Community decisions often involve economic consequences as well as social, environmental, health, and quality-of-life effects. Advocates may need to show how a proposed policy, program, development, or other action could affect public spending, household costs, employment, local businesses, community resources, or long-term economic stability. Economic analysis can help people understand tradeoffs, but it should not replace other important considerations such as fairness, rights, health, safety, environmental protection, or community priorities. What do we mean by economic benefit and harm? Economic benefit or harm refers to the financial and economic effects of a circumstance, action, program, or policy on individuals, households, organizations, businesses, government, or the wider community. These effects may include: Household income and expenses Employment and wages Business activity Public revenues and expenditures Housing costs and property values Health-care costs Transportation costs Education and workforce development Environmental effects with economic consequences Long-term community stability Not every important economic effect can be expressed easily in dollars. Health, environmental quality, time, stress, access to recreation, neighborhood stability, cultural resources, and other aspects of quality of life may have both economic and non-economic value. Community economic benefit or harm Communities need resources to provide public services and maintain infrastructure. Depending on the jurisdiction, those resources may come from: Property, sales, income, or other taxes Fees State or federal funding Grants Other public revenue Community economic health can be influenced by: Employment opportunities Wages and job quality Housing affordability Health and health-care access Education and workforce development Transportation Public infrastructure Environmental quality Cultural and recreational opportunities Business activity Public revenues A strong economy should not be defined only by the size of the tax base or the number of businesses in a community. Consider whether economic opportunities are stable, accessible, fairly distributed, and consistent with community health and well-being. Employment and workforce opportunities Jobs can provide economic benefit when they offer stable employment, appropriate compensation, safe working conditions, and opportunities for advancement. When evaluating employment effects, ask: How many jobs may be created or lost? Are the jobs full-time, part-time, temporary, or permanent? What wages and benefits are offered? Are local residents likely to qualify for or have access to the jobs? What training may be needed? What working conditions are involved? Health and environmental conditions Health and environmental conditions can have significant economic consequences. Poor air or water quality, unsafe housing, occupational hazards, or lack of access to health care can increase: Medical expenses Lost work or school time Disability-related costs Public expenditures Household financial strain Environmental protection can also support businesses and industries that depend on clean air, water, land, recreation, or tourism. Quality of life Economic analysis can include factors that influence whether people are able and willing to live, work, invest, or remain in a community. These may include: Housing Schools Transportation Safety Environmental quality Health services Recreation Cultural resources Childcare Community relationships Commercial economic benefit or harm Businesses may be affected by: Taxes and fees Regulation Workforce availability Transportation Energy and utility costs Customer demand Infrastructure Housing availability Environmental conditions Access to suppliers and markets A policy that creates costs for a business is not automatically economically harmful to the community as a whole. Some costs may be necessary to protect workers, consumers, public health, the environment, or other community interests. Economic analysis should therefore consider both private costs and broader public effects. Why demonstrate economic benefit or harm? Economic information can help community members and decision-makers understand the practical consequences of different choices. It can be especially useful when a proposal involves: Public spending Taxes or fees Employment Business activity Infrastructure Health-care costs Housing Education Environmental protection Economic evidence should be one part of the argument rather than a substitute for fairness, rights, community values, or evidence about health and safety. Different audiences may weigh these considerations differently. When should you demonstrate economic benefit or harm? Economic analysis may be particularly useful: When advocating for legislation or policy change When evaluating proposed legislation or policy When considering a public investment When evaluating a development proposal When comparing prevention with later intervention When examining environmental or public-health policies When evaluating community services When planning for long-term community development Prevention and early intervention Some preventive programs can reduce later public and private costs. For example, effective programs related to: Preventive health Education Housing stability Workforce development Substance use prevention and treatment Violence prevention may reduce more expensive needs later. Do not assume that prevention always saves money. Use evidence specific to the intervention, population, and setting, and distinguish between: Programs that save money overall Programs that produce benefits greater than their costs Programs that improve important outcomes even if they increase overall spending How do you demonstrate economic benefit or harm? A useful process includes: Researching the issue Identifying possible short- and long-term consequences Estimating costs and benefits Identifying who bears those costs and who receives the benefits Considering uncertainty and unintended consequences Communicating the findings clearly Do the research Economic advocacy should be based on credible and current information. Depending on the question, useful sources may include: Government data Academic research Program evaluations Public budgets Economic-impact studies Administrative records Community assessments Interviews with people affected Business and labor information Relevant technical expertise Look for evidence that challenges as well as supports your original position. Avoid using outdated figures or transferring cost estimates from another state, program, or population without checking whether they apply locally. Learn from other communities Experience elsewhere can provide useful information about possible outcomes. Ask: What happened compared with what was predicted? Who benefited? Who experienced costs or harm? Were there unexpected consequences? Did effects differ across populations? What would participants do differently? Differences in law, population, geography, cost of living, labor markets, and local institutions may limit how directly another community's experience applies to yours. Determine short- and long-term consequences Economic effects may unfold over very different timeframes. A transportation project may require substantial costs immediately but produce effects over decades. A workforce program may show some results within months while other outcomes take years. Define what short- and long-term mean for the issue you are studying rather than using a fixed timeframe. Consider unintended consequences Policies can have effects that were not part of the original plan. For example, a workforce-training program may be less effective if participants also face barriers involving: Foundational education or digital skills Childcare Transportation Disability access Language access Housing instability Rather than assuming participants failed because they were not capable of training, examine whether the program design addressed the conditions necessary for participation and success. Analyze who benefits and who bears the costs Economic effects are rarely distributed equally. Ask: Who receives the short-term benefits? Who receives the long-term benefits? Who pays the costs? Are costs concentrated among particular neighborhoods or populations? Are some benefits private while some costs are public? Could a policy widen or reduce existing economic disparities? Are people directly affected involved in evaluating the tradeoffs? Consider distribution, not only totals A policy can produce a net economic gain while still imposing serious costs on a particular population. For example, a development may increase total tax revenue while displacing residents or increasing housing costs. A complete analysis should therefore consider: Total economic effect Distribution of benefits Distribution of costs Effects on people with fewer resources or less decision-making power Whether mitigation or compensation is possible Make the economic connections Several areas may help reveal economic consequences. Public revenue Consider whether a proposal may affect: Property-tax revenue Sales-tax revenue Income-tax revenue Fees State or federal funding Include both possible increases and possible reductions in public revenue. Public expenditures Consider: Initial implementation costs Ongoing operating costs Administrative costs Enforcement or oversight costs Possible savings Costs that may shift from one agency or level of government to another Employment Look beyond the number of jobs. Consider: Job quality Wages Benefits Stability Worker safety Advancement opportunities Accessibility Effects on businesses Consider whether a proposal may: Create new business opportunities Increase operating costs Change customer traffic Affect supply chains Affect workforce availability Change demand for particular goods or services Household effects Economic analysis should also consider how policies affect household finances through: Housing costs Transportation Childcare Health care Utilities Taxes and fees Income Quality of life and community assets Some outcomes may not have a simple market price. Examples include: Clean air and water Parks and open space Community relationships Cultural resources Safety Time Health Avoid treating these effects as important only because they may attract businesses or raise property values. They may have value to community members in their own right. Evaluate uncertainty Economic forecasts are estimates, not guarantees. Predictions may depend on assumptions about: Inflation Population growth Employment Consumer behavior Interest rates Participation rates Program effectiveness State those assumptions clearly. When possible, provide a range or several scenarios instead of one precise number. For example: A lower-impact estimate A middle estimate A higher-impact estimate Be careful with return-on-investment claims Claims that a program saves several dollars for every dollar spent can be useful when supported by strong evidence. Before repeating such a figure, check: Who conducted the analysis Which costs were included Which benefits were counted Over what period Whether projected or actual outcomes were used Whether the population and setting are similar to your own Do not present an old or advocacy-generated estimate as a universal return for an entire category of programs. Economic analysis and fairness Economic efficiency is not the only standard for community decision-making. A proposal may produce a larger total economic benefit while placing disproportionate costs on a smaller population. Consider: Who has decision-making power Who receives the benefits Who bears the costs Whether rights are affected Whether existing inequities may increase Whether harm can be prevented, reduced, or compensated Economic benefit does not automatically justify serious harm to another group. Identify the audiences that need the information Different audiences may need different levels of detail. Depending on the issue, audiences may include: Community members People directly affected Elected officials Public agencies Businesses Worker organizations Funders Neighborhood organizations Researchers Journalists Avoid thinking of audiences simply as people to persuade. They may also identify weaknesses in your assumptions or raise legitimate costs that your analysis has not yet included. Communicate economic findings clearly Use language that is understandable without oversimplifying the analysis. Helpful practices include: Define technical terms Explain assumptions Use charts or tables where useful Distinguish estimates from observed results Identify the source and date of important figures Explain uncertainty Translate information when needed Make materials accessible to people with disabilities Use relevant communication channels Depending on the audience, communication may occur through: Community meetings Reports Briefing documents Local media Email Websites Social media Community organizations Multilingual media Use channels that actually reach the people who need the information. Use trusted messengers appropriately Community members, researchers, professionals, organizational leaders, workers, or people directly affected may help explain the findings. Do not select people merely because their identity will make the campaign appear more credible. Messengers should understand the evidence and participate voluntarily. In Summary Economic consequences are an important part of many community decisions. Advocates can help communities understand how policies, programs, developments, and other actions may affect households, employment, businesses, public budgets, health, the environment, and quality of life. Economic analysis should not be limited to whether a proposal makes or saves money. Consider short- and long-term effects, who receives the benefits, who bears the costs, and whether those effects are distributed fairly. Begin with credible research. Use current and locally relevant evidence where possible, and avoid repeating old cost estimates or return-on-investment claims without checking their source and applicability. Consider experience from other communities, but do not assume that the same results will occur under different economic, demographic, legal, or institutional conditions. Look for unintended consequences and conditions that may affect whether a program succeeds. Economic forecasts contain uncertainty. State assumptions clearly and use ranges or scenarios where appropriate rather than presenting estimates as guaranteed outcomes. Economic evidence should also be considered alongside fairness, rights, health, safety, environmental protection, and community priorities. Finally, communicate findings clearly and transparently. The goal is not simply to find an economic argument that will persuade people. It is to help communities understand the real tradeoffs involved and make better-informed decisions. Contributor Phil Rabinowitz Resources Online Resources The Economic Opportunity Institute offers articles, policy, and research on economic issues. The focus is on moving low-income families up to the middle class, and keeping middle and working-class families from sinking into poverty. The Economic Policy Institute offers research into achieving a "fair and prosperous economy." The Economic Security Project promotes advocacy and education on economic security for all. This site offers to help you with your advocacy research. The Open Directory Project offer articles, links, and resources on such economic topics as living wages, poverty, and income distribution. SWOT Analysis for NGOs provides information for completing an analysis of strengths, weaknesses, opportunities, and threats for NGOs. Tools and Resources for Assessing Social Impact – This website provides more than 150 tools, methods, and practices for analyzing the social impact of an organization’s actions.
