Differential Economic Impacts for Cooperative Business Structures: An Application to Farmer-Owned Cooperatives in New York State

Abstract

A comprehensive economic impact assessment using input-output methods is developed to account for localized spending activities and distributions of residual earning to member owners by cooperatives. The framework is applied to agricultural supply, service, marketing, farm credit, and rural electric cooperatives doing business in New York State. Detailed spending patterns from cooperative survey data reveal that agricultural cooperatives in the state have higher levels of localized spending when compared to average industry firms using aggregate industry data and equivalent levels of direct industry output. Accordingly, total economic impacts for these cooperatives; i.e., the direct, indirect, and induced effects, are larger. Overall, agricultural cooperatives contribute 7%, 3%, and 10% more total impact with respect to jobs, labor income, and output in New York State. Limitations to the enumeration of total impact to local economies are discussed and directions for future research that encompass more than current economic impacts are proposed.

Keywords: Economic Impact, Cooperatives, Spending Patterns, Patronage Refunds, Input Output

JEL Classification: C67, D57, Q13, R15