http://www.times-news.com/articles/2005/07/23/sections/top_stories/top05.txt(Also posted to Flimsies; more there, free registration required)"The Western Maryland Scenic Railroad has a $5.4 million impact on Allegany County annually, according to a recent study commissioned by its board of directors."The point is there's been lots of speculation about what the value of the railroad is to the community," Charlie Amos said. "I think this answers that."Amos, president of the scenic railroad's board of directors, conducted a press conference at the Western Maryland Railway Station on Friday about the recently completed economic impact study. The railroad board and county commissioners jointly released the study that was conducted by Stone Consulting & Design Inc. of Warren, Pa. The railroad board paid for the $3,500 study.Of the $5.4 million benefit, the railroad has a direct impact of about $2.6 million with another $2.8 million from indirect services.Amos, who also served as the engineer on Mountain Thunder for the day's trip to Frostburg, said the railroad creates 190 full-time jobs, both directly and indirectly. Restaurants, hotels, motels and retail stores also are impacted by riders. Another "amazing" find is that 40 percent of the passengers who come to ride the train spend the night in Allegany County. The consultants, Amos said, commented the percentage was the "highest they've ever seen" when it comes to scenic railroads."[rant]Pardon me if I take this study with a grain of salt big enough to crush my foot. Nothing against the WMSR itself, but in my experience such studies are typically rife with grotesque exaggeration and basically tell the folks commissioning the study what they want to hear. I'm sure Brothers Levin and Superheater can point out dozens of examples of studies used to support government subsidy of convention centers, sports stadiums, hotels, museums, etc. (Dare I mention the discrepancies between Steamtown's alleged potential visitorship and its actual visitorship?) The discrepancies between promises and reality in these studies are usually so bad that if a private corporation did such number-crunching, they'd be charged with fraud (and have been--think Enron, WorldCom, etc.).Comments?[/rant]

Replying to your rant, the numbers don't look that far out of line to me. I've visted the WM scenic several time and for me, 1 night in a hotel $90, one breakfast at Denny's $10 (w/tip), one snack at the Depot coffee shop $3.50, one dinner at "When Pigs Fly" (great BBQ) $25 and one tank of gas $30 equals $158.50. Since ridership is around 23,000 and 40% spend the night, that's $1.45 million from the 40%. Deduct the hotel from the 60% and you have just shy of $1 million. Total, $2.4 million. Not too far off from the study's numbers of $2.8 million. Maybe if I'd bought lunch in Frostburg or a hat at the gift shop and factored that in, I'd have hit the $2.8 million mark!Now, the numbers thrown around a few years ago for the C&TS at $49 million in economic impact were probably stretched a bit!

Rant? Sandy? ;)First, Sandy, you may owe Randy Gustafson an apology . . . I tend to agree with Mike that the numbers look about right. Maybe even a little conservative.Economic studies use the same sort of "multiplier effect" that govern bank deposits and loans based on them. Mike's dollar spent at the Slumberland Motel is injected into the local economy - it pays the maid, who uses it to buy baby food, etc. None of that spending could take place without Mike's dollar. It's a real, quantifiable, phenomenon straight out of Econ101.Here's the actual C&TS language you reference. If I remember correctly (I didn't write this), the 7x figure came from the NM Department of Tourism, as the standard they use:Q. What is the economic impact of the Railroad on the region?A. As a major employer in Rio Arriba County and as a National Historic Site that draws over 100,000 visitors annually, the operation of the Railroad is the central reason for the economic revival of the Chama community. For instance, over 50% of the approximately 250 businesses in the Chama Valley and their employees are directly tied to the Railroad and tourist business. The Railroad is a unique historic resource for New Mexicans and a major source of pride and economic benefit to the Chama community. Operation of the Railroad brings unquestioned economic benefit, a recognized critical need in Rio Arriba (unemployment in the county runs over 10%, in the 1990 census per capita income was $7,859, and more than 25% of the population lives below the poverty line). Based upon Commission estimates, Railroad patrons and the Railroad spent over $6.5 million in 1998, resulting in an economic benefit of over $45 million (turnover rate of 7x) to the region, making the Railroad a major generator of economic health. JAC

John,Ninty dollars gets you two nights at the Slumberland! One night at the Braddock though! Since I've stayed at both, I feel that the $2.4 million number I produced is very realistic. The WM scenic numbers certainly are conservative and defensible and could be considerably higher. It appears that Stone used a 2 X factor in computing the economic impact, while NM used 7x. Now, how much were those 300,000 bike rider's supposed to bring in? ;-)

1. On their face, the numbers appear to be, if anything, conservative.2. Stone Consulting has a long history in the railroad industry and isn't about to blow its credibility by fudging statistics for what is a relatively pint-sized fee compared to its other projects.3. Unless I'm remembering wrongly, Steamtown's projections were its own, and not the result of any independent economic-impact expert.Dan CupperHarrisburg, Pa.

I think the numbers are most realistic given the figures gathered in some Stone Consulting work done here in Altoona related to the eventuality/practicality of excursion service here and the extensive vistation and economic impact studies perfomred by The Pennsylvania State University here. The combined impact of the Museum here and Horseshoe Curve approaches $5 million. Not hard to figure when our visitation here is triple that figured in Maryland. I hope the powers that be in Maryland pay attention. It is a tough sell no matter what the studies say. I don't know whether they are involved at the level we are or not but it is the reason why I sit on both the Strategic Planning Committee and the Board of Directors of the Greater Altoona Economic Development Corporation - to make sure I get heard in these same types of decisions in Altoona that are about to be made in Maryland.Thanks

Once again, let me emphasize: This is NOT skepticism directed towards the WMSR, Stone Consulting/Brother Gustafson, or the results of the specific study in the article. It's skepticism towards ANY "economic impact study" done in support of a project, most typically government-involved projects.In recent months, I've read several articles and books (none of them handy at the moment) all basically revealing the "economic impact study" industry to be a terrific bunch of paid yay-sayers, largely reinforcing the desires of those commissioning the studies (typically government looking to stimulate economic development in an economically-depressed area with tax dollars). Think about it--when was the last time anyone saw the results of a study saying that the proposed shopping mall, resort, or convention center would NOT be a wise expenditure of tax breaks or government money? Or that the project could be economically self-sustaining without government money? Nay-saying studies seemingly only get commissioned by private industry, and never see the light of day outside the boardroom.The WMSR numbers may well pass scrutiny. Even if we reject the concept of "secondary" economic impact as somewhat dubious (are we saying these folks wouldn't find work in town otherwise?), the case can be made that the state government is getting nearly a 200 percent return on its reported $1.3 million annual expenditure on infrastructure and operating costs--which, I believe is a better return than anyone's getting from the state-funded Rocky Gap resort one passes en route to the WMSR from the east (which, of course, was built on the promise of attendance figures yet to be realized, according to media reports).

Mr. Mitchell,I agree with you that there are a lot of virtually fraudulent "economic impact" studies designed to get the taxpayers to vote for a new stadium, etc., but I don't think this was one of them.It is relatively easy to find the total ridership figures and then do a survey. I don't know Stone's methodology, but a phone survey and an on train survey could easily produce statistically reliable numbers. Restaurant surveys might be subjective, but I'd bet that the gift shop, depot cafe and Frostburg merchants and the motel owners have a pretty good idea of how much the railroad riders are spending with them. Any error there would likely be on the low side. The fact that my personal spending observations fall within the study's figures tells me that it passes the "sniff test."Now, lets hope that the good news in the economic impact study produces positive results for the railroad. On the other hand, the study designed to show how much the 300,000 (later reduced to 200,000) bicylists would bring into the community was pure blue sky "research," or wild speculation in other words!Michael Allen

I get tired of the retorick of who's right and who's wrong. I think that most folks who read and or write replys to this forum are in the best intrest of railroading. Healthy discusion is alway good, but with the momentun aligned in things other then preserving railroad right of ways and equipment. we all need to stick together and work twards a common goal which this web site is doing an excellent job of, preserving railroad history by raising awareness of preservation efforts. let's try to keep a positive spin on things and support our RR presevationist "brothers" buy using whatever tools are available.Bravo to WMSR for there survey. fight fire with fire to the folks looking to get rid of RR history. Thouse folks will use ever thing in there power to preusde who ever they need to get what they want to so why shouldn't we. So let's stick together for the common goal.BTW, last summer my wife and I traveling from Altonna to Cass we stoped in at WMSR. It was a week day no trains, just to check it out. I bought some items at the gift shop , had lunch and gassed up before continuing to Cass, about $65 spent.Let's use our energy on preservation efforts. Talk is cheap and sometimes all to plentiful. I am pleging $100 to this site so that they can continue to spread the word about preservation efforts. Let's use RYPN as a tool in a positve manor.Scott

I'm sorry, but if we're going to question the bike trail projections, we also are forced to question the Stone Consulting survey on the same terms. Yes, one might find the trail numbers to have been plucked out of thin air laced with psychedelics, and the Stone/WMSR numbers based on hard reality after 15 years of operation, but that will come out with objective scrutiny. The odds are, however, that trail proponents have trumpeted their figures far and wide, milking them for potentially undue publicity and support.All I'm calling for is the objective scrutiny--and then the results of that scrutiny to be broadcast far and wide. If the trail numbers are fantasy, gather evidence that suggests it (such as past pie-in-the-sky numbers from the surveyors) and use that evidence to denounce the bad aspects of the proposals. If we can show that Stone Consulting has a great track record for conservative estimates, say so.In conclusion, my cautions and rants have less to do with particulars of this operation or survey, and more to do with trying my best to disassociate this industry from the "bad science" of paying consultants to say what you want. Folks are starting to catch on to the sham that such studies have become, and they're blowing the whistle on, or rejecting, government spending proposals (a new sports stadium at taxpayers' expense) based on such pie-in-the-sky projections. I'm of the opinion that railroad preservation doesn't need to get lumped in with the "scam artists" and "hucksters", such as sports teams and hotel/casino developers, that perpetuate these less-than-honest practices.

I somehow doubt that Rails to Trails would be having this kind of discussion on their forum (re: economic development numbers). While truly objective and provable numbers are most desired, such facts are in the realm of the "truth".If we are to have success in our mission of preserving rail infrastructure, then we have to be united in our methodology of proving the worth of our movement. The pie in the sky numbers cited for the bike trail out of Cumberland do not suffer the questioning of the group putting up those numbers (RTT). Only an outside agency (support from the rail preservation community) has given the local media a reason to question and examine the numbers provided by the trail lobby.Like it or not, the economic development "cost/benefit" model is not going away, and we should use it (with as solid and credible information as we can provide). If we want to quibble over every measure of methodology of everything--we will invariably lose out the better organized groups who have unity in their mission--whether the numbers are good or not.Michael SeitzMissoula MT

JAC is starting to get to the heart of some of the economic numbers. The example of the dollars spent at the motel, cascading down through the economy to the food store. It doesn't stop there, it moves through the store employees, they buy shoes for their kids, to the school teachers, etc. I remember reading a West Virginia DNR study some years ago which said that a dollar spent on tourism is spent 7 times locally, before it moves "out of state". Given the loss of jobs in the greater Cumberland area over the last 25 years or so including at CSX, the jobs and influx of cash into the economy seems to be desireable.GFP

Gotta agree with JAC, Sandy - I have worked with the Stone guys a time or two, and never found them amenable to parroting the party line where numbers are concerned, unless their research provides numbers to back it up. Of course, in any study like this one, results are broadly tolerant, and subject to the variations inherent in a constantly evolving marketplace. Any projection will go out the window if the mountain crushes the local highways that feed the railroad, or a nuclear power plant nearby goes critical. Nobody can take every potential "beyond our control" scenario into consideration.dave

Ok, I'll belly up to the bar on this one.This began when the trail folks introduced their own projected numbers of visitation and projected economic impacts. I'm not about to pick a fight with them on whether theirs is valid or not, or pick it apart.What I didn't like to see is a one-sided battle with the trails folks talking about economic impacts and the railroad completely silent. The railroad is there, has been there, and generating inputs to the RIMS II Economic Impact models (which is the US EDA preferred methodology) is pretty straightforward - we took the actual 2004 financial statements and plugged it in. It's actually not based on many estimated numbers at all.When you're talking about economic impacts, you can take it to about the second (indirect) level and then we stop. We don't go to the third level, and many do. Remember that a good portion of WMSR's activity is now the car shops program that Dan Pluta is operating - that contributes SUBSTANTIALLY to the economic impact analysis - just like any other railroad car repair facility would to a community. It's just out of sight, literally. Most people don't even know they do the program. It keeps everybody in the shop employed year-round.The other major input is the overnight stays estimate. WMSR has had 37% from their reservation system, our early-season ridership survey with over 200 responses came back at 44%, and we only used 25% in the RIMS methodology. I think we are actually too low, but right now, I don't have any firm data to base it on. WMSR is continuing the survey process during this year - if they want to increase that % we need more statistical data.My economic impact guru is a gentleman by the name of Gordon Lattey, GC&L Consulting, and we've been working together on this stuff for almost fifteen years now. He has the economic impact modeling software and we work together on it. Gordon's claim to fame is the "I Love NY" campaign, which he headed for many years. His project in retirement is the USS Slater docked at Albany, NY, no it may not be a train but it is a mammoth and very well-done volunteer project and it's Gordon's own passion. www.ussslater.org Worth a visit!You may not choose to believe economic impact results in general, that's OK. But it has been a methodology that's accepted by the EDA and if you're trying to compare apples to oranges here (or rails to trails) its important to make sure that you're playing under the same rules. We are.This is no attempt to discredit the trail project - just to make sure that the railroad isn't left behind because they could make no statement about their own impacts, which are certainly based in fact.

I work with this stuff regularly, but it's still hard for me to explain the multiplier concept in English. Nonetheless, a multiplier of 1 is certainly conservative for a labor-intensive sector such as tourism, and we all know a 2-8-0 and a bunch of coaches is nothing if not labor-intensive. I would have no hesitation about using the Stone Consulting results to justify the WMSR program to the powers that be.If this debate ever takes place in Cumberland, I wish I could be there to point out that if I want to ride a bicycle trail (and I do occasionally) I don't have to go more than a few miles from my home. But if I want to ride behind a big steam engine on a stiff grade, I've got to go to Cumberland. And have, on several occasions. Uniqueness sells.The number of bicyclists fit enough to go up that grade must be much smaller than the number who ride the relatively-level routes of the former GR&I and Pere Marquette in northern Michigan. If I was feeling surly (and I do occasionally), I might quote the late Michigan state representative Joe Mack, who lamented that hikers and bikers came to his beloved but impoverished Upper Peninsula with one set of underwear and a $5 bill, and didn't change either one.That is the kind of seat-of-the-pants economic impact study that politicians understand.