Happy journalistic mischief

Economist Stephen Gordon had a great rule of thumb about economic impact reports.

Every economic impact study, ever:

1) Estimate costs
2) Estimate benefits
3) Add costs to benefits
4) Multiply by 2

— Stephen Gordon (@stephenfgordon) June 27, 2016

Wouldn't it have been fun if, instead of just doing a cut and paste from Otago University's press release on Otago University's massive economic impact, a reporter there would have checked if any academic economists in Otago University's economics department would vouch for the economic impact assessment.

As for the multiply by two rule, the press release says the direct spending by staff and students is $881.1 million, and the trickle-down effects get you to an overall $1.55 billion. Not quite two. So it looks more like "Estimate costs, multiply by 1.76" in this case.

The press release does not link to the cited report. It says the report was "released", but I couldn't find it anywhere on the university's website.

Like every other Economic Impact Assessment, though, it did its job. The newspaper reported the Really Big Number. Nobody's going to check. Nobody ever does. Mission accomplished.

In no way should this post be construed as an offer to provide QA on that Economic Impact Assessment.