Local multiplier effect
The local multiplier effect (sometimes called the local premium) refers to the greater local economic return generated by money spent at locally-owned independent businesses compared to corporate chains or other absentee-owned businesses. Localisation advocates cite the multiplier effect as one reason for consumers to do more of their business locally.
Two U.S.-based entities have published studies measuring the local multiplier. Civic Economics a for-profit economic consultancy has undertaken studies in Austin, TX, San Francisco, CA; Chicago, IL and Western Michigan. The Institute for Local Self-Reliance, a non-profit organization, executed a study looking at much smaller communities in the Central Coast of Maine.[1]
References
- ^ Index of relevant studies by the Institute for Local Self-Reliance, Civic Economics created by New Rules Project
External links
- Summaries of various studies on the multiplier effect, compiled by the New Rules Project
- Thorough explanation of the multiplier effect (distinguishing direct, indirect and induced impacts) by the American Independent Business Alliance
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