AWS Economic Impact Study 18
Input-output methodology
To compute the economic impact of data center investments, we use the input-output multiplier
methodology. Input-output models are used to measure the impact of the expansion or
contraction of one economic activity on other economic activities and on the local economy
as a whole. The Input-Output methodology is credited to Harvard economist Wassily Leontief,
who was awarded the Nobel Prize in economics for the development of this method and its
applications. In this model, a "local" is typically a country, but could also be a smaller region,
e.g., a county, MSA, or State in the US, or a region (e.g., Lombardy) in the EU. The method uses
historical data from the country, maintained by the Organization for Economic Co-operation and
Development (OECD) or the country's government statistical agency. The data shows the impact
of each dollar spent in one industry on all other industries: for example, a US dollar spent on
construction might typically be associated with 20 cents spent on electricity and other utilities. We
also use internal Amazon projections on how much we will spend on each industry while building
and maintaining the data center. We use standard procedures for computing multipliers from
OECD's data. See, for example, Ronald Miller and Peter Blair, "Input-Output Analysis: Foundations
and Extensions," 2009, Cambridge University Press.
