Impact Factors: Methodological Standards for Applied Input-Output Analysis

Input-output economics, commonly referred to as economic impact analysis, is a common methodology to examine changes in local, regional, and national economies. Social Accounting Matrix (SAM) models are a more comprehensive form of input-output (I-O) models, though the term “I-O model” is frequently used to describe both. These models are used for a wide variety of purposes but are most often used for economic impact and economic contribution analysis. The field is brimming with studies by analysts with a loose understanding of the method to those following strict academic rigor. This paper outlines the best practices in conducting economic impact and contribution analysis to set standards for conducting these analyses. Using a thorough review of the literature and examining best practices from the field, a list of recommendations for conducting a robust economic impact and contribution analysis will be presented. It will include understanding model assumptions, analysis framing and methodology recommendations, and interpretation of results. This includes considerations when choosing a region of study, what type of event to examine, which values to include and exclude, using margins, when there is a need for a net analysis, how to accurately report results, and understanding reasonable multipliers.