A Cornell University team has found that the economic impact of the apple industry in New York State is 21 percent larger than traditional models suggest. Researchers used the apple industry as a case study to test a new — more precise — framework for economic impact analysis.
Traditional economic impact analyses often rely on secondary state and national data, which can give a distorted picture of how an agricultural industry will affect a local economy. The new model uses locally sourced data showing what farmers are spending their income on and where.
“If the analysis has implications for private or public local economic development initiatives, the more accurate the numbers, the better,” said Todd Schmit, lead author of the study. “Collecting local data is really hard, it’s costly, it’s time consuming. The flip side is, in most cases, that’s time and money well spent.”
In a related report, the team found every $1 of apples or apple products sold in New York state generates an additional 58 cents spent in related industries, such as support services and supplies. Every apple industry job generates an additional 0.48 jobs, and every $1 of direct apple-industry gross domestic product generates an additional $1.14 in GDP from related business activity in the state. In total, the apple industry supports more than $2 billion in industry output and nearly 12,000 jobs.
The model can assess the economic impact of any agricultural sector, said Schmit, associate professor in the Charles H. Dyson School of Applied Economics and Management.
Depending on the agricultural sector being assessed, the model may not show an increase in economic impact, as it did in the case study. But, Schmit said, it will offer a more accurate analysis. “When you’re trying to extract a particular industry from an aggregate of multiple industries,” he said, “I would expect you’re going to get bigger differences.”