Integrating hard-to-measure externalities into the evaluation of local economic development projects

This paper seeks to illustrate that within a systematic and reproducible evaluation framework there is room for subjective inputs based on local experience and knowledge. A spreadsheet model for evaluating economic development projects is presented which also evaluates 'neighbourhood spillover impacts' generated by local economic development projects. These spillover effects - visual impacts in the neighbourhood, investor confidence and so on - are classified and characterised and a quantitative index is constructed in order to gauge the magnitude of their impact. Two hypothetical case studies are presented to suggest the trade-offs between monetary benefits and neighbourhood effects.