Estimation of a Regional Income Multiplier Using Primary Data: Economic Impact Assessment of a Major Investment on a Local Economy

Cox, Fiona Elizabeth

Abstract

Over the last century, there has been great interest in the formulation and estimation of income multipliers at regional and sub-regional level to guide the decisions of planners and policy makers. However, the literature expressly highlights a lack of practical guidance for undertaking such assessments which has led to frequent ‘recycling’ of data, in lieu of more appropriate alternatives. Findings from such studies are therefore often accompanied with notes of caution, on the grounds that further work is required to improve the estimation of coefficients.
This research, therefore, seeks to contribute to the construction of more appropriate data sets and their use to measure economic impacts by way of a Keynesian Multiplier model. For this purpose, it uses the recent Siemens Gamesa and Associated British Ports investment in a blade manufacturing facility in Hull as a case study. There is a particular intention to advance data collection practices, and subsequently highlight the way in which primary data can be used to estimate more robust and granular multiplier values, together with suggestions for further practitioner insight.
In addition to providing a new and comprehensive dataset of current saving and spending propensities for the Humber sub-region, the research goes on to estimate first round and subsequent round multiplier values and reveals the extent of variation in first round by various sub-groups within the Siemens Gamesa sample. This is done using regression analysis to estimate marginal propensities to import from outside the sub-region and is supported by a scenario and sensitivity analysis to assist user judgement.
Finally, as a standalone contribution to the main investigation, the new primary dataset is used to contribute to the discussion on returns to education using the Mincerian earnings function and is also used to assess the determinants of homeownership in the Humber.

Citation

Cox, F. E. (2020). Estimation of a Regional Income Multiplier Using Primary Data: Economic Impact Assessment of a Major Investment on a Local Economy. (Thesis). University of Hull. https://hull-repository.worktribe.com/output/4912993

• Thesis Type: Thesis
• Deposit Date: Nov 12, 2024
• Publicly Available Date: Jun 2, 2025
• Keywords: Economics
• Public URL: https://hull-repository.worktribe.com/output/4912993
• Additional Information: Department of Economics; Business School; University of Hull
• Award Date: May 1, 2020