Primary economic impact

Primary economic impacts are the initial, immediate economic output generated by an urban planning process. Put differently, they are the goal of urban planning in terms of economic functionality. Primary impacts form a precondition for the secondary economic impacts, since each urban development project will not only generate effects on the targeted markets, but also on other markets.

Definitions

Primary economic impact

In the context of the urban planning process, primary economic effects are defined as the initial, immediate/direct economic output generated by a specific urban development project. They are in essence limited to the owner(s) and user(s) of the specific urban object.

Temporary versus permanent primary impact

In the realization phase, an urban planning development will lead to temporary and permanent primary economic impacts. The construction of a utility plant, for example, will generate a temporarily demand of labour and construction supplies, including services. Once the utility plant is finished, it will lead to permanent primary output in the form of benefits for both the owners of the utility plant (revenues) and the customers of the utility plant (resources).

Examples of primary economic impact

A sustainable highway

An engineering company developed an integrated solution to reduce motorway emission and noise problems in an urban environment. It consists of a motorway canopy made of cold-bendable laminated glass, and its solar cells produce clean energy for the environment. The primary economic impacts generated by this sustainable highway consist of:

• Construction costs (including security measures)
• Maintenance costs (glass construction and the road)
• Avoided investments (e.g. air pollution measures)
• Reduction of travel time and travel costs
• Traffic flow effects*Sustainable energy effects (due to the solar panels and the warmth generated by cars)
• Real estate effects (alongside the sustainable highway)
• External effects such as safety effects, environmental effects and local noise and emission effects

The construction costs are the bulk of the investment costs, and the reduction of travel time will generate the bulk of the economic revenues. The realization of The Sustainable Highway will also generate positive economic impacts due to its capability to generate sustainable energy and to reduce the environmental pollution, emission and noise. The impacts on safety, the environment and the local emissions are referred to as external effects, which are in some cases included in economic studies, especially in countries where indicators are available that translate these external effects into monetized variables.