{"id":768,"date":"2021-08-05T14:28:03","date_gmt":"2021-08-05T14:28:03","guid":{"rendered":"https:\/\/crp.trb.org\/uat\/acrp0358\/?page_id=768"},"modified":"2022-08-04T15:15:46","modified_gmt":"2022-08-04T15:15:46","slug":"measuring-changes-in-regions-economy-and-its-economic-strength","status":"publish","type":"page","link":"https:\/\/crp.trb.org\/acrpwebresource12\/measuring-air-service-and-regional-economic-activity\/measuring-changes-in-regions-economy-and-its-economic-strength\/","title":{"rendered":"Measuring Changes in a Region’s Economy and Its Economic Strength"},"content":{"rendered":"\n
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Measuring Changes in a Region’s Economy and Its Economic Strength<\/h1>\n\n\n\n
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Defining the Region<\/h2>\n\n\n\n

Regional economies are generally based on a core resident population of some size that conducts economic and social activities. The U.S. federal government (and its statistical agencies like the Bureau of the Census or Bureau of Labor Statistics) use standardized definitions for political-economic regions. Socioeconomic data are collected and reported for these defined statistical areas, although the scope and detail of data vary across each type of statistical area.<\/p>\n\n\n\n

Airport staff commonly think about the region served by an airport in terms of its catchment area. However, a region\u2019s economy likely does not correspond with that catchment area, and governments do not measure or count data in a way that corresponds exactly with a catchment area.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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Metropolitan Statistical Areas (MSAs)<\/strong><\/h3>\n\n\n\n

One type of statistical area that is commonly used in regional analyses is the MSA. These are U.S. regions containing at least one urbanized area with a minimum population of 50,000<\/a>. Depending on the particular circumstances of a regional economy, the MSA may be an appropriate representation of regional economic activity relevant to an airport. In other cases, the airport may not serve any MSAs or may serve a larger economic region, such as multiple MSAs or multiple cities.<\/p>\n<\/div>\n\n\n\n

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Combined Statistical Areas (CSAs)<\/strong><\/h3>\n\n\n\n

Airports serving a larger geographic region may be more appropriately linked to CSAs, which are larger regions that have social and economic ties and complement MSAs. Examples of CSAs include not just the mega-urban centers of the Northeast like greater Boston (the CSA incorporates Worcester and Providence) or greater New York City (which stretches from Connecticut to Pennsylvania), but also other multi-airport regions like Phoenix-Mesa and Norfolk-Virginia Beach. In many areas, socioeconomic data at the CSA level provide a better linkage between the airports and the regions they serve.<\/p>\n<\/div>\n<\/div>\n\n\n\n

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IMPORTANT NOTE<\/strong>: Economic data at the regional or sub-state level (as opposed to state or national data) can provide insight that is more directly linked or relevant to an airport\u2019s catchment area. However, regional economies are not the same as an airport\u2019s catchment area, and they do not always entirely overlap one another. For instance, an airport\u2019s catchment area may span multiple regional economies or, conversely, it may only partially serve one regional economy.<\/p>\n\n\n\n

Similarly, economic data based on conventional statistical area datasets may not fully capture airport-centered economies because they don\u2019t necessarily match well with the geography of airport-driven economic activity (especially if the airport and related economic activity are located in more suburban or rural areas). In these cases, it may be worthwhile for analysts to consider geographic information system (GIS) software and geodatabase applications that can allow them to assess economic data based on user-defined geographic areas (such as the complete catchment area of the airport).<\/p>\n<\/div>\n<\/div>\n\n\n\n

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What Are the Basic Measures?<\/h2>\n\n\n\n

Certain measures are fundamental in defining an economy and, in turn, are important for understanding any industry\u2019s role in that economy. At heart, these basic measures refer to the residents that make up the local community and, therefore, conduct economic activities. These measures include the following:<\/p>\n<\/div>\n<\/div>\n<\/div><\/div>\n\n\n\n

Economic Output (or Economic Activity)<\/h4>
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Economic output is the dollar value of the production of new goods and services including intermediate goods and services. It is a much broader measure of the economy than gross domestic product (GDP). Gross output can also be measured as the sum of an industry’s value-added (similar to GDP) and intermediate inputs.<\/p>\n<\/div><\/div>\n\n\n\n

Employee Earnings<\/h4>
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Employee earnings are the wages, salaries, and benefits earned by employees associated with the activity that is being examined.<\/p>\n<\/div><\/div>\n\n\n\n

Employment<\/h4>
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Employment is the number of jobs or employees (or some other measure of labor such as full-time equivalent) associated with the activity that is being examined. Employment is a common indicator measured in economic impact analyses of airports as it provides a sense of scale about an activity or operation that is easily understood by a broad audience.<\/p>\n<\/div><\/div>\n\n\n\n

Gross Domestic Product <\/h4>
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Gross domestic product (GDP) is a measure of the dollar value of final goods and services produced locally as a result of economic activity. This measure is the net of the value of intermediate goods and services used up to produce the final goods and services.<\/p>\n<\/div><\/div>\n\n\n\n

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Other basic measures focus more directly on the scale of economic activity within the region, including the following:<\/p>\n<\/div>\n<\/div>\n\n\n\n

Consumer Spending<\/h4>
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Sometimes known as personal consumption expenditures, consumer spending statistics show the goods and services purchased by, or on behalf of, people living in the United States.<\/p>\n<\/div><\/div>\n\n\n\n

Disposable Personal Income<\/h4>
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Disposable personal income is the income available to persons for spending or saving. It is equal to personal income less personal current taxes.<\/p>\n<\/div><\/div>\n\n\n\n

Per Capita Income<\/h4>
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Per capita income is the mean income computed for every man, woman, and child in a particular group including those living in group quarters. It is derived by dividing the aggregate income of a particular group by the total population in that group.<\/p>\n<\/div><\/div>\n\n\n\n

Personal Income<\/h4>
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Personal income is the income received by, or on behalf of, all persons from all sources. These sources include participation as laborers in production, ownership of a home or business, ownership of financial assets, and transfers from government and businesses. Personal income does not include realized or unrealized capital gains or losses. <\/p>\n<\/div><\/div>\n\n\n\n

Productivity<\/h4>
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There are two types of productivity measured, labor and multifactor productivity. Labor productivity measures output per hour of labor and multifactor productivity measures output per unit of combined inputs, which consist of labor and capital.<\/p>\n<\/div><\/div>\n\n\n\n

Tax Revenues<\/h4>
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Some economic impact studies provide estimates of the tax revenue associated with an airport\u2019s activity at the federal, state, and local levels. This can include income and payroll taxes of employees, sales taxes, taxes on air tickets, corporation taxes, and other forms of taxation and government charges. Tax revenues accruing to local and state governments are often considered an important measure for airports because it reinforces the idea that commercial aviation activities contribute to the region\u2019s financial well-being.<\/p>\n\n\n\n

Note: Tax revenues are a component of employment earnings, GDP, and economic output.<\/p>\n<\/div><\/div>\n\n\n\n

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IMPORTANT NOTE:<\/strong> Context is important when assessing any measure of a region. To help contextualize the meaning of a given measure, it can be helpful to:<\/p>\n\n\n\n