Differential economic multipliers : an extension of Weiss and Gooding and an application to the Eastern Cape Province

• Main Author: Saxby, Gay Nelia
• Other Authors: Black, Philip
• Format: Dissertation
• Language: English
• Published: University of Cape Town 2016
• Subjects: Economics
• Online Access: http://hdl.handle.net/11427/16115

Bibliography: pages 63-65. === Economic impact assessment in its most general form is concerned with the identification and evaluation of the effects of a given change in an economic system on other parts of that system. This type of assessment may equally be applied to the effects of a complex economic policy on a country or region, as to the estimation of the impacts of a new manufacturing plant on employment and income in the immediate area. The purpose of this study is to develop a practically applicable differential multiplier model, which can be easily adapted to apply to a range of economic impact studies, and which is not constrained by the considerable data requirements of more complex models, such as the input-output model. The model that is developed allows for a certain amount of differentiation, such as that between skilled and unskilled workers, and carries this differentiation through all stages of the multiplier process. The basic difference between the regional and the national multiplier is the existence of additional leakages from the flow of income, particularly in the form of interregional imports. This model also takes account of the leakages at every link in the production chain, thus ensuring that the multiplier works on the actual value-added generated by a new investment project. By definition, the model focuses primarily on less complex forms of impact assessment, such as a new investment project in a local sub-region As an illustration of the manner in which such a model could be applied, it is used to estimate the impacts of a proposed zinc refinery and phosphoric acid plant project in the Eastern Cape province of South Africa.