Secondary economic impact - Revision history

Albert at 17:42, 10 January 2018

2018-01-10T17:42:07Z

John P: /* Crime */

2013-10-28T11:33:30Z

Crime

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2013-10-28T11:32:11Z

Crime

John P: /* Crime */

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Crime

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 [[Category:Economic]]
-[[File:ae.png|25px|right|This is a page providing background in a specific field of expertise]]'''Secondary (indirect) economic impact''' are changes in economic activity resulting from subsequent rounds of (re-)expenditure(s) of business companies, households and public authorities directly involved with the specific program/project or security event and trade partners who are indirectly involved (the outsiders). The source of these 're-expenditures' lies in the [[Primary economic impact|primary economic impact]] generated by a program/project or security event. Secondary economic impact is a frequently used category of [[belongs to::economic impact]].
+[[File:ae.png|25px|right|This is a page providing background in a specific field of expertise]]'''Secondary (indirect) economic impact''' are changes in economic activity resulting from subsequent rounds of (re-)expenditure(s) of business companies, households and public authorities directly involved with the specific program/project or security event and trade partners who are indirectly involved (the outsiders). The source of these 're-expenditures' lies in the [[Primary economic impact|primary economic impact]] generated by a program/project or security event. Secondary economic impact is a frequently used category of [[economic impact]].
 ==Description==
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 == Examples of secondary economic impact ==
-These examples are closely related to the provided examples in the page on the [[is caused by::Primary economic impact#Examples of primary economic impact|primary economic impact]].
+These examples are closely related to the provided examples in the page on the [[Primary economic impact#Examples of primary economic impact|primary economic impact]].
 ==== Crime ====

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 * impact on quality of life/social capital
-According to Tita, Petras and Greenbaum (2006)<ref>Tita, G., T. Petras, and R. Greenbaum (2006): Crime and Residential Choice: A Neighbourhood Level Analysis of the Impact of Crime on Housing Prices. Journal of Quantitative Criminology. Vol 22, No 4, Pp 299-317.</ref> “crime serves as an important catalyst for change in the socio-economic composition of communities. The effect crime has on the local property value is one of those catalyst effects. A study by Ihlanfeldt and Mayock (2009)<ref>Ihlanfeldt, K., T. Mayock (2009): Crime and Housing Prices. Department of Economics and DeVoe Moore Center, Florida State University</ref>, for example, concludes that a 10 percent increase in violent crimes within a neighbourhood is reducing property values by as much as 6 percent. Other research points out that criminal offences such as vandalism and graffiti (also) have a significant negative impact on real estate prices<ref>Gibbons, S. (2004): The costs of urban property crime. The Economic Journal. No 114 (499). ISSN 0013-0133.</ref>. Furthermore, in 2011, a [http://www.police.uk/ UK police website], where users can view the number of criminal offences at street level, led to worries among house owners and real estate agents that the house prices drop if crime rates are relatively high<ref>King, M. (2011): Online crime maps could drive down house prices, warn property analysts. The Guardian. Online: http://www.guardian.co.uk/money/2011/feb/01/police-crime-website-house-prices</ref>.
+According to specialised economists Tita, Petras and Greenbaum (2006)<ref>Tita, G., T. Petras, and R. Greenbaum (2006): Crime and Residential Choice: A Neighbourhood Level Analysis of the Impact of Crime on Housing Prices. Journal of Quantitative Criminology. Vol 22, No 4, Pp 299-317.</ref> “crime serves as an important catalyst for change in the socio-economic composition of communities. The effect crime has on the local property value is one of those catalyst effects. A study by Ihlanfeldt and Mayock (2009)<ref>Ihlanfeldt, K., T. Mayock (2009): Crime and Housing Prices. Department of Economics and DeVoe Moore Center, Florida State University</ref>, for example, concludes that a 10 percent increase in violent crimes within a neighbourhood is reducing property values by as much as 6 percent. Other research points out that criminal offences such as vandalism and graffiti (also) have a significant negative impact on real estate prices<ref>Gibbons, S. (2004): The costs of urban property crime. The Economic Journal. No 114 (499). ISSN 0013-0133.</ref>. Furthermore, in 2011, a [http://www.police.uk/ UK police website], where users can view the number of criminal offences at street level, led to worries among house owners and real estate agents that the house prices drop if crime rates are relatively high<ref>King, M. (2011): Online crime maps could drive down house prices, warn property analysts. The Guardian. Online: http://www.guardian.co.uk/money/2011/feb/01/police-crime-website-house-prices</ref>.
 Another effect of crime is that residents become less committed to their communities, causing the ‘social fibre’ of the community to be weakened. An example of the loss of social capital is that residents of neighbourhoods with a criminal reputation are judged to be associated with criminal activities, leading (amongst others) to stigmas that, for example, prevent those people from finding jobs<ref>UNODC and World Bank (2007): Crime, Violence, and Development: Trends, Costs, and Policy Options in the Caribbean. Report No. 37820.</ref>.

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 ==== Crime ====
 [[File:Crime.svg|thumb|Crime]]
-Crime not only leads to financial or physical damage and prevention costs, but also indirectly influences the local/regional and national economy of a country. According to Detotto and Otranto (2010)<ref>Detotto,C. and E. Otranto (2010): Does crime affect Economic growth? KYKLOS, Vol.63–August 2010-No.3, 330-345.</ref>,“crime acts like a tax on the entire economy: it discourages domestic and foreign direct investments<ref>Foreign direct investment (FDI) is a direct investment by a business or enterprise in a foreign economy. The motives of FDI are diverse, for example, to reduce export costs (less transport and export tariffs) or to take advantage of local labour forces and know-how.</ref>. On a macro-economic level crime influences:
+Crime not only leads to financial or physical damage and prevention costs, but also indirectly influences the local/regional and national economy of a country. According to crime economists Detotto and Otranto (2010)<ref>Detotto,C. and E. Otranto (2010): Does crime affect Economic growth? KYKLOS, Vol.63–August 2010-No.3, 330-345.</ref>,“crime acts like a tax on the entire economy: it discourages domestic and foreign direct investments<ref>Foreign direct investment (FDI) is a direct investment by a business or enterprise in a foreign economy. The motives of FDI are diverse, for example, to reduce export costs (less transport and export tariffs) or to take advantage of local labour forces and know-how.</ref>. On a macro-economic level crime influences:
 * economic growth;
 * income;

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 * impact on quality of life/social capital
-According to Tita, Petras and Greenbaum (2006)<ref>Tita, G., T. Petras, and R. Greenbaum (2006): Crime and Residential Choice: A Neighbourhood Level Analysis of the Impact of Crime on Housing Prices. Journal of Quantitative Criminology. Vol 22, No 4, Pp 299-317.</ref> “crime serves as an important catalyst for change in the socio-economic composition of communities. The effect crime has on the local property value is one of those catalyst effects. A study by Ihlanfeldt and Mayock (2009)<ref>Ihlanfeldt, K., T. Mayock (2009): Crime and Housing Prices. Department of Economics and DeVoe Moore Center, Florida State University</ref>, for example, concludes that a 10 percent increase in violent crimes within a neighbourhood is reducing property values by as much as 6 percent. Other research points out that criminal offences such as vandalism and graffiti (also) have a significant negative impact on real estate prices<ref>Gibbons, S. (2004): The costs of urban property crime. The Economic Journal. No 114 (499). ISSN 0013-0133.</ref>. Furthermore, in 2011, a [http://www.police.uk/ UK police website], where users can view the number of criminal offences at street level, led to worries among house owners and real estate agents that the house prices drop if crime rates are relatively high<ref>See: http://www.guardian.co.uk/money/2011/feb/01/police-crime-website-house-prices</ref>.
+According to Tita, Petras and Greenbaum (2006)<ref>Tita, G., T. Petras, and R. Greenbaum (2006): Crime and Residential Choice: A Neighbourhood Level Analysis of the Impact of Crime on Housing Prices. Journal of Quantitative Criminology. Vol 22, No 4, Pp 299-317.</ref> “crime serves as an important catalyst for change in the socio-economic composition of communities. The effect crime has on the local property value is one of those catalyst effects. A study by Ihlanfeldt and Mayock (2009)<ref>Ihlanfeldt, K., T. Mayock (2009): Crime and Housing Prices. Department of Economics and DeVoe Moore Center, Florida State University</ref>, for example, concludes that a 10 percent increase in violent crimes within a neighbourhood is reducing property values by as much as 6 percent. Other research points out that criminal offences such as vandalism and graffiti (also) have a significant negative impact on real estate prices<ref>Gibbons, S. (2004): The costs of urban property crime. The Economic Journal. No 114 (499). ISSN 0013-0133.</ref>. Furthermore, in 2011, a [http://www.police.uk/ UK police website], where users can view the number of criminal offences at street level, led to worries among house owners and real estate agents that the house prices drop if crime rates are relatively high<ref>King, M. (2011): Online crime maps could drive down house prices, warn property analysts. The Guardian. Online: http://www.guardian.co.uk/money/2011/feb/01/police-crime-website-house-prices</ref>.
 Another effect of crime is that residents become less committed to their communities, causing the ‘social fibre’ of the community to be weakened. An example of the loss of social capital is that residents of neighbourhoods with a criminal reputation are judged to be associated with criminal activities, leading (amongst others) to stigmas that, for example, prevent those people from finding jobs<ref>UNODC and World Bank (2007): Crime, Violence, and Development: Trends, Costs, and Policy Options in the Caribbean. Report No. 37820.</ref>.

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 In case of a focus on the re-expenditures by households, economists in general call these effects '''[[Induced effects|induced economic effects]]'''. Employees of companies and public organisations, for instance, earn wages that are spend on food, clothing, shelter and other consumer goods and services. This leads to further indirect transactions throughout the economy.
-The relationship between one form of economic activity and the total additional activity generated by a specific policy or event are called the [[Input-output analysis#Multiplier effects|'''multiplier effect''']]. The term multiplier is used since the indirect and induced impacts make the overall economic impact substantially larger than the direct impacts alone<ref name="ftn9"> Source: B. and G. Weisbrod (1997): Measuring economic impacts of projects and programs. Economic Development Research Group.</ref>. For example: If a major regional plant closes due to e.g. a terrorist event/threat, not only people working at this factory will lose there jobs/income, but also supporting industries are hurt by the indirect effects, and in the end, the entire local economy will suffer due to the reduction in regional household income, tax revenues and business profits.
+The relationship between one form of economic activity and the total additional activity generated by a specific policy or event are called the [[Input-output analysis#Multiplier effects|'''multiplier effect''']]. The term multiplier is used since the indirect and induced impacts make the overall economic impact substantially larger than the direct impacts alone<ref name="ftn9">Weisbrod, B and G. Weisbrod (1997): Measuring economic impacts of projects and programs. Economic Development Research Group.</ref>. For example: If a major regional plant closes due to e.g. a terrorist event/threat, not only people working at this factory will lose there jobs/income, but also supporting industries are hurt by the indirect effects, and in the end, the entire local economy will suffer due to the reduction in regional household income, tax revenues and business profits.
 == Welfare effects versus secondary effects==