Economic Analysis Methods for Natural Resource and Environmental Policies

Economic analysis is an economic term related to a monetary quantitative analysis for a certain change. For instance, it traces the change in output in the monetary values through households and firms in the regional economy due to effects of upstream hydropowers at the MR in Southeast Asia. Economic analysis measures total effects of the monetary change. Total effects are the sum of direct effects, indirect effects, and induced effects. In the example of hydropower case, direct effects imply changes in economic activities (e.g. expenditures, hiring, etc.), while indirect effects refer to economic activities due to purchases by directly affected businesses. Meanwhile, induced effects relate to economic activities due to spending by workers of directly and indirectly affected businesses. An economic analysis measures monetary changes of these effects. A broad economic analysis requires a multiplier analysis to capture all direct, indirect, and induced effects in sectoral, regional, and national economy models.