Interstate 73 Economic Impact Analysis: A Summary and Synthesis

About the report:

The Transportation Planning Division (TPD) of the Virginia Department of Transportation (VDOT) is currently considering seven corridors along which VDOT may build the future Interstate 73. The division describes these seven routes and their variants in a report entitled Possible Interchange Locations/Potential I-73 Corridors (December 1993). The purpose of this technical assistance project is to estimate the impact that construction of I-73 along any one of these corridors would have on the state's economy. The project estimates the economic impact by two different methods. The first method, called the "Exits" method in this report, is undertaken in cooperation with the Virginia Employment Commission (VEC)'s Economic Information Services Division. A published study of development around the interchanges along I-95 in North Carolina forms the basis for predicting the number and types of business establishments that would be attracted to each interchange along each proposed corridor. VEC's IMPLAN computer model uses these predictions to forecast the impact on employment and income for each corridor under consideration. A separate fifteen-page report, An Economic Impact Analysis of the Potential Interstate 73 Corridors (VEC/EISD, February 1994), describes the first method and its results. The second method, called the "Dollar" method in this report, assigns a dollar value to the existing highway net in the localities affected by each of the corridors under consideration; the value is equal to estimated replacement cost. A productivity multiplier or "elasticity" value is selected from the range of such values estimated in recent research efforts. The magnitude of the projected cost for the future I-73 in comparison with the value of the existing road net, together with the chosen elasticity, determines for each corridor an estimate of the impact on taxable sales and adjusted gross income in each locality through which I-73 would pass, and an estimate of the impact on taxable sales and adjusted gross income in the state as a whole. A six-page report, Interstate 73 Economic Impact Analysis Part 2 (VDOT/VTRC, February 1992), describes the second method and its results. This third report summarizes the findings of this project. First it translates the forecasts from the first two reports into equivalent terms so that the forecast quantities can be compared. Next it discusses, and attempts to explain, the evident differences between the forecasts. Finally it suggests using a weighted average of the two sets of forecasts to create a best low-end, middle, and high-end forecast for each potential I-73 corridor from among the numbers generated. Tables V, VI, and VII attached to this report give the low, middle, and high forecasts of each potential corridor's impact on employment, total employee compensation, taxable sales, and adjusted gross income.

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