BOONE, N.C. — Appalachian State University was awarded nearly $98,000 in grant funding from the North Carolina Policy Collaboratory to conduct studies that analyze the economic impact of COVID-19 on the Northwestern North Carolina region. The grant was administered by App State’s Center for Economic Research and Policy Analysis (CERPA).
For these analyses, the grantees — CERPA Director Dr. Ash Morgan, a professor in the Department of Economics; and Jason Hoyle, a CERPA senior research associate — used an input–output model to measure the total economic impacts resulting from COVID-related business closures and operation interruptions in Ashe, Avery, Caldwell, Watauga and Wilkes counties.
Over 30% of all jobs in the regional economy come from the retail and accommodation/food sectors — creating 16% of regional wages, according to Morgan. Many of these nonessential businesses, including hotels, restaurants, bars and retail establishments, are located in economically important areas of the studies’ five-county region.
Morgan explained the input–output model examines “financial flow data” — businesses’ accounting data and the spending patterns for households of particular income levels — to determine the interdependences, or connections between various sectors within a regional economy.
This model, Morgan said, serves as an essential tool, as it captures both the immediate, or direct impacts (lost business revenue or consumer spending), and the secondary effects of business interruptions and lost consumer spending on the region’s supply chain. A supply chain is the network of individuals, technology, resources, organizations and activities involved in the creation, distribution and sale of products and services.
“By capturing the direct and secondary impacts, the output from these models will provide total economic impacts in the form of lost gross regional product, employment levels, earned labor income and local/state taxes,” Morgan said.
Preliminary reports released in May, which were completed by Morgan and other CERPA economists, showed COVID-related restaurant and bar closures in April alone cost the Northwestern North Carolina region an estimated $52.4 million in lost gross regional product, or those goods and services produced in the region.
According to Morgan, this $52.4 million loss translates into the regional economy losing more than 8,000 full-time jobs in the month of April (or the equivalent of losing 675 full-time jobs over a one-year period) and a corresponding $17.2 million in lost income for laborers.
The preliminary studies also showed the region’s reduced economic activity during April resulted in approximately $3.5 million in total lost sales tax revenue — $1.1 million of which would have been distributed to county and other local governments in the region.
Morgan and Hoyle’s work, which began in May, concluded in December. Results for each economic sector will be presented in the final reports to identify which industries have been affected the most.
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About the Research Institute for Environment, Energy, and Economics
Since 2008, Appalachian State University’s Research Institute for Environment, Energy, and Economics (RIEEE) has fostered interdisciplinary research on the environment, energy and economics, especially the areas in which these subjects intersect. The institute serves as an umbrella organization for three centers: the Appalachian Energy Center, Center for Economic Research and Policy Analysis (CERPA) and the Southern Appalachian Environmental Research and Education Center (SAEREC). The work supported by RIEEE is integrated into Appalachian’s academic programs, used to facilitate discovery among K-12 student students and teachers, and employed in the region’s economic development. Learn more at https://rieee.appstate.edu.
About the Department of Economics
The Department of Economics offers diverse courses that cover standard fields such as microeconomic and macroeconomic theory, labor, public finance, regional and development economics. The department is particularly strong in the areas of environmental and experimental economics. It offers the Bachelor of Science in business administration (B.S.B.A.) and the Bachelor of Arts (B.A.). Learn more at https://economics.appstate.edu.
About the Walker College of Business
The Walker College of Business at Appalachian State University delivers transformational educational experiences that prepare and inspire students to be ethical, innovative and engaged business leaders who positively impact our community, both locally and globally. The college places emphasis on international experiences, sustainable business practices, entrepreneurial programs and real-world applications with industry. Enrolling approximately 3,000 undergraduates in 10 majors and 175 graduate students in three master's programs, the Walker College is accredited by AACSB International – the premier global accrediting body for schools of business. Learn more at https://business.appstate.edu.
About Appalachian State University
As the premier public undergraduate institution in the state of North Carolina, Appalachian State University prepares students to lead purposeful lives as global citizens who understand and engage their responsibilities in creating a sustainable future for all. The Appalachian Experience promotes a spirit of inclusion that brings people together in inspiring ways to acquire and create knowledge, to grow holistically, to act with passion and determination, and to embrace diversity and difference. Located in the Blue Ridge Mountains, Appalachian is one of 17 campuses in the University of North Carolina System. Appalachian enrolls more than 20,000 students, has a low student-to-faculty ratio and offers more than 150 undergraduate and graduate majors.