Two terms that sound alike, are constantly confused, and answer different questions. Using the wrong one overstates the case.
These two phrases get used interchangeably, and they should not be. The difference is not academic. Choosing the wrong one can double a number and mislead everyone who reads it.
An impact analysis measures new activity: the effect of a change. A new plant opens, an event comes to town, a project breaks ground. The study estimates the economic activity that exists because of that change and would not exist without it. The key word is new. Impact is about what a project adds.
A contribution analysis measures the total footprint of something that already exists: how large a role an industry, an institution, or an employer plays in the regional economy right now. A university, a hospital, a whole agricultural sector. The study captures everything that entity supports, whether or not it is new. Contribution is about how big a role something plays.
The trouble comes when a contribution number is presented as an impact. If a study reports the entire footprint of an existing employer and implies that all of it is at stake in a decision, or that all of it is new activity a subsidy would create, it overstates the case dramatically. The employer would exist regardless. Its full footprint is a fact about the present, not a return on a new investment.
Ask what decision the number serves. If you are weighing whether to approve, fund, or build something new, you need impact, measured against what would happen without it. If you are showing how significant an existing industry or institution already is, for advocacy or awareness, contribution is the right tool. Both are legitimate. Presenting one as the other is not, and a careful reader will catch it.
Project Red Team runs this kind of analysis for governments, developers, and businesses across the interior West. Tell us about the project and we will lay out what it takes to answer it, and what it costs.
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