Types of multipliers

A number of different types of multipliers can be used to estimate the impact of film and video production (or indeed any activity) on a range of economic indicators. Two of the most commonly used multipliers are:

• Gross value added multiplier. This multiplier indicates the extent to which incomes from primary factors (e.g. labour and capital) increase for a given increase in demand. In a national accounting framework context, this amounts to the value of wages and salaries plus the value of gross operating surplus (also known as gross regional product or a measure of company profits).
• Employment multiplier. This multiplier indicates the increase in employment that will be required to occur as a result of a given increase in demand. It should be noted that, theoretically, the number of jobs could stay the same, as businesses may respond to a change in demand in the short term by paying overtime rather than taking on new staff. Therefore, the increase in employment is often measured in full time equivalents (FTEs) and the multiplier is usually expressed in terms of an increase of ‘X’ FTEs per million dollars of extra spending.