Local multiplier effect

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The local multiplier effect (sometimes called the local premium) refers to the greater local economic return generated by money spent at locally-owned independent businesses compared to corporate chains or other absentee-owned businesses. Localisation advocates cite the multiplier effect as one reason, of many, for consumers to do more of their business locally.

Two U.S.-based entities have published studies measuring the local multiplier. Civic Economics a for-profit economic consultancy has undertaken studies in Austin, TX, San Francisco, CA; Chicago, IL and Western Michigan. The Institute for Local Self-Reliance, a non-profit organization, executed a study looking at much smaller communities in the Central Coast of Maine.[1]

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