Kingscote Airport Business Case Appendices - Kangaroo Island ...

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Kangaroo Island Futures Authority Draft Economic Impact of Agriculture and TourismThe previous equation can be extended to:(I-A)X = Ywhere (I-A) is termed the Leontief matrix,or X = (I-A) -1 Ywhere (I-A) -1 is termed the 'general solution', the 'Leontief inverse' or simply the inverse of theopen model.The general solution is often represented by:Z = (I-A) -1 = [z ij ]The I-O table can be 'closed' with respect to certain elements of the table. Closure involves thetransfer of items from the exogenous portions of the table (final demand and primary inputquadrants) to the endogenous section of the table (intermediate quadrant). This implies thatthe analyst considers that the transferred item is related more to the level of local activity thanto external influences. Closure of I-O tables with respect to households is common and hasbeen adopted in this project.The 'closed' direct coefficients matrix may be referred to as A * . The inverse of the Leontiefmatrix formed from A * is given by:Z * = (I- A * ) -1 = [z * ij]Z * is referred to as the 'closed inverse' matrix.A multiplier is essentially a measurement of the impact of an economic stimulus. In the case ofI-O multipliers the stimulus is normally assumed to be an increase of one dollar in sales to finaldemand by a sector. The impact in terms of output, contribution to gross regional product,household income and employment can be identified in the categories discussed below.(i)The initial impact: refers to the assumed dollar increase in sales. It is the stimulus or thecause of the impacts. It is the unity base of the output multiplier and provides the identitymatrix of the Leontief matrix. Associated directly with this dollar increase in output is anown-sector increase in household income (wages and salaries, drawings by owneroperators etc.) used in the production of that dollar. This is the household incomecoefficient h j . Household income, together with other value added (OVA), provide thetotal gross regional product from the production of that dollar of output. The grossregional product coefficient is denoted v j . Associated also will be an own-sector increasein employment, represented by the size of the employment coefficient. This employmentcoefficient e j represents an employment/output ratio and is usually calculated as'employment per million dollars of output'.(ii) The first round impact: refers to the effect of the first round of purchases by the sectorproviding the additional dollar of output. In the case of the output multiplier this is shownby the direct coefficients matrix [a ij ]. The disaggregated effects are given by individual a ijcoefficients and the total first-round effect by Σa ij . First-round household income effectsare calculated by multiplying the first-round output effects by the appropriate householdincome coefficient (h j ). Similarly, the first-round gross regional product and employmente c o n s e a r c hPage| 53
Kangaroo Island Futures Authority Draft Economic Impact of Agriculture and Tourismeffects are calculated by multiplying the first-round output effects by the appropriategross regional product (v j ) and employment (e j ) coefficients.(iii) Industrial-support impacts. This term is applied to 'second and subsequent round' effectsas successive waves of output increases occur in the economy to provide industrialsupport, as a response to the original dollar increase in sales to final demand. The termexcludes any increases caused by increased household consumption. Output effects arecalculated from the open Z inverse, as a measure of industrial response to the first-roundeffects. The industrial-support output requirements are calculated as the elements of thecolumns of the Z inverse, less the initial dollar stimulus and the first-round effects. Theindustrial support household income, gross regional product and employment effects aredefined as the output effects multiplied by the respective household income, grossregional product and employment coefficients. The first-round and industrial-supportimpacts are together termed the production-induced impacts.(iv) Consumption-induced impacts: are defined as those induced by increased householdincome associated with the original dollar stimulus in output. The consumption-inducedoutput effects are calculated in disaggregated form as the difference between thecorresponding elements in the open and closed inverse (i.e. z* ij - z ij , and in total as Σ(z* ij -z ij ). The consumption-induced household income, gross regional product and employmenteffects are simply the output effects multiplied by the respective household income, grossregional product and employment coefficients.(v) Flow-on impacts: are calculated as total impact less the initial impact. This allows for theseparation of 'cause and effect' factors in the multipliers. The cause of the impact is givenby the initial impact (the original dollar increase in sales to final demand), and the effect isrepresented by the first-round, industrial-support and consumption-induced effects,which together constitute the flow-on effects.Each of the five impacts are summarised in Appendix Table 2.1. It should be noted thathousehold income, gross regional product and employment multipliers are parallel concepts,differing only by their respective coefficients h j , v j and e j .The output multipliers are calculated on a 'per unit of initial effect' basis (i.e. output responsesto a one dollar change in output). Household income, gross regional product and employmentmultipliers, as described above, refer to changes in household income per initial change inoutput, changes to gross regional product per initial change in output and changes inemployment per initial change in output. These multipliers are conventionally converted toratios, expressing a 'per unit' measurement, and described as Type I and Type II ratios. Forexample, with respect to employment:Type I employment ratio= [initial + first round + industrial support]/initialandType II employment ratio= [initial + production induced 7 + consumption induced]/initial7Where (first round + industrial support) = production induced.e c o n s e a r c hPage| 54
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PRELIMINARY ASSESSMENTKangaroo Isla
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Kangaroo Island Airport Upgrade Bus
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Document History and StatusRev Desc
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6 Terminal Building 166.1 Descripti
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1 Introduction1.1 Scope of ReportTh
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3 Future Development Scenarios3.1 S
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4 Site Investigations4.1 OutlineA s
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Coober PedyKingscoteAccordingly, a
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For aircraft landing to the north a
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Table 5-1New Pavement ThicknessesPa
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In this Study, allowance has been m
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An additional 20% of the gross area
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7 Landside Facilities7.1 Car Parkin
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This situation will require monitor
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8 Capital Costs Estimates8.1 Introd
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Table 8-2Pavement Element Compariso
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8.4.3 Security Screening CostsIn ad
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Appendix AKingscote Airport - Curre
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Appendix CCalculations Terminal Bui
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Appendix DCapital Cost Estimates Sc
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Kingscote Airfield ReviewKangaroo I
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Kangaroo Island Airport Upgrade Bus
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CONTENTSContents ..................
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Kangaroo Island Futures Authority D
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