A New Shortcut Method for Estimating Economic Base Multipliers

In: Regional science policy and practice: RSPP, Band 1, Heft 1, S. 67-84

Abstract

AbstractLocal and regional development practitioners continue to widely use economic (export) base analysis to assess the strengths and weaknesses of sub‐national economies. This paper proposes an alternative means for allocating the total employment of small regions into their basic (export‐oriented) and nonbasic (locally‐oriented) components, thereby allowing a shortcut calculation of the economic base multiplier. The new regression‐based method, which makes use of the Arizona Community Data Set, is designed to supplement, and possibly replace, the well‐known assignment, location quotient, and minimum requirements methods. Multipliers based on the four shortcut method are then compared over the time period 1980–2000. All estimates are based on a different data set comprised of nearly 200 communities located in the U.S. Southwest.