Recently in Field Notes Category

At a recent Market Area Profile workshop in West Central MN, I was presenting results of a retail gap analysis done with 2002 economic census numbers (adjusted for inflation). Although I defended the results based on this dated information to some degree with the notion that consumption patterns do not change greatly over time, really the participants were right in looking for the most up to date information.

Luckily, 2007 Economic Census results were released this summer and provide a great view into the changing consumption patterns of the american public and the relative importance of american industries. You can access a quick look into the economic census results through their "Industry Snapshots":
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How has the per capita spending on used cars changed from 2002 to 2007? Are there more newsstands in 2007 than 2002? The answer is "no." Hopefully this goes beyond simple trivia about different industries, but instead becomes a quick resource we can share with those private businesses looking for some basic benchmarks or community members looking for some basic information on what's viable in their community. We'd rather our businesses and communities not invest in today's equivalent of a buggy whip plant, but those industries and store formats which will remain a viable part of today's economy.

New Technology Infrastructure; What is the Economic Impact?
By David A. Nelson
December 1, 2010

So it's been seventy years since the first electrical infrastructure installation in your County. Sixty years since the first telephone install. Thirty years since the cable tv was brought to the doorstep. Have you ever wondered what it would be like to try and install a similar, ubiquitous infrastructure in today's economy? Take a look at the economic impact of installing fiber-optic service to every home, farm, and business entity in Progresstown.
This Economic Impact Analysis focuses on the installation and operation of a technology utility. The utility delivers the "big three" to the front door including telephone, television, and internet. The labor requirement for excavation and construction of the lines are captured. The expenditures for lines, buildings, computers, and vehicle are captured. The daily operations of the IT services over its forty year life expectancy are captured.
On-the-other-hand Economic Impact Analysis is not the appropriate analytical tool for measuring the net impact or change in operations for the business, household, or farm. These collateral benefits are definite and significant yet incalculable in the IMPLAN model. The local business will expand the customer base online. The local farmer will make direct market contacts with the grain exchange on an hourly or minute-to-minute. Good stuff, just not part of the economic impact formula.
When a community is seeking information to make an informed economic development decision; the economic impact of the venture is second only to the feasibility study in terms of managing expectations and prudently caring for public resources.
 
In a 2010 study conducted by University of Minnesota Extension examining the economic impact of a proposed new Fiber-To-The-Home (FTTH) infrastructure to business and residence in Progresstown County, Minnesota it was found that:

• Output in the local economy is predicted to increase by $4,501,629 annually due to the daily operation of the facility/infrastructure.

• Employment in the study area is predicted to increase by 13 full and part time jobs annually due to the daily operation of the facility.

• Labor income in the local economy is predicted to increase by $600,099 annually due to the daily operation of the facility.

• The Telecommunications industry, the Service & Repair of non-residential industry, and the Food Service and Drinking industry will be the industries most significantly impacted due to the operation of the facility.

• Output in the local economy is expected to increase by $25,760,910 for two consecutive years due to construction of the facility/infrastructure.

• Employment in the study area is expected to increase by 288 full and part time jobs for one-two years due to construction of the facility.

• Labor income in the local economy is expected to increase by $10,633,119 for two years due to construction of the facility.

With the dollars allocated to me for membership in professional organizations, I have maintained a membership in the Agriculture and Applied Economics Association (AAEA). Within the organization, I am in the Community Economics Network (CENET) and the Committee on Women in Agricultural Economics (CWAE). As a result, I receive email updates regarding community economics at other universities. There are a couple of things I have been hearing lately, professional chatter, if you wish, that I would like to share.

First, agricultural and applied economics' departments across the United States are under tremendous pressure. In Nevada last spring, the Provost of the University of Nevada proposed closing the entire College of Agriculture and laying off all faculty in the Department of Resource Economics. Now just a few weeks ago, the Dean of the College of Agriculture at Clemson proposed disbanding the Agriculture Economics Department and sending the faculty to the economics and/or math departments depending on their qualifications.

In the string of emails discussing this, one person suggested that agriculture and/or applied economics is actually a subset of economics, and therefore, that perhaps all these programs should be covered within the economics department.

Agricultural economics departments have traditionally been part of the College of Agriculture, given their strong ties to agriculture. However, over time, agricultural economics has evolved into applied economics, covering a wide range of topics that are not necessarily related to agriculture. Thus, the question of the placement of the departments can start to feel legitimate.

I share this with my colleagues, so you can be aware of trends at the national level.

Second, you may or may not know, but Rob King with University of Minnesota's Department of Applied Economics, is the President-Elect of the AAEA.

Finally, in the spirit of our conversation last week about working with communities to help mitigate "shocks" to the community (could be construction, flood, etc), a potential session topic for the 2011 AAEA meeting is : Fiscal responses of rural/small communities to disasters and other emergencies. I will keep you posted if I hear of any research in that area. I thought it might dovetail nicely with some of our programs.