Monday, March 22, 2010

You Have To Take The Net With the Gross!

When answering his question about why most experts believe the ImPlan methodology is best for economic impact, I explained to a friend that “it is more conservative.” He abruptly responded “why would you want to do that” and refused to participate in a study.

He may fall prey to one of the methodologies still used by a very few old school feasibility consultants to tell their clients what they want to hear. Kind of like some appraisers who ask you what you want for your house? Not sure that’s what the lender has in mind for appraisal.

Good consultants no longer do that nor do good appraisers but unfortunately for local government, project promoters rarely reveal which is being used or the difference.Implan Chart

Our City and County typically asks DCVB to vet these studies now, if not to crunch the numbers, and I hope they continue to do that.

The difference between the two methodologies is that ImPlan nets out leakage among other things and it takes into account the specifics of a community. It is also important to note diversion based on the fact that rarely do consumers change their budget allocations, just because another opportunity in a certain category becomes available.

Shelly Green, the CEO at Durham’s official marketing agency, working with information developed by DKS and IHS Global Insights, has developed a chart (click to enlarge the image above) that demonstrates both the gross and net when it comes to the economic impact of visitors on Durham.

The illustration is now circulating the globe as another best practice innovation for Durham.

No comments: