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5.0 Economic Impact of Land Use Change to <br />Protected Habitat <br />5.1 Overall Methodology <br />Economic impacts of the proposed Program occur as employment and income of households and <br />businesses are affected by the change in land use on 10,000 acres in the central Platte Region. <br />Economic models were developed and used to predict the impacts of potential land use changes <br />on the economy of the study area. A spreadsheet model was developed to evaluate the following <br />potential economic impacts associated with the proposed Program <br />Agricultural Production - Changes in total sales, employment and income (direct, <br />indirect and induced) to the study area economy from changing current and <br />expected agricultural land uses to protected wildlife habitat <br />Habitat Restoration and Management <br />income (direct, indirect and induced) to <br />and managing habitat complexes <br />- Changes in sales, employment and <br />the study area economy from restoring <br />Recreation - Changes in total sales, employment and income (direct, indirect and <br />induced) to the study area economy from a potential increase in recreational <br />activities on habitat lands (e.g. hunting, bird watching) <br />This section discusses the potential economic impacts of the Program on agriculture. The <br />economic impacts of increased habitat restoration and management and recreation are discussed <br />in Section 6.0 and Section 7.0. <br />A regional economic model divides the economic system into separate producing sectors. Each <br />sector sells output to final buyers such as consumers, governments and export buyers as well as <br />other sectors. Demands of consumers, governments or export buyers are often termed "final" <br />because the items purchased pass out of the production process. Other sectors may also purchase <br />final goods and services as well as labor, land and capital inputs used in a particular production <br />process. <br />The economic impact of a sector can be described in terms of changes in the direct, indirect and <br />induced sales, income and employment generated in the region due to the production of that <br />sector. Each sector must produce enough to meet the final demands as well as supply inputs to <br />other sectors. Therefore, changes in production of a primary sector not only affects that sector <br />but also other sectors indirectly. The direct, indirect and induced economic impacts are captured <br />by the regional economic model and for this study are described as follows. <br />Changes in production by those sectors directly affected by a land use change can <br />cause changes in direct sales, employment and 'income to proprietors and <br />employees of the sector(s). <br />Hwd.40210014.doc 5 -1 Third Parry Impact Study <br />Final Report <br />