ANALYZING THE ECONOMIC IMPACT OF TRANSPORTATION PROJECTS USING RIMS II, IMPLAN AND REMI.

INTRODUCTION The early parts of this new century confront public transit managers and planners with unparalleled demands. There are more completing interests for the finite transit dollar, and an increasing need to complete comprehensive transit project economic impact analysis, project accountability studies and alternatives assessments. Elected local, state and federal representative and executive branch policy makers as well as average citizens are increasingly asking, " What is the economic importance of this project? Or " How does this project (or alignment) compare with another competing transportation investment for the limited public transportation dollar? " Ultimately the question is " What 'bang' do I get for investment of this buck? " In order to answer this question, one requires a systematic analysis of the economic impacts of these projects and programs on the affected regions. The most commonly used tool for studying the impact of these projects is the input-output model. These models not only capture the direct effects of the project, but they also capture secondary indirect and induced effects. There are a wide range of commercially available input-output models that can be used to evaluate differing transit projects. They range from the relatively inexpensive and fairly simple U.S. Department of Commerce, Regional Input-Output Modeling System (RIMS II) 1 to the moderately priced and more complex Minnesota IMPLAN 2 input-output model. One may also opt for the most sophisticated and expensive integrated input-output-econometric model currently available for analysis of this type developed by Regional Economic Modeling, Inc. know as REMI 3. While the choice of models is complex, other use issues are also important to consider. In addition to selecting the appropriate input-output software, there are a number of technical issues to resolve. Among these are questions of: • What are the mechanics of applying RIMS, IMPLAN or REMI models? • What is a proper interpretation of the results of the model? • What is the difference between direct and indirect economic impact? • What are final demand multipliers and how do we evaluate and use them and how do they work in estimating economic impacts? • What do the final demand multipliers for output and earnings mean and how do we evaluate and use them and how do they work in estimating economic impacts? • How do we compare the outcome of each proposed project with every other competing project? 1 See for example " Regional Multipliers: A user …