Types of Economic Impacts

Using actual expenditures made by CSUN during the 2013/2014 academic year, Beacon Economics estimated the University’s economic impact on the local region (comprised of the four ZIP codes that make up the Northridge area), the County of Los Angeles, and California as a whole. This includes an analysis of employment, output, value added, wages and earnings, and tax effects for each area. Beacon Economics employed the IMPLAN modeling system.

IMPLAN’s Regional Economic Accounts and the Social Accounting Matrices are used to construct region-level multipliers that describe the response of the relevant regional economy to a change in demand or production as a result of activities and expenditures by CSUN. Each industry that produces goods or services generates demand for other goods and services, and this demand is multiplied through a particular economy until it dissipates through “leakage” to economies outside the specified area. IMPLAN models discern and calculate leakage from local, regional, and state economic areas based on workforce configuration, the inputs required by specific types of businesses, and the availability of inputs in the economic area. Consequently, economic impacts that accrue to other regions or states due to a change in demand are not counted as impacts within the economic area.

Beacon Economics’ analysis covers the primary areas of economic impact that will accrue due to CSUN’s expenditures: the direct employment, output, and value-added effects in the Northridge local area, the entire County of Los Angeles, and California as a whole; the indirect effects on all the industries whose outputs are used by the proposed investments; and the induced effects arising when employment increases and household spending patterns are expanded.