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Economic Analysis: Theory and Practice
 

Problems and variants of multiplier effects calculation when implementing the program-and-project-based approach to integrated socio-economic development of municipalities

Vol. 15, Iss. 5, MAY 2016

PDF  Article PDF Version

Received: 21 December 2015

Received in revised form: 9 March 2016

Accepted: 16 March 2016

Available online: 18 May 2016

Subject Heading: ECONOMIC ADVANCEMENT

JEL Classification: R11, R15

Pages: 41-53

Lavrikova Yu.G. Institute of Economics of Ural Branch of RAS, Yekaterinburg, Russian Federation
k515l@mail.ru

Suvorova A.V. Institute of Economics of Ural Branch of RAS, Yekaterinburg, Russian Federation
gotika.bell@mail.ru

Kotlyarova S.N. Institute of Economics of Ural Branch of RAS, Yekaterinburg, Russian Federation
sv_gavrilova@mail.ru

Importance The article considers the specifics of determining the multiplier effect parameters. The measurement enables to use a rational approach to evaluation of projects focused on integrated socio-economic development of municipalities.
Objectives The key objective of this study is revealing the specific features and options for evaluating the multiplier effect to define both direct and indirect results of business performance.
Methods We reviewed and analyzed different methods of calculating the multiplier factor (based on identification of marginal propensity of society to consumption, a retrospective analysis, and the 'input-output' model).
Results We determined the algorithm of actions to evaluate the results of economic activity, i.e. identification of sectors, industries and areas that are affected by the implementation of the process being evaluated; selection of parameters and indicators to be measured in the course of the study; calculation of the multiplier factor (it can be significantly complicated by imperfect methods of calculation and insufficient statistical information). We also described approaches to determining the multiplier coefficient. It allowed us to estimate the multiplier effect from the specific project, i.e. creation of antimony processing plant in Degtyarsk, and substantiate its importance for the economic system.
Conclusions Calculating the multiplier effect enables to make informed decisions on specific social and economic project implementation (through taking into account direct and indirect results of activities).

Keywords: calculation, multiplier effect, project, municipalities

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