Economic Impact Studies: Instruments for Political Shenanigans?

Abstract

Most economic impact studies are commissioned to legitimize a political position rather than to search for economic truth. Often, this results in the use of mischievous procedures that produce large numbers that study sponsors seek to support a predetermined position. Examples are selected primarily from the reports of ostensibly expert consultants that illustrate 10 of these mischievous procedures: including local residents; inappropriate aggregation; inclusion of time-switchers and casuals; abuse of multipliers; ignoring costs borne by the local community; ignoring opportunity costs; ignoring displacement costs; expanding the project scope; exaggerating visitation numbers; and inclusion of consumer surplus. The political payoff of these shenanigans is discussed.