Modelling Economic Impacts in a Resource and Visitor Dependent Region: Tools for Local Decision-makers by

In addition to academic contributions, economic impact research can provide local decision-makers with important information about economic shocks to resource dependent regions. This paper examines how economic impact models can be made accessible at the community level. We highlight why economic impact models are popular with decision-makers and the challenges that were encountered. A number of economic shock simulations of local importance are presented using a six sector social accounting matrix (SAM) and a two sector computable general equilibrium (CGE) model. 1 Forest Social Science Researcher, Northern Forestry Centre, Canadian Forest Service, Edmonton, Alberta, Canada T6H 3S5 2 Assistant Professor, School of Forest Resources and Conservation, University of Florida, 365 Newins-Ziegler Hall PO Box 110410, Gainesville, FL 32611-0410 3 Senior Economist, Northern Forestry Centre, Canadian Forest Service, Edmonton, Alberta, Canada T6H 3S5 4 Research Assistant, Northern Forestry Centre, Canadian Forest Service, Edmonton, Alberta, Canada T6H 3S5 INTRODUCTION This paper examines the importance of economic impact models to local decision-makers in resource dependent communities. With increasing demands for public and local participation in resource decision-making, an understanding of the socioeconomic impacts on local economies is required. Also, decision-makers wish to understand the factors such as the increasing demand for recreation and growing environmental concerns or changes in markets that influence their local economy. We draw upon our research experiences in the Foothills Model Forest (FMF) in west-central Alberta, Canada in order to illustrate the applications of economic impact models in social science research. This paper is divided into four sections. First, the FMF and its socio-economic project are highlighted. Then we examine the potential for economic impact models to be a popular local decision-making tool. The third section highlights some of the challenges facing economists in the development of regional impact models. Finally, we provide some simulations using a social accounting matrix (SAM) and a computable general equilibrium (CGE) model. BACKGROUND As illustrated in Figure 1 the 2.7 million-hectare FMF encompasses Weldwood of Canada’s Forest Management Area (FMA), Jasper National Park, Wilmore Wilderness Area and various Crown lands including Switzer Park, Cache Pecotte Forest and several Crown Forest Management Units. Figure 1: Location of the FMF The FMF has a population of 28,680 (9,945 households) in the communities of Brule, Hinton, Jasper, and Robb, and rural households in the surrounding areas (Improvement District 12 and part of Improvement District 14) (Statistics Canada 1991).