In February of 2011, Governor Nathan Deal announced a nearly $20 million expansion of Pratt & Whitney’s Columbus Engine Center in Columbus, Georgia. Two economics majors have researched the impact of that expansion and will present their research to the Georgia State Legislature.

Majority Leader Larry O’Neal has requested that members of the House Economic Development Committee, Special Committee on Small Business Development and Job Creation, and the Ways and Means Committee attend a presentation of research findings by Mark Williams and Christopher Taylor, students in the School of Economics, on January 15, 2013.

Williams and Taylor spent their Senior Capstone course under Christine Ries, professor in the School of Economics, researching the Pratt & Whitney investment: $19.3 million spent on an expansion to retrofit a building, install new equipment, and overhaul the engine for the F177 – the power plant for the C-17 Globemaster III military cargo aircraft. Increased service capacity was projected to add about 180 new manufacturing jobs to the 300 already employed at the center, and the investment overall adds to Georgia’s growing preeminence in aerospace in an increasingly competitive and profitable global engine overhaul market.

The key first step of the students’ analysis was the assignment of a NAICS code to represent the industry characteristics of the Pratt & Whitney expansion.  Within the economic impact program, the NAICS code determines the size and direction of each step in the path of the ripple effect.  Most economic impact analysts choose the code that seems closest to the type of business under analysis; however, the Pratt & Whitney expansion is really a combination of the types of codes available in the NAICS system.  It is certainly an aerospace company, but this particular operation represents a service more than a manufacturing operation.

Williams and Taylor compared the analytical results achieved using different and various NAICS codes and compared these to their fuller understanding of the Pratt & Whitney business for this particular operation. In the end, their analysis is a much more accurate projection of the impact of the expansion on Georgia. Their work provides, through use of a complex and important industrial example, an important lesson in the use of economic impact analysis for public policy interpretation and use.