Story posted December 21, 2011
No matter how Amar Patel '13 finished the semester, he can always pride himself on one fact. His independent research made headlines.
"Growing Local Best Way to Boost Economic Growth" read a headline in the Dec. 14, 2011, Portland Press Herald. The op-ed highlighted a study Patel conducted with the Maine Center for Economic Policy (MECEP) detailing the benefit of every dollar spent at Mom-and-Pop businesses in Portland.
According to the study, every $100 spent at a locally owned Portland business can generate $58 in additional local economic impact. That's $25 more than comparable spending at a national chain.
The study results were announced by MECEP and business leaders at a press conference at a locally owned bookstore in Portland, which was picked up by media outlets around the state.
"It is also less expensive to help local businesses grow than it is to entice a business from away to open up shop here," reads an op-ed in the December 14, 2011 Portland Press Herald.
The newspaper was one of several media outlets that picked up on Amar Patel's research on the effects of buying locally in Portland.
Patel, an economics/government double major, had never heard of buying local until he came to Maine, he says, even though his father and brother own convenience stores in New Jersey.
"It was a very new concept to me," says Patel. "I'm from a densely populated area where everyone shops at Walmart or Sam's Club. For me it was a new type of question: How do you quantify the impact buying local can have? I saw the challenge of applying economic theory."
Patel worked closely with Bowdoin faculty mentor economist John Fitzgerald to develop a research methodology, which included learning complex input-output software.
MECEP supplied survey data from various Portland businesses, which included expenditures on salaries, advertising, equipment and supplies, and professional services. Patel measured these data against 2007 U.S. Census figures to calculate the revenues generated by locally owned businesses.
He found that the 28 Portland businesses surveyed accounted for over $57 million in local revenues, with 65 percent of their expenses paid to producers of local goods and services - as opposed to national chains, which relied heavily on out-of-state producers.
"If local businesses pay employees more, they in turn will spend more locally, theoretically," says Patel. "And the businesses patronize other local businesses, so that impact is recycled through the economy."
Patel's attempts to glean similar data from Brunswick businesses didn't yield enough responses to do a comparative study. He is philosophical, however: "I kind of expected that," says Patel. "I'm a college student asking for data they put on their taxes. I probably wouldn't do it either."
Still, Patel says he's pleased with initial results and is convinced that buying local is a strategy that can have measurable effect in the Brunswick area as well.
"I think in small towns in Maine it's beneficial to shop local," he says, adding: "There are lots of socially aware people here who will shell out the extra dollar or two. Once you get to where I am in New Jersey though, it's hard for local businesses to survive."