Amazon announces study on economic impact of its investments

Economics
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Amazon's Economic Impact Report shows indirect increase in median household income | About Amazon

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Amazon has announced a study comparing counties with its investments to similar counties without such investments. The research used various analytical methods, including panel regressions and synthetic control, to assess the impact of Amazon facilities on standard economic outcomes like the employment-to-population ratio and median household income.

According to Amazon, in counties where it establishes facilities, the employment-to-population ratio increases by an average of 1.7%. This effect is largely driven by Amazon’s job-multiplier effect of 1.9; for every 10 jobs Amazon creates directly, nine additional jobs are generated indirectly. For instance, in Licking County, Ohio, Amazon’s introduction of a fulfillment center directly resulted in over 4,000 new jobs. Additionally, this investment spurred local businesses to create approximately 3,600 more jobs. This job growth stems from the increased demand for services provided by local partners, such as shipping and construction companies.

Areas with an Amazon facility see an increase in median household income. On average, median household income rises by 2.2%, equating to an additional $1,350 per year for each household. In specific cases, such as Arapahoe County, Colorado, the establishment of an Amazon fulfillment center resulted in an income boost of $1,825 per household. Beyond direct income increases, these communities also benefit from enhanced economic activity. Newly hired workers contribute to the tax base and drive consumer spending at local establishments such as restaurants, movie theaters, and grocery stores.

Amazon provides a range of services including online and in-person shopping, delivery of fresh produce, and media distribution. The company operates various devices and services such as Alexa and Fire TV and offers cloud solutions through Amazon Web Services (AWS). Its operations include logistics and customer service while also delivering entertainment through platforms like Amazon Originals, Prime Video, and Audible.

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