I’m excited to share my latest study with Ph.D. student Caitlin Wilson, highlighting the significant economic impact of Delaware’s coastal regions.
Here are some key insights:
- The coastal economy has experienced unprecedented growth—5x faster than Delaware’s overall economy since 2011!
- The coastal economy supports a staggering 104,540 jobs across Delaware, which includes 30,510 jobs located outside of coastal areas.
- The state benefits from approximately $820 million in tax revenue derived from coastal activities.
- For every $100 in annual revenue generated in the coastal region, an additional $59 is earned throughout Delaware, totaling about $8.3 billion annually.
These findings underscore an essential truth: when we manage coastal risks, like flooding, more effectively, the entire state benefits. Many coastal challenges are best tackled at the state or regional level, and our recommendations aim to foster resilience and sustainable growth.
There’s a methodological contribution here too. Much work that does economic analyses makes some serious errors:
First, it will equating the economic contribution of a region or industry with its total revenue. But that double-counts anything where some value was first purchased elsewhere. The real benefit is called “value added”, and we make sure to show that throughout the report.
Second, it uses simple “multipliers” to find out the total contribution, when these are actually meant to describe changes in a sector or region. You can’t take the total economic output of a region and multiply it by an output multiplier, because that will include benefits that feed back into the region– and the region itself is no bigger than its observed to be. We use proper industry contribution analysis and multi-region IO modeling to handle this.
Third (the real contribution), is that it assumes that the every dollar has an equal contribution, down to the first one spent in the industry or region. But when we look at the Coastal DE economy 11 years ago, we can see that it had very different multiplier effects. The structure of the economy is always changing, and each dollar has a different marginal impact, and we can estimate these changing marginal impacts by using historical data.
For a deeper dive into our findings, check out the publication here: https://www.deseagrant.org/hazards#seaside-statewide.
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