Economic Impact Analysis: Indiana State Fair Edition
Today's local economic impact analysis comes courtesy of Inside Indiana Business, reporting on an analysis done by an economist at Indiana University's Kelley School of Business:
The Indiana State Fairgrounds contributed $124 million in direct spending to the Indianapolis economy in 2011 according to a study conducted by Indiana University’s Kelley School of Business...“It’s a significant impact,” Bruce Jaffee, the study’s author, said. “This is ‘new money’ that – without the fairgrounds and its various year-round events – would not be spent in the Indianapolis economy.”
According to the U.S. Department of Commerce's Bureau of Economic Analysis, the gross regional product of the Indianapolis metropolitan area in 2010 was $105 billion. So the Indiana State Fair "added" 0.12% to the local economy. Indiana's gross state product was $245 billion, so that impact was 0.05% of the state's gross product...actually, probably much less than that. I'd guess that most of the non-local visitors to the Indiana State Fair came from the rest of Indiana...
In isolation, $124 million sounds impressive, and I absolutely am not saying that Indianapolis would not experience some loss if the State Fair vanished. But, in context, the Fair is not a significant part of local economic activity.
And, again, almost no individual piece of the local economy is, in and of itself, going to have a large direct impact. But it's precisely for that reason that studies like this, which make (I think) too much of an individual piece are so miseading.