The Real Effects on the Boston Area of the 2004 Democratic
National Convention
Paul Bachman
John Barrett
Introduction
There have been many estimates of the economic impact
of the Democratic National Convention on the Boston economy. These estimations analyze the effects
from increased spending due to the influx of convention attendees. Absent from the analyses is the
negative impact arising from events being crowded out of Boston because of the
convention, such as Sail Boston 2004 and the U.S. Olympic gymnastic qualifying
event. In addition, the
negative impact of the congestion brought on by the closing of North Station,
I-93 and other road closures must be considered.
This economic activity will no longer occur because of
the Democratic National Convention therefore, this loss of economic activity
needs to be subtracted from the economic impact of the convention to ascertain the
net economic activity due to the convention. Table 1 below summarizes the details.
|
Table 1. Net Economic Effect
of Democratic National Convention |
||
|
Event/Closures |
Change in Direct Spending ($mill) |
Total Value Added ($mill) |
|
Event |
||
|
Democratic National
Convention |
113.1 |
121.6 |
|
Sail Boston 2004 |
-85.0 |
-95.6 |
|
U.S. Gymnastics Qualifying |
-13.39 |
-15.0 |
|
Lost Tourism |
-7.5 |
-8.6 |
|
Total Event |
7.2 |
2.4 |
|
|
||
|
Closures |
||
|
Closing I-93 and North
Station |
NA |
-23.8 |
|
Additional Road Closures |
NA |
-12.9 |
|
Net Economic Impact |
7.2 |
-34.3 |
Methodology
The IMPLAN model of the Boston metropolitan area was
used to determine the potential economic impact of the Sail Boston 2004 and U.S.
Olympic gymnastic team events that were crowded out because of the Democratic
National Convention. The estimated
additional direct spending for these events was $85 million for the Sail Boston
2004 event and $15 million for the US gymnastics team event.[1] The resulting value added, or extra
economic activity, from these events to the Boston area is $16.8 million for
the gymnastics event and $95.6 million for the Sail Boston 2004 event.
To compute the lost productivity of workers due to the
closing of I-93 and other roads around Boston we used the daily car count for each
stretch of road from the Massachusetts Highway Department. We assumed that 50% of this figure
would be commuters affected by the closing. This figure was multiplied by the average number of
passengers per car from the Texas Transportation Institute to arrive a figure
for the total number of commuters.
We assume that the commuters will, on average, lose 1 hour of productive
work time per day due to the traffic restrictions. These figures are multiplied together to provide us with the
total number of hours lost per day.
This result is then multiplied by the number of days (4) that traffic
will be restricted giving us a figure for the total hours of work lost. We then multiply this result by our
dollar figure for the average productivity per hour worked. This provides an estimate of the total
loss of productivity in dollar terms due to the road closings.
A similar method was used for the North Station
closing calculation. Assuming that
the 50% of the total number of daily North Station users are commuters, and
multiplying this number by our assumption that the average number of productive
hours each commuter will lose 1.5 hours of productive work time per day gives
us a figure for the total number of lost productive hours. This result is multiplied by the total
number of workdays North Station will be closed (5) to arrive at our total
number of hours of lost productivity.
By multiplying this result by our dollar figure for productivity per
hour worked gives us the final result of the total loss of productivity in
dollar terms due to the closing of North Station.[2]
Appendix 1
|
Table 2. Economic Impact of Closing I-93 and
North Station |
|
|
I-93 and other Road
Closures |
|
|
Total car count per day |
440,830[3]
|
|
Percent traveling after 4
p.m. |
50% |
|
Total |
220,415 |
|
Passengers per car |
1.25[4] |
|
Total |
275,519 |
|
Additional travel time (per
person) |
1 |
|
Total increase in travel
time (per day) |
275,519 |
|
Total work-days of closure |
4 |
|
Total hours of work lost
|
1,102,074 |
|
Productivity per hour |
$30.68 |
|
Total loss of
productivity |
$33,811,641 |
|
|
|
|
North Station (NS) |
|
|
Number of Commuters at NS
per day |
25,000[5] |
|
Percent affected by
convention |
50% |
|
Total |
12,500 |
|
Additional travel time (per
person) |
1.5 |
|
Total increase in travel
time (per day) |
18,750 |
|
Total work-days of closure |
5 |
|
Total hours of work lost |
93,750 |
|
Productivity per hour |
$30.68 |
|
Total loss of
productivity-North Station |
$2,876,250 |
|
Total loss of
productivity-I-93 |
$33,811,641 |
|
Total loss of productivity |
$36,687,891 |