Economic impact refers to the effect that an event, policy, market change, or project has on the economy of a specific region, country, or sector. This impact can be measured in various forms, including changes in employment rates, income levels, business revenues, and overall economic growth. Economic impact assessments typically consider direct, indirect, and induced effects:
1. **Direct Impact**: The immediate economic effects resulting from an event or action, such as job creation or increased spending.
2. **Indirect Impact**: The secondary effects that occur when businesses that benefit directly from the initial event spend money and create additional jobs.
3. **Induced Impact**: The further effects that stem from employees spending their salaries, leading to additional economic activity.
Evaluating economic impact helps policymakers, businesses, and communities understand the potential benefits or consequences of their decisions, enabling informed planning and investment. It often involves the use of models to forecast outcomes based on various scenarios, helping stakeholders make strategic choices that maximize positive economic effects.