An Economic Impact Assessment (EIA) is a mathematically complex evaluation technique and multiplier effect used to calculate direct, indirect and induced (consumption) benefits of a project, program or policy on the economy of a specified region. An EIA is used to determine the impacts on regional employment, income and gross regional product (GRP) over time.
An EIA is different to a Cost Benefit Analysis (CBA) that analyses the cost of a project, program or policy verses the benefit/monetary return over time. A simple example of a CBA is comparing the cost of buying a rental property verses the rental income you will receive. However, an EIA determines the broader regional, state and national economic impact.
Use in Grant & Tender Applications
An EIA can be included in a CBA if you wish to determine the broader economic benefit of project, program or policy, and is often used by government to prioritises tax payer funded investment. For this reason EIA’s are often imperative in larger government funding and tender applications and infrastructure proposals, to help the assessor determine which applications offer the best return for tax payer dollar and should be funded.
*EIA’s are mandatory for Environmental Impact Statements (EIS)