A Practitioner’s Guide to Conducting an Economic Impact Assessment of Regional Food Hubs using IMPLAN: a step-bystep approach

Interest is increasing in locating funding for food hub development. These local food aggregation and distribution businesses are purported by their developers and funders to elicit substantial positive community economic impact. Yet prior to the report released by Schmit, Jablonski, and Kay (2013), Assessing the Economic Impacts of Regional Food Hubs: the Case of Regional Access, there had been no rigorous economic impact assessments of food hubs, nor had a replicable framework been defined for their conduct. This practitioner’s guide is complementary to the full report, and walks you through the steps of measuring the local economic impact of expanding food hub activities, either from the establishment of a new hub or the expansion of an existing hub.

This guide is intended for individuals who are familiar with software and databases by IMPLAN Group LLC (IMPLAN provides data and tools for economic analysis). In addition to the data available from IMPLAN, the proposed approach requires substantial data collection from the food hub, farm and non-farm product suppliers to the food hub, and food hub customers. While time-consuming to collect, the information can be effectively used through the framework detailed here to assess the impacts of food hub activities, particularly in computing the value of inter-industry linkages within the local economy as a result of expanded final demand for food hub goods and services. We have included sample tables containing the type of data you will need to make the necessary modifications within the IMPLAN database.

Please note that this guide presents information about how to assess the economic impact of food hubs, which is different from looking at the contribution of food hubs to the local economy. Impact analysis examines the marginal economic impact of a change in the economy (e.g., the opening or expansion of a business). Contribution analysis examines the contribution of the business to the local economy. Given the likelihood that most readers of this guide will want to estimate the impact of foundation or government funding used to develop or expand an existing hub, we think that economic impact assessments are a more useful and accurate measure as they provide the net changes in new economic activity. Happy modeling!

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Todd M. Schmit & Debra Tropp

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