Cultural Economics: Economic Impact Analysis of a New Museum

ECO 4340 WORKSHEET #1 ECONOMIC IMPACT ANALYSIS OF A NEW MUSEUM Year 1 PV of Only Each year $ Flows Construction costs $ 25,000,000 Museum Employment 75 average earnings $ 40,000 Museum supplies paid to suppliers $ 100,000 Museum utility costs 50,000 For each dollar of wages food 0.25 clothing 0.10 recreation 0.05 household goods 0.10 transportation 0.20 Assume: > In each year, the monetary flows from museum activity are the same (no inflation) > The appropriate social discount rate is 2%. Find: 1. The present value of the perpetuities for each type of financial flow. 2. The dollar amount each type of impact Direct impact: Indirect impact: Induced impact: 3. Total impact