Guidance on Appropriate Use of Economic Impact Models
Economic impact models are frequently used to inform high-visibility policy, business, and community decisions. While these tools can provide valuable insight, they are also vulnerable to misuse when assumptions, scope, or limitations are not clearly understood or communicated. My work in this area focuses on establishing guidance that supports responsible, defensible use of economic impact analysis.
The challenge
Economic impact results are often asked to carry more weight than they are designed to support. Common challenges include:
- Treating scenario-based results as predictions or guarantees
- Applying models outside their appropriate geographic, temporal, or institutional context
- Overstating aggregate impacts without discussing assumptions or sensitivity
- Communicating results to non-technical audiences without adequate caveats
These issues create risk not only for individual analyses, but for the credibility of organizations that rely on economic modeling in public or strategic settings.
My role and approach
In my role at IMPLAN, I develop guidance and best practices that help users apply economic impact models appropriately and communicate results responsibly. This work emphasizes judgment, transparency, and alignment between analytical methods and decision context.
Key elements of this approach include:
- Clarifying appropriate and inappropriate use cases for economic impact models
- Emphasizing the role of assumptions and model structure in shaping results
- Encouraging scenario framing rather than predictive interpretation
- Supporting clear, accurate communication of results to decision-makers and stakeholders
The focus is not on limiting use of the models, but on ensuring they are used in ways that support informed and defensible decisions.
What this work supports
This guidance supports organizations and practitioners working in:
- Public policy analysis and evaluation
- Economic development and community impact assessment
- Business location, expansion, and investment decisions
- Stakeholder reporting and public-facing communication
By establishing clearer guardrails, this work helps reduce misuse, manage reputational risk, and improve the quality of decisions informed by economic analysis.
Why this matters
Technical sophistication alone does not ensure responsible use of economic models. Without clear guidance, even well-intentioned analysis can be misinterpreted or overstated, undermining trust in both the results and the institutions presenting them.
This work reflects my broader view of applied economics:
good analysis requires not only correct implementation, but disciplined interpretation and communication.