Economic output

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Economic impact (economic effects) of urban planning developments, security threats and security measures may be viewed in terms of economic output such as business output, wealth, total employment, etc.


Literally, economic output can be defined as "the productivity of a country or region measured by the value of goods and services produced"[1]. Economic output, though, can also be regarded as the 'measurable' part of the economic impact of an investment project or security threat, since the statistical and economic models used to measure the economic impact are based on simplified versions of the truth, and hence not perfectly capable to measure the complete economic impact[2].


The models economists use to measure the impact of a spatial development project or security threats are based on the (measurable) effects of different types of economic output. Since these types of output are of essential value in the calculations and are not without limitations, it is relevant for the urban planner to gain insight in the different types of economic output used in order to be able to make well-balanced decisions when it comes to security threats, security measures and urban development projects in general.

Types of economic output

  • Household income (or aggregate personal income) is a type of economic output of the combined incomes of all people sharing a particular household or place of residence. "It includes every form of income e.g., salaries and wages, retirement income, near cash government transfers like food stamps, and investment gains"[3].Since household income as a output measure, does not include business profits and public income/expenditures, household income does not cover the whole economic impact of urban developments or security threats.
  • Wealth is a reflection of both the current income and possessions that have the potential to generate future income (such as real estate property). This is a broader definition than "monetary wealth", which is referring to anything that can be bought and sold on a market[4].
  • Business output, as a type of economic output, refers to the volume of sales by a company. It reflects the sum of gross business revenue, including the costs of labour and materials, as well as the business profits (the net business income. Business output, as a output measure is broader than, for example, the total employment or household income, but does not distinguish between an economic activity that generates a higher or a lower value added like the Gross Value Added measure does.
EU GDP 2007
  • Gross Value Added is a type of economic output that measures the contribution to the economy of each individual producer, industry or sector[5]. It reflects the sum of corporate profits, income due to work, etc. in a specified region. Even though Gross Value Added is widely regarded as the most appropriate measure of impact on overall economic activity in a geographical area, it should be noted that there is a risk of over-estimating the true economic impact due to the fact that this measure does not take account where the business owners and employees live.
  • Gross Domestic Product refers to the market value of all final goods and services produced within a region or country in a given period. The gross domestic product of a country is the sum of consumption[6], investments, public expenditures and net export.
  • Total employment is a type of economic output that refers to the amount of persons in the labour force who are either having a job or are being entrepreneurs. In case of a development project it reflects the number of additional jobs created by economic growth. Total employment is the most popular and well-known measure of economic impact because it is relatively easy to comprehend. Total employment as a output measure, however, does not necessarily reflect the quality of employment opportunities and, moreover, cannot easily be compared to the public costs of attracting jobs through public grants, public investments, etc. [7].
  • Public income is income generated by the public authorities and is a type of economic output. By far the most important form of public income are taxes. Other forms of public income are returns on investments in the private sector and the revenues of for example natural resources (gas, oil, gold, and so on).
  • Public expenditures is the value of goods and services bought by the public government and its articulations[8] and is a type of economic output.

Limitations of economic output measures

It is important to note for urban planners that the economic output (as a tool) is an estimation of the real economic impact of urban planning projects, security threats and security measures. An estimation, because these effects are so complex and subject to time and place, that it is impossible to measure them perfectly.

Below we list some other limitations of economic output measures. With this information in mind urban planners are (hopefully) better equipped to interpreted economic studies related to Securipedia subjects.

  • The various measures of economic impact are overlapping[9].
  • The public income and expenditures are included as economic output while they could be considered to be "˜financial output".
  • Social impact "includes the valuation of changes in amenity or quality of life factors (such as health, safety, recreation, air or noise quality)"[7]. Some economic tools (e.g., Social cost-benefit analysis|social cost-benefit analysis), however, still try to attempt to quantify these social impacts, but there are limits to quantify, for example, quality of life. Therefore, economic output measures are by definition different from the broader social impact measures.

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Footnotes and references

  1. Online:
  2. A famous example is the problem of causality: Did the investment lead to an increase in economic activities or the other way around?
  3. Wikipedia. Online:
  4. Business Dictionary. Online:
  5. Sources: Wikipedia. Online:, and the Office of National Statistics in the UK.
  6. Consumption is the value of goods and services bought by people. Consumption is most of the time the largest component.
  7. 7.0 7.1 Weisbrod, B. and G. Weisbrod (1997): Measuring economic impacts of projects and programs. Economic Development Research Group).
  8. Economicwebinstitute. Online:
  9. An increase in business activity, for example, will generate income for its employees, profit for its owners and tax income for the public authorities. For this reason, the different measures cannot be added together to calculate the total economic impact. Source: Weisbrod, B. and G. Weisbrod (1997).