The case of the Crescent City Farmers Market:

At the end of all of this number crunching, what useful information will you possess? Here is what we found after completing two rounds of surveys during the summer of 2002:

From the results of two sampling periods, it appears that the three Crescent City Farmers Market locations attract an average of 2,190 visitors per week. These visitors appear to spend an average of $21.09 directly at the market and $6.89 at surrounding businesses, or a total of $46,190 at the market and $15,089 in the surrounding area each week. Since the market operates year-round (52 weeks) but is likely closed for a few holidays that land on market days, we can estimate 51 weeks per year of operation, giving annual totals of $2,355,690 for on-site sales and $769,539 at nearby businesses.

Next, we estimated appropriate multipliers for the two annual figures to reasonably gauge economic impact. Money is assumed to circulate in an economy but for that which is taxed or saved. A widely used economic impact multiplier is 2, which is based upon the notion that about half the money in a transaction goes to taxes (income and sales) and savings (1 + .5 + .25 + .125 + … = 2). This is considered to be a reasonable estimate for the spending at surrounding businesses. However, it is important to note that sales tax is not collected in most or all transactions at the farmers’ market (9.25%) and that these vendors, as small business people often involved in agriculture, are less likely to save than to re-invest in their businesses. (In Louisiana, food producers who market their products directly to consumers are exempt from collecting sales taxes, an exemption in place in most states.) The national savings rate is well below 5% (closer to 2%), so that an estimate that just 40% of the direct market transactions going to taxes and savings appears reasonable, with 50% in subsequent re-circulations in the general economy. This yields an economic income multiplier of 2.2 (1 + .60 + .30 + .15 + … = 2.2).

Thus, the total annual economic impact of the Crescent City Farmers Market is estimated to be ($2,355,690 x 2.2) + ($769,539 x 2) = $5,182,518 + $1,539,078 = $6,721,596.

For us, a small nongovernmental organization with an annual operating budget of less than $200,000, this economic impact figure is meaningful. We can make the case that we’re a highly efficient mechanism for cultivating local economic development. Whether your market is large or small, seasonal or year-round, food or antiques, we hope that you make good use of our Sticky Economy Evaluation Device.

Lastly, in order to satisfy the most difficult critics, we recommend contracting with the US Department of Commerce's Bureau of Economic Analysis. An official US governmental agency, they provide the service of determining the appropriate multiplier effect for your industry (most likely retail trade) in your region (counties or parishes). This service is not free; however, for the $200-$300 it costs, your research may garner the US Department of Commerce's seal of approval. They lend credibility to your research.

The Bureau recommended a multiplier of 1.8765 for our sector and region (instead of our more optimistic 2 and 2.2). Some regions are stickier than others when it comes to keeping dollars in local circulation. Our South Louisiana/Coastal Mississippi apparently is not. So, if we were to plug the Bureau's multiplier number into the equation above, then our final and credible figures look like this:

The total annual economic impact of the Crescent City Farmers Market is estimated to be ($2,355,690 x 1.8765) + ($769,539 x 1.8765) = $4,420,452 + $1,444,040 = $5,864,492.

Impressive numbers just the same. Will we feel comfortable to describe our estimated, combined annual economic impact at $6 million. The Bureau's methodology is perhaps ultra-conservative; and our own thinking perhaps to optimistic, so the accurate picture probably rests somewhere in between. For us, based upon this research we feel comfortable to throw around the $6 million number.