Economic Impact Analysis

Economic impact analysis examines how markets and the broader economy react to changes in public policy and investments. For markets, impacts might include changes in prices, capacity additions or retirements, or the fundamentals of supply and demand. For the broader economy, impacts might include job creation or losses, and changes in GDP, household income, and demographics.

KR Business Consultants has strong expertise in applying both market and macroeconomic models across a range of industries from energy and environmental to healthcare, infrastructure, and manufacturing. The expertise, suite of tools, analyses, and deliverables that we provide are used by clients to formulate their strategic plans and to educate key stakeholders – policymakers, regulators, the media, and the public – on the benefits and costs of their plans when determining the best course of action.

Our Service Offerings

Common Modeling Tools
Airports and Infrastructure
Carbon Markets and Pricing
Electricity and Natural Gas Modeling
Environmental Regulations
Federal and State Fiscal Policy
Greenhouse Gas (GHG) Footprints
Healthcare Reform
Labor Economics (Minimum Wage)
Manufacturing Sector Impacts
Pipelines and Construction

Common Modeling Tools

One of KR Business Consultants guiding principles of economic impact analysis is to be transparent and to avoid using “black box” models. We therefore apply third-party, peer-reviewed models and update them with the most recent data from public sources. Our customized models are built from the same models and sources. By applying a suite of “objective” models in our analyses, we shift the conversation away from model choice towards inputs and assumptions.

The list below describes several of the modeling tools that KR Business Consultants typically deploys. Additionally, we often use them in concert and integrate them together – addressing the economic and environmental aspects of projects and policies in a consistent framework:

IMPLAN – an input-output (IO) model that determines the direct, indirect, and induced effects of construction or spending on a regional economy
REMI PI+ – a computable general equilibrium (CGE) model that determines the long-term economic and demographic effects of policy at the regional and national levels
PLEXOS – a simulation model of the North American natural gas and electricity markets, including their interactions, prices, capacity, and generation
CARAT – the Carbon And Regional Analysis Tool, developed by KR Business Consultants, assesses the GHG footprint of an industry, nationally or regionally, including its supply chain and labor inputs
CTAM – derived from the Annual Energy Outlook (AEO), CTAM forecasts GHG emissions at a regional level and assesses the fiscal and cost effects of carbon pricing

Airports and Infrastructure

KR Business Consultants can assess the impact of the current operations of airports or other major transportation hubs, the impact of capital investments to expand and improve them, and the benefits gained to the general economy through operations that are more efficient and improve access.

Carbon Markets and Pricing

KR Business Consultants experts have extensive experience in modeling carbon pricing (such as the AB32 cap-and-trade in California and carbon taxes across several other jurisdictions) and their impacts on the economy, specific industries, government budgets, and regional and national environmental quality.

Electricity and Natural Gas Modeling

With PLEXOS, KR Business Consultants is able to forecast impacts to electric generation and transmission and natural gas upstream and midstream activities. Our analysis provides information to investors, regulators, policymakers, and the public about the impacts associated with projects, regulations, and policy changes.

Environmental Regulations

KR Business Consultants is able to show the impact of changing regulations for the energy industry, the manufacturing sector, and the general economy. Our experts have assessed the impact of criteria air pollutants as well as biofuel policy.

Federal and State Fiscal Policy

KR Business Consultants is equipped to determine the economic impacts and the impacts to specific industries from budget shocks. Our consultants have applied both REMI PI+ and IMPLAN to model the impacts of major fiscal matters such as the “fiscal cliff” and federal “sequestration.”

Greenhouse Gas (GHG) Footprints

With our CARAT tool, KR Business Consultants has the most up-to-date and detailed (in terms of industry and regional granularity) model for GHG footprints and contributions available. KR Business Consultants has previously applied CARAT towards the GHG contributions of the motion picture industry in California and nationally.

Healthcare Reform

Healthcare is 17.5% of GDP and accounts for over 20 million jobs in the United States. Government programs also make up over 50% of healthcare expenditures. This makes healthcare a vital fiscal and macroeconomic concern, and KR Business Consultants has the tools to assess impacts on the sector.

Labor Economics (Minimum Wage)

KR Business Consultants experts have conducted a first-of-its-kind impact study on $12 and $15 minimum wages at the state and city levels. With higher minimum wages proposed nationally, KR Business Consultants can assist clients with understanding the economic consequences of their region in terms of employment, GDP, personal income, and tax revenues.

Manufacturing Sector Impacts

KR Business Consultants understands the importance of the manufacturing sector to the economy. Our experts have written white papers about the manufacturing renaissance and members of the economic impacts team have worked for major chemical manufacturing firms. Our analyses pay special attention to this crucial sector, and we utilize the industry detail of the REMI and IMPLAN models (up to 160 industries in REMI, 536 in IMPLAN, most being in manufacturing trades) to examine the nuances of the economic impacts on manufacturing.

Pipelines and Construction

KR Business Consultants often assesses the implications of natural gas pipeline developments to power generators and energy consumers. We have examined how pipelines affect the economy of states and counties for private groups, stakeholders, and governments.