NIGA 2018 Annual Report

MULTIPLIER AND TOTAL IMPACT This analysis is primarily based on an input/output modeling structure. There are three primary types of multipliers used in this analysis: Employment, Income and Output. Employment multipliers identify the total change in the number of jobs in each of the associated areas of employment for each direct job or unit volume in payroll generated by the primary subject of the analysis. Income multipliers represent the total dollar valued change in the income or earnings of households employed by all the industries for each dollar of payroll expended by the primary subject of the analysis. Output multipliers represent the total dollar change in all industries that results from a dollar change in output delivered to final demand by the subject of the analysis. Technology, geography, inter-industry linkages or leakages of output, localization and other criteria affect value of the multipliers. An I-O model offers a glimpse of the economy, detailing the sales and purchases of goods and services between all sectors of the economy for a given time within a conceptual framework derived from economic theory. The activities of all economic agents (industry, government, households) are divided into numerous production sectors. The transactions between the sectors are measured in terms of dollars and segmented into two broad categories: non-basic, which includes transactions between local industries, households and other institutions, and basic, which includes transactions between industries, households, and other institutions outside the economy being modeled (i.e., imports and exports).

How it works: Indian casinos purchases paper from the office supply store, the office supply store purchases employee uniforms from a local clothing store, the clothing store pays a local cleaning service to clean the store, and so on. Each round of inter-industry purchases generates fewer local effects until all the money originally spent leaks out of the region. This is typically referred to as the multiplier effect or the ripple effect. Local purchases of labor work in the same manner, with workers spending their incomes on all manner of goods and services such as food, clothing, school, housing, and visits to the doctor. The sum of the direct, indirect and induced effects equals the total economic impact. Estimates of indirect and induced impacts were prepared by the Dupris Consulting Group, LLC., using multipliers from the Regional Input/output Modeling System (RIMS II) maintained by the U.S. Department of Commerce’s Bureau of Economic Research as well as a software package called IMPLAN. Multipliers are derived mathematically from empirical data pertaining to specific geographies, industries and other attributes of economic systems.


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