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How much does military spending add to Hawaii's economy? / James Hosek, Aviva Litovitz, Adam C. Resnick ; prepared for the Office of the Secretary of Defense.

by Hosek, James R.

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Santa Monica, CA : Rand Corporation, 2011.

United States. Department of Defense -- Appropriations and expenditures -- Economic aspects.

United States -- Defenses -- Economic aspects.

Hawaii -- Economic conditions.

Electronic Resource

Electronic Version: Publisher's web page for this book, including scanned depiction of full text and images: http://www.rand.org/content/dam/rand/pubs/technical_reports/2011/RAND_TR996.pdf

9780833052674 (pbk.) :

0833052675 (pbk.)

Technical report (Rand Corporation) ; TR996.

xvii, 52 p. : ill. (some col.) ; 28 cm.

Preface -- Figures -- Tables -- Summary -- Acknowledgments -- Abbreviations -- Introduction -- Defense personnel in Hawaii and their earnings -- Defense procurement in Hawaii -- Economic modeling -- Conclusions -- Appendixes -- References.

This report assesses the relationship between defense spending in Hawaii and the levels of output, employment, and earnings in Hawaii's economy. The presence of defense activity in Hawaii is significant, but how much does it add to Hawaii's economy? We collected data on defense expenditures on personnel and procurement and estimated the relationship between these expenditures and the levels of output, employment, and earnings in Hawaii's economy. The analysis uses an input-output model for Hawaii that describes the relationship among industries and final demand. DoD expenditures in Hawaii during FY 2007-2009 averaged $6.5 billion per year in 2009 dollars - $4.1 billion for personnel and $2.4 billion for procurement. These expenditures were associated with $12.2 billion worth of Hawaii's output, 18 percent of Hawaii's 2009 GDP, and 101,000 jobs. We considered the sensitivity of the estimates to a number of factors, including undercounting or overcounting defense procurement, Hawaii state taxes paid by defense personnel, the savings rate of defense personnel, Impact Aid to Hawaii schools, spending by afloat and deployed personnel, and procurement by commissaries and exchanges. Most factors made little difference, but the savings rate of personnel and where the earnings of afloat and deployed personnel are spent could decrease the results by approximately 10 percent.

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