Friday, August 13, 2010

A better study?

This morning's LA Times includes "Wilshire Grand developer seeks public assistance on $1-billion project ... The LA City Council's Housing Community and Economic Development Committee has authorized a study to be conducted to evaluate the type of assistance the developer might get ... The study would be carried out by independent consultants hired by the City, and funded from $250,000 that the developers have agreed to pay ..."

I know, stuff like this happens every day. It would be nice if there were a betting opportunity on what the study finally recommends. But studies like this are part of a cottage industry and they are usually a bunch of dressed up assertions.

But why not include double-entry bookkeeping in the study? There will surely be employment multipliers as part of the magic, but what about the multiplicand? Every dollar that presumably turns over when the City forks over the $1 billion comes from somewhere. Every additional dollar that the multiplier conjures comes from somewhere. Studies that add up all the plusses are standard. But most of these have offsetting minuses somewhere else. If $250,000 will be spent on the study, then why not show the offsets too? I think I know the answer.