A Production’s Economic Impact in Arkansas

Economic Research and Associates Input Output Model, commissioned by The Arkansas Film Commission. ERA determined that for each $1 dollar spent in the industry, there is an additional $0.91 created elsewhere in the state economy through induced and indirect impacts

Based on the impacts in output, earnings and employment in the motion picture and video production industries, the following implications and conclusions may be drawn:

  • Output Impact: The total impacts for the State of Arkansas are about $1.9 million based on the estimated expenditures of $1 million. For each $1 dollar spent in the industry, there is an additional $0.91 created elsewhere in the State economy through induced and indirect impacts. This compares to a national figure of $1.58 of output for sector as a whole. This indicates that Arkansas is able to capture approximately 67 percent of the total economic activity associated with film expenditures based on the existing industrial structure of the state.
  • Earnings Impact: In the State of Arkansas, $1 million in expenditures generates $224,000 in earnings direct spending. This in turn generates an additional $380,000 in induced and indirect impacts, or about $0.38 for every $1 spent in the area.
  • Employment Impact: Every $1 million spent on the motion picture and video productions industries generates about 14.1 FTE jobs in the state. The average annual wage for workers in the State of Arkansas in this industry ranges between $27,000 to $45,000 annually depending on the position.
  • Sales Tax Impact: Based on the intermediate inputs that are subject to sales and use tax in the state of Arkansas, every $1 spent generates approximately $.024 in sales tax. This means that every $1 million spent in the industry would therefore generate roughly $24,000 in sales tax.

Illustrative Impact on a Sample Budget To summarize the above, an independent feature film with a budget of $5 million that shot entirely in Arkansas would generate approximately $4.6 million in additional spending (output) elsewhere in the state, approximately $1.1 million in earnings direct spending, which in turn would generate an additional $1.9 million in induced and indirect impacts, generate 70.5 FTE jobs, and an additional $120,000 in sales tax.