ~ntertainncnt,and 12 percent for local transportation. For all five cztegories of visitor spending, there was very little dilfcrence bstveen large and medium-sized airports. 2. For each of the Pive spending CZ~~CJOL-ies,it was zssuaiecl thzt "val~:cadr)ecl," as rcported in the U.S. ur?partnext of Co::;mcrcc':: i.:~put-output trihles, originetct; loca i I y. "Vi~lucaddc:d" is the sul?, of c;nployee compensation, indirect hu!;incss taxes (c.4. , property taxes), profit, and net interest. hs percentages of total output, the valuc added for lodging is 60 parccnt, Eor restaurants 40 percent, for rcCai.1 establishments 70 percent, for entertainment 50 percent, and :or 1.ocal transpiration 70 percent. + . 'I'lic value addr?d 1)erce:it~gesfro::, Step 2 were averaged, ~i!;i.ny t.he visitor expenditure pe1:c:cntlages from Step 1 as xf iglltf;. The ~-escltin~ji.'eiglited av~il:ac~eis 0.55. . Each entry in l';~'nlc H-i, rss rr.altipli~di;y 0.55 to obtain cstimclt.er: of visitor cspri~diturct;thst 'r-~~~-c:!x~lt local cconci?ic activity. 'i'hc results are t!le entriei; in Tablc 3-i in the test. i his appendix describes the RI1-i5 I1 nultiplicrs, descrihcs the litannet: in which they arc used, and P~CSEII~Sa Salilple set of ci11culatrio:is for deter-ninirrq I-ecjionai impacts.' HTbiS 1T xultiplicrc are int:endscl to show the total rerjionitl aflcr:t:; on industrial output, personal earnings and employment for any county or group of contiguous counties in thc United St-.at:c:; resulting from any indu:;try activi.ty. Indastry Bescr-iptiorlr; ?.::a defined according to the 1977 Bureau of Economic Analysis (WA) ni?tional input-output t-ables. Induced iail>ac:ts for any airport- ri2lzt:ed businesses can he cr;ti!nated by applying t:he RiI.lS I1 ::iultipli.c?s to activities within the air transportation industrial sector. .U,II*ISTT multiplic?-s ?!re given in three tables: total out[;at multiplier:;, earnings multiplier!;, and employment multipliers. In addition, REA will zlso pl-ovide a household direct cocfricient table cpon reqclcst. The total output: ix~ltiplicrtable ir; 11:;cci to conputc the total impact of a change in demand. There i:iul.ti.pliers identify the demands plsced on a particuliir r'ccjion from Ct~c~uturegrowth of a business activity. Tho carningl multiplier$; 1aeasui-c the impacts on ear-niny:: (incoze) and c:mpJ.oylnent. The employment ~~ultiplictsa?-= ~1seCI in calcul.ati.ng the total number of jobs created by final changes in demand. Of thc three sets oi ~iiultiplicrs,the earnincjs multi.pl.iers arc the nnst suitablc for estinntiny the economic ini1act.s of a part-icular husincss activity. The dire-ct coefficjcnt table can be u:;cd to determine sales of a particular regional inrlustry when ail-port expenditures are the cnly availahlo infornation. 7r.ill>h aviation business related to a torgetccl ai~1-porti:; assicjned e. Stznciar-cl Ind:~:;trj.al ClassiTjcation code. 'i'h,? i~:.liation-related business is identif icd with a corresponding 2il.IS il code nunbcr. 'rab1.e C-1 presr!nts husincsr; activitj.es th;+:: c+re*r,ostlikely encountct-ed in aviation-relatcd econoP.ic studics. These activities ci?n be matched xith corrcspondincj RlMS I1 code numbers. 'r'he KII-lt; I1 code number will iflentif)! the spccific multipliez fnctor to hc applied to the affect-ad business. The lZ11~fS IT model uses sales by aviation businesses t.o estimate Llrc final dcnand at tarqeted airports. Eusiness activities are evi\l.ua::cd ancl dc?Cined accordincj to their lr?vc:l of econonic :l,:uch oi ';!?is dir,cu:;cio~; is dr.a!.in from Do~:n.lil~;S. l.lc!.eccl, P,c.:onim~nd.j~._!j~~j.~,n~.~~ E I. magnit-ucie of sales 2. size of purcl~?.sc 3. identity 0:: purchase I,. number of employees 5. size of payroll --Ln gt:ller.;tl, ssles should be nu1tiplic.d by HI14S I1 nultjplierr; to clc?t:criiij nc econonlic illlpacts. Ho>:ever-, if data arc l.?,cking for some spociiic types of business activity, other infornation,such as expenditures, payroll cnrninys and number of exployees can be ur;ed. The following calcul>.tions i1l~ctr~V.ctt~c RTI.:C- TI ii~ethodr; of computing economic imp?ctc iron dnta on sic-port sales, payroll and csipl oyiccnt. ii\'IRTIOl; RIMS 11 CODE Ell.i!.lRERS .P... 1...RTORT-.. 74hlli\4A. .-i.'I X1:D.- HASrn ...O .:E!7BOIiS kircraft Servicing hircraft Rcntal Acrial Spraying -.i;'l:DEI<4L.-. F?~1711z17'1!S Air National Guard kir Traific Control hirport 1,:ail Facilities hi?-Ways Yaci1j.?.i es Armcd Forces Customs Pat.rol Forestry Sc!rvl.cn Weather- service Q~:;ITE Ai!I 7..?'1.0!! :~KEJ2m Advertisiny h i . 1.lanufacturinq hircraf t sales (rftail) Airport Parking hirport Securit.y Airpor:t Terminal Scrviccs hut0 Kcrltal Auxiliary Aircrnrt. Parts Manufacturing kviation School Avionics Kan11Cactu~-ing Avionics Repair Barber Sllops ~ookstores Guildinq l~laintcnanceand clcaninq Coin-Opcrated A~usencnt Dr i.nking l'lacc:; Drug stores Engi.ne and Prc)pel !er !~:anufi~~~.lIrillg i'j.r:o Dep3~-tmcnt:; i t Int'.\ir.ance Flying Clubs Table C-l (cont.) Dusinr.ss Flying Instructions Food Scrviccs Freig!>-L Forwzrding Gift Shops iiotcls/Motels News Ocalers Personnel Supply Services police Depzrtnent Repair Shops Restaurants Taxi Service Tobii.-co Shops 'I'r~velAgC!,tS A. cusincss - Fixed based opetator (from survey) 3. RIt.1.5 I1 Code Eiumber - 650500 (from 'l'sblc C-1) C. Sales - $100,000 (from survey) V. RItG TI earnings multiplier for code number 650500 - 0.6131 (from RIt4S I1 tables) 1%. Earnings Iapact Calculations Sales tines ea~-ningsmultiplier SlO0,OO ;: 0.6331 = $61,210 A. i3usiness - Engina znd propeller manufacturer (fron survey) h. RII.:S IT Code NlIhbcI. - 610700 (fro;;: I'ablr! C-1) C. Sales - I:oce provided (froa survey) V. Payroll - $300,000 (from survey) E. !),lI.lS I1 earnings multipl.j.cr for code numhc?r 6111700 - 0.7120 (from RT?.lS 11 Ltlhles) A. Obtain direct coefficient household nultiplier for apj)licabl e P.II,lS code numbcr (610700) - 0.3675 (from RI!.IS I1 tab1.c::) . U. Calculzce economic base multiplier- by clividiny I?r!.rs 11 esrninyr, multipli.el- (0.7120) by direct cueiiicicnt household taultil>l.i.er: (0. 3676) = 1.9369. C. Deternine c;lrtii.ncjs by mu1t;iplyinc payroll b:; cconoaic base multipl.i.cr.. 2. ii]:!;&~j.!~g_RTl~IS. .J:l~)nroach~~~0_J.~~3~~o_yrn~r~tnatq I. Assumptions . Rusiness - ncrial sprayer (Crom survey) I?. RIf4S I1 Codo Iiui;.bcr - OLOlOO (:rOin Table C-.I.) C. Scales - Ilonr. provided (iroa survel1) U. Ecployees - 3 (c:;tj~iated from nirpurt cnnager) F:. Illt'iL; I1 czrnlncjs nultipliel- for co!-lc nuzb-r 03 0100 - 0.5662 (fxo~hl!.!S TT tables) 11. E.??-!~j.n:[z Ieq,act Calculz3t ions A. Obtain direct coctricicrllr housc!~c!sl ;i;u:lt:;.plic.r Sor aj~plizal~leRl:.:S coclc nunher (010100) - 0. 2614 (iru?n RIt.1:; 11 tables) . 8. Calculate economic bcise sulLip1.i.r.r by tli.vi.clincj RT?G I1 earnings multiplier (0.566%) by dircct cocfrjcient household multiplier (0.2619) = 2.1619. C. Obtain average eal-nings per job - $15,000 (f'ro? SIC numtxr, KI!.:S 'TI code numhcr ancl cou~lty). D. Determine payroll by multiplyincj thc cst:inated number of employees (3) times the avcreqc carninqs por job ($15,000) :: $45,000. . Determine earnings by multiplyinq payroll by economic base nul.tiulie~- &ir- T~-z.~ispor:t..i.r,?iociatio! oi ;~._liiericr,,i i i t-hc Ccmgu~,(i?cviscc;), Wss!ii~icjt.on, UC, :.:ax-ch, 1977. Air- Transport Association of P.mcrica, How C.0 nu .an Air-l>or'1: Ecor>n~i!i..c--1m~act.. Stl:.dy, kiashi~lgton, DC, April, 1582 . Air Transport Association of i;meri cil , Q~h.ingL~?L.i.~n~a2,. m-l.iil1io1-r I?oor;t to Economy, April, 1980. Applied Economics hssoci ates, Inc. , R. E. llanscn Research Associatc~,ancl V:ill.ials H. I?cyr:rs, ~hcU:t;nc.v.ic J:;:i>5act..pil -th~e Anchornclc Tntcrn3t.ional. hirttol-?., 1'385. Dick, G.K., "I$ational Lirrport Systcn 1~1.ri11Entry Cr-iter-ia fox Gcnel-?.l Aviation Ajrportr,:," Hr,r;ca..r-cl~.~F~2 Proceedinns,. .- XX-1, pp. 481-87, Washington, DC, 1979. Fe.clcr-al Aviation Ad1:linistr-ation, p.n ?\r>t~wccigtion-of ttI.2 Social,~_E~~oni.c..~!r~~cLPol.itic:al Issu.~~of-Ccncy;~1 Avi at-ion, prcparntl by Fr-an): K. Smith, b;c+si~i.nql:orl,DC, June, 1977. Flol-idn Ucpsrtmcn'i oP Transportation, ~Jhcrt.billittea ?iun icit~al;\i.t:port Economic 1.r~act-kr;::ci:~mcnt.. Genesee/I:'ir~c~cr.J..aJ:c-?.?. Rcgionr!l. t'l::n,;i~,g Council, i.-Sc?l(lv to ~~Uct-cmiiric: -.... .- t~h-e~Ecancjin.1!:l~!!aC~.-offfft~:r? Gr.[xc (;I i cknia!~, liormnn J. , Ec~on.?Z.i~I:I-.i i: ;*.!><;1ysS!s of' Rc- .SV:;LBI:IF.: . >... -E>:plo~-:?~!;!,~j~>!:i ~~..l!>;]~L~.:~&i&li~i<~ :i110 ?<>ILC< &ll?l;ls.b:;, i;ei 'iork, i..c;tdc~nlc P!'css, 15'1'1. Ela'iional. Airport.$ co:>fc~renc:c,a_?-i>~~r.trL'cnr!opric lln~>~acv. [jniiier-:;ity of [?hodi: Is1and, I.'. CrC? U.S. I?c?pzrr!:icnt of Cns>c?-ci:, &~/GI~.?I :~rIp:l:.-O~~tl>Ili: Z?.cicu -Syyta, April, 122l. Wilbur S~nithAsr;ociates, B,:~I'.;.~?! T!:c! I;<:~~;,:.m_ir: I.I:IX?C'~of:... -ci-vil... ---Aviobiun on t!lg-tj.!. isc,June, 1<)8?.