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Eclipse-onomics: On The Expected Economic Impact of the Great American Eclipse

On April 8, 2024, Arkansas will be in the path of totality for a total eclipse of the sun. Based on past experience, there are widespread expectations that our state will experience an enormous influx of visitors to view the event. The last total eclipse to cross the U.S, in August 2017, was cited as the largest single tourist event on record for some of the affected states.

This raises an obvious question: What will be the economic impact on the state’s economy?

The experience of states that were in the path of totality during the eclipse of 2017 can serve as a model for what to expect in Arkansas this year.  The 2017 eclipse took place on a Monday, as will this years eclipse, so the event became a weekend-long celebration. An economic impact study for Wyoming found that 77% of out-of-state visitors stayed overnight, with an average visit of 4.1 days and 3.5 nights.[1]  A study for Nebraska found that about 87% of visitors were from out of state, and estimated an average stay of three days.[2]

The analysis of Wyoming’s experience included the results of a detailed expenditure survey that broke down the spending of visitors by length of stay and type of accommodation (motel/hotel, camping, rental home, stay with friends or family, day trip-only). Lacking any specific information about how Arkansas might differ in terms of the mix of day-visitors versus overnight visitors or the choices of accommodation, we will simply adopt the average spending per visitor from the Wyoming survey, adjusted for inflation since 2017, as our out-of-state tourist spending profile.

Broken down by spending category, the Wyoming results suggest the following spending profile per visitor in inflation-adjusted 2024 dollars:

Table 1:Sources: Wyoming Office of Tourism, Bureau of Labor Statistics, and author’s calculations

By using these average spending per visitor figures, adjusted for inflation, we are implicitly assuming that the spending profile of the average visitor to Arkansas will match that of the average visitor to Wyoming in 2017.

The remaining question to consider is this: How many visitors will come from outside of Arkansas?

For that, we can turn to some research presented on the website Researcher Michael Zeiler presents a model of where eclipse travelers will visit the path of totality. With data on US population distribution from the U.S. Census and a model of the road distribution network using ArcGIS software from Esri, Zeiler estimates a model of eclipse visitation based on the idea that people who live closer to the path of totality are more likely to visit and that they will travel the shortest drive distance to get there.[3]

For Arkansas, Zeiler’s model predicts estimates of total visitors ranging from a low of 84,000 to a high of 337,000. That’s a pretty wide range, but it gives us some idea of the order-of-magnitude to expect.[4]

In an effort to narrow down the range, we compared the predictions of Zeiler’s model for states in 2017 to the actual outcomes. South Carolina was expected to have the largest number of eclipse travelers, with a range of 547 thousand to 2.2 million. The actual number of total eclipse tourists was estimated at 1.6 million, comfortably within the projection range.[5] In Wyoming, however, the estimated number of travelers (including in-state travelers) was estimated to be 261 thousand—36% higher than the 192 thousand high-end prediction. Similarly, eclipse travelers in Nebraska totaled 708 thousand, 52% higher than the model’s high estimate. One speculative explanation of this pattern of prediction errors is that people might be more inclined to travel further in the West and Midwest to see an eclipse than they are along the highly-populated Atlantic coast.

In the results reported below, we present an optimistic range of projections. We take our low-end projection to be the midpoint of Zeiler’s two forecasts for Arkansas. For the higher estimate, we take Zeiler’s upper bound and add 36% (the excess visitors observed in Wyoming). Specifically, we present scenarios in which the total number of eclipse travelers ranges from 210 thousand to 460 thousand.  Assuming that 75% of those total travelers are visiting from out of state (the Wyoming average), the total number of out-of-state visitors ranges from 160 thousand to 350 thousand.

Using these estimates for the number of travelers, along with the spending per out-of-state visitor spending in Table 1, we run a tourist-spending simulation in IMPLAN, an Input-Output model that traces spending effects through a local economy, in this case the State of Arkansas. The model simulations provide estimates that include both the Direct Effects of the spending, along with secondary effects of the tourism spending, which include Indirect Effects (measuring the increased demand that propagates along the supply chain) and Induced Effects (reflecting the extra spending generated by higher incomes and profits).

The results are reported in Table 2. The upper panel of Table 2 shows the estimated impact assuming 160 thousand out-of-state visitors. The direct impact on Value Added (State GDP), is approximately $29 million. Including the Indirect and Induced Effects, the total impact is $48 million. The projected increase in personal incomes, including direct and secondary effects, is nearly $27 million. The total impacts on employment are often described as the number of jobs supported by an economic activity or event, expressed in full-time equivalent (FTE) jobs over the course of the year. In this case, for a single-weekend event, the projections might better be interpreted as the FTE expression of the additional staffing that will be required to accommodate the short-term surge in demand.

Table 2:

The lower panel of Table 2 shows the impacts associated with a total of 350 thousand out-of-state visitors. In this case, the total impact on state GDP is over $100 million, with nearly $60 million in higher personal income and 1,700 full-time-equivalent jobs.

The magnitudes of the effects are linear with the values in the lower panel exactly 118.75% higher than in the upper panel (350/160), so the reader is welcome to adjust the results for different assumptions about total attendance.

This analysis had focused on a study area consisting of the entire state of Arkansas. For that reason, we deliberately excluded the effects of eclipse-related travel spending by Arkansas residents. If we were to focus more specifically on the areas within the path of totality, Arkansas residents from outside the path who were traveling to those counties/regions would generate additional impacts for the local destination economies.

Research by investigators at Forbes gives some insight into the relative impacts on regions that are likely to be the most affected.[6]  Looking at data from retail foot traffic over the course of the long weekend in August 2017, the Forbes researchers found that retail traffic increased by 16.2% within the path of totality. Regions just outside the zone saw an even larger impact: up 27.7%. Outside the vicinity of the eclipse path but within driving distance (200 miles), retailers saw a decline of 14.7%.  Moving further away, there was no notable impact. Overall, U.S. retail traffic dropped 12.7% during the hour of totality.

The projections presented here are rough estimates, but they convey the expected order-of-magnitude that the eclipse will have on the Arkansas economy. The numbers are big, but the event is temporary, so it represents a miniscule fraction of the state’s annual economic activity. If we consider state GDP for the month, our estimates represent an increase of only 0.3% to 0.7%. For the brief 4-day period, however, the magnitudes are non-trivial. Relative to an average 4-day period, the impact estimates presented here amount to about 2.5% to 5.5% of GDP with a 1.5% to 3.2% boost to personal incomes.

There are many uncertainties and contingencies about actual outcomes, with one big uncertainty being the weather. Nevertheless, many travelers have already laid their plans and made their reservations, and this is certain to be a significant, albeit temporary, economic event.


[1] Dean Runyan Associates, “2017 Eclipse Economic Impact Study: Summary of Findings,” Wyoming Office of Tourism, 2017.

[2] Data from Nebraska are sourced from the Nebraska Tourism Commission, citied in, Jenn Gjerde and Angela Sears, “The Great American Eclipse Was Big Business for Nebraska,”


[4] There are two estimates for Arkansas in different locations on the website, with a lower estimate that ranged from 70,000 to 281,000. We are assuming that the higher range is the more recent estimate.

[5] Data from South Carolina are sourced from the South Carolina Department of Parks, Recreation and Tourism, cited in “KEY STATS: Total Eclipse Weekend Columbia, S.C.”

[6] Sean Lakind, “The Great American Eclipse and Its Effect on Retail Traffic,” Forbes Communication Council.


2023 Economic Forecast Event

This morning’s Economic Forecast Event was a great success. Thank you to all the participants and attendees, and special thanks to the Little Rock Branch of the Federal Reserve Bank of St. Louis for hosting the event.

Copies of the presentations are available by following the links below:



Metro Area Employment and Unemployment – September 2023

Mirroring the statewide report, Arkansas’ metro areas saw unemployment creep higher, with signs of slowing employment growth in some areas.

Among the eight metro areas that cover parts of the state, only Texarkana saw no change in its unemployment rate.  The unemployment rates in Northwest Arkansas, Hot Springs, Little Rock and Memphis were up 0.1 percentage points, while Fort Smith, Jonesboro and Pine Bluff matched the 0.2 percentage point increase reported for the state in September. Along with increases in August, unemployment rates have risen noticeably over the past two months, but generally remain lower than a year ago.

Notably, the patterns for metro areas that are primarily based in Arkansas show a similar pattern: A sharp decline in unemployment during the first half of the year, and a rebound in the past two-to-three months. This pattern is not evident in the data for Memphis and Texarkana, suggesting that the state-specific component for Arkansas is driving the results. In our analysis of the statewide report for September, we conjectured that the 2023 dip in Arkansas unemployment—not present in the national data—might be a data anomaly that will be smoothed after the annual revisions in January. The patterns seen in the metro area data reinforce that suspicion.

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Statistics

Unemployment rates in Fayetteville, Jonesboro and Little Rock remain lower than the statewide average of 2.9%, while rates in Memphis, Pine Bluff and Texarkana are above the national rate of 3.8%.  Fort Smith and Hot Springs occupy a space in-between the state and national rates.

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Statistics

Payroll Employment
Nonfarm payroll employment declined from August to September in Jonesboro, Fort Smith and Little Rock. On the other hand, the data show strong job growth in Northwest Arkansas, Hot Springs, Memphis and Texarkana. With a surge over the past three months, employment in Texarkana is now 3.1% higher than a year ago—a growth rate nearly as high as the 3.4% growth in the Fayetteville-Springdale-Rogers MSA. Jonesboro and Pine Bluff have also shown significant growth over the past 12 months, while Hot Springs, Little Rock and Memphis are essentially unchanged from a year ago.

Source: Bureau of Labor Statistics, Current Employment Statistics

The longer-term growth trends continue to indicate that the strongest job growth is in the northeast and northwest areas of the state, with Fayetteville-Springdale-Rogers expanding by 13% since February 2020, followed by Jonesboro with 6.7% growth.  Little Rock and Hot Springs have also grown significantly relative to pre-pandemic employment levels. Pine Bluff is the only metro area in the state where employment remains below the February 2020 benchmark.


Arkansas Personal Income – 2023:Q2

The most recent personal income report showed a sharp slowing of Arkansas income growth in the second quarter. However, thorough revisions to the data had the effect of raising estimates of the state’s growth in the recent past, particularly in 2020 and 2021.

For the second quarter, Arkansas Personal Income growth rate was only 0.4% at a seasonally-adjusted annual rate, compared to a 4.3% growth rate for the U.S.  Arkansas growth rate was the slowest positive growth rate in the nation, with Maine showing a decline of 2.7%.

Arkansas slow growth in the second quarter was primarily attributable to Farm Income, which dropped by 7.4% for the quarter, a decline of 97.8% at an annualized rate. This followed a (revised) sharp decline in the first quarter as well. The impact on total proprietors’ income is illustrated in the figure below.

Source: Bureau of Economic Analysis

Note that the decline in Farm income had the effect of lowering total proprietors’ income, even though Non-farm proprietors’ income increased at a 4.3% annual rate. This followed a (revised) sharp decline in farm income in the first quarter as well.

As shown in the table below, Proprietors’ income was the sole factor for slow earnings growth.  Wages & Salaries, and Dividends, Interest & Rent were positive contributing factors to personal income growth.

Source: Bureau of Economic Analysis

A breakdown of industry contributions to earnings and personal income growth again highlights the prominence of farm income in this quarter’s report. Nearly all other sectors showed positive growth or only small declines. Were it not for the -3.3 percentage point contribution of Farm earnings, personal income would have increased at the same rate as the U.S. total.

Source: Bureau of Economic Analysis

Data Revisions
Comprehensive revisions to the Personal Income data had significant implications for income growth over the past several years. The revised statistics show slower growth in 2019, but higher growth rates during 2021 and 2022.

Source: Bureau of Economic Analysis

The slower growth in 2019 is reflected in downward revisions to Dividends, Interest and Rent, as well as Proprietors Income. As shown in the two figures below, however,  Revisions of more recent data for these two categories diverge, however. The new data show more rapid post-2020 growth for Dividends, Interest, & Rent, while Proprietors Income was revised sharply lower (both Farm and Nonfarm were revised lower).

Source: Bureau of Economic Analysis

The upward revisions to personal income growth during the pandemic were primarily attributable to higher estimates of Current Personal Transfer Receipts:

Source: Bureau of Economic Analysis

The revisions had little impact on the main source of earnings: Wages and Salaries.

Overall, the revisions leave Arkansas in a position with larger cumulative income gains since 2019 than the rest of the nation. The most recent quarter added little to total growth, but compared to 2019:Q4 Arkansas income has increased by 25.8%. Over the same period, U.S. cumulative income growth has been 23.1%.

Source: Bureau of Economic Analysis


Arkansas Employment and Unemployment – June 2023

The latest state employment report shows another month of solid growth. The unemployment rate dropped to a new all-time record of 2.6%—a new record low for the series (again). The national unemployment rate also declined in June, leaving Arkansas’ unemployment rate a full percentage point lower than the U.S. average.

Source: Bureau of Labor Statistics

The unemployment rate is primarily being driven downward by historic low figures for the number of unemployed.  After nine months of consecutive declines, the number of unemployed Arkansans dropped to less than 36,000 in June. Prior to the Covid contraction, that measure had never before fallen below 46,000.  Meanwhile, household employment continues to climb: after nine consecutive months of growth, employment has increased by over 21,000 (1.6%).  As a result, labor force participation also continues to climb.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Payroll Employment
Data from the payroll survey also showed ongoing strong employment growth. Nonfarm payroll employment expanded by 1,900 in June (seasonally adjusted data). Compared to a  year earlier, payroll employment was up by 36,700 jobs (2.8%).

The increase from May to June included an increase in employment in Education & Health Services of 3,500 jobs, with most of the gains coming from Health Care and Social Assistance. At the other end of the spectrum, employment in Professional and Business Services was down by 2,600 jobs, with declines in each of the subcomponents of that super-sector.  Changes in other service-providing sectors were mixed.  In goods-producing sectors, we saw gains in Construction and Durable-goods manufacturing.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Compared to June 2022, payroll employment is up 36,700, with Education & Health Services and Leisure & Hospitality Services accounting for most of that growth. Those were two of the sectors hardest-hit with employment losses during the Covid contraction.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 


The 2023 Income Tax Cut Proposal

As this year’s legislative session winds down, a new tax cut proposal is on the agenda of the state legislature this week. The proposal would reduce the top marginal tax rate from 4.9% to 4.7%. This essay considers some of the features of the proposal.

Arkansas has a unique multi-tier system of tax tables, first established in the context of tax cuts in 2015. Accordingly, the newly proposed legislation, Senate Bill 549, adjusts two tax tables separately. The Low Income tax tables are adjusted as shown in Table 1:

Table 1:

Tax cuts for income-earners in this range are affected primarily by adjusting the tax brackets; for example, by increasing the threshold for zero taxes from $5,000 to $5,100.  Toward the upper end of the scale, threshold incomes are increased and the top marginal tax rate is reduced from 4.9% to 4.7%.

The effects of these changes on average and marginal tax rates for incomes up to $84,500 are shown in Figure 1:

Figure 1:

The changes in tax-bracket thresholds results in lower taxes for all earners within the income range considered. The tax savings are fairly small: for example, for a taxable income of $32,000, the tax burden is lowered by $32.50—a reduction of 0.10%.  At the higher end of the scale, a taxpayer with an income of $84,500 would receive a tax cut of $137.50 (about 0.16%).

The high-income tax tables are adjusted as shown in Table 2. As in Table 1, the thresholds for the tax brackets are revised, along with a reduction in  the top marginal tax rate from 4.9% to 4.7%.  The breakdown of statutory marginal tax rates into income brackets in this case is completely fictional. The tax obligations in Table 2 could be equivalently stated as “$250 plus 4.9% of all income over $8,500” under existing law, or in the case of the proposed changes, “$260 plus 4.7% of all income over $8,800.”

Table 2:

But here’s where it gets complicated: Under either tax regime, existing or proposed, the two tax scheduled don’t align. Consider the proposed bill: for an income of $87,000 the tax burden from Table 1 is $3,509.  If we turn to Table 2 to calculate the tax obligation for an individual with an income of $87,001, it turns out to be $3,939, a tax increase of $430 for an income increase of $1. That’s an enormous effective marginal tax rate! This is an example of what is known as a “tax cliff.”

The legislative “fix” to this problem has been to append an adjustment ladder. In the proposed legislation, for example, an adjustment table reduces the tax burden for individuals with incomes in the range of $87,001 through $87,100 by $460. This assures a smoother transition at the $87,000 income threshold. The adjustment amount is reduced by $10 for every $100 until it reaches zero at an income level of $91,300. In effect, this turns one enormous tax cliff into 46 mini tax cliffs as shown in Figure 2, expressed in terms of average tax rates.

Figure 2:

At each one of these mini-cliffs, the marginal tax rate spikes: a $1 increase in income increases an individual’s tax burden by $10.047 (one dollar for the ladder-adjustment plus 4.7% for the one-dollar increment).

The standardized tax tables are set up in increments of $100, so if we use that as our basic unit, a $100 increase in income results in a $10 increase due to the ladder-adjustment plus $4.70 due to the marginal tax rate–a total marginal tax increase of 14.7%.  Figure 3 illustrates how this feature results in an effective marginal tax rate of 14.7% over the adjustment range, along with how the proposed 2023 tax cut affects marginal tax rates.

Figure 3:
*Marginal Tax Rate calculated in $100 increments.

So, although the proposed tax cut plan does reduce the maximum statutory marginal tax rate from 4.9% to 4.7%, the maximum effective marginal tax rate is 14.7% (down from 14.9%) through the adjustment-ladder income range (which itself is shifted by the proposal).

Economic theory and evidence tells us that the effective marginal tax rate is the relevant measure to consider when it comes to to evaluating economic incentives. The tax system introduces economic inefficiencies by discouraging the incentive to seek a higher income when marginal tax rates are high. By this measure, the 14.7% marginal tax rate over the income range of $87,000 to $92,000 is a clear disincentive.

The stated intent of income tax cuts is generally two-fold, to reduce the economic inefficiencies induced by taxation and to reduce the burden on individuals and households. The proposed tax-cut legislation leaves in place the oddity of a very high marginal tax rate over a specific income range, but how much does it satisfy the second objective: lowering taxpayers’ burden?

Figure 4 shows the tax savings under the proposed changes. For a net taxable income of $20,000, the tax cut would yield tax savings of $6.60.  The savings jumps to $17.70 for an income level of $23,600 and rises to $128.50 for incomes of approximately $80,000.

Figure 4:

For a range of incomes from $84,500 to $91,900 the tax cut represents more substantial savings, peaking at $385 for incomes just over $85,100. The magnitude of the tax cut drops to $170 at an income level of just over $91,450.

In dollar-value, the value of the tax cuts cannot be dismissed, but in terms of percent-of-income they are relatively small. Figure 5 converts the tax-cut savings into changes in average tax rates.  For incomes below $24,000 the tax cuts amount to about 0.05% of taxable income. The percentage rises to 0.16% for incomes above 80,000. At higher incomes (above $92,000), the percentage tax savings converge toward the 0.2% change in the statutory maximum marginal tax rate.

Figure 5:

Taxpayers with incomes in the range of $84,500 to $91,900 receive the largest tax reductions, both in absolute dollar terms and as a percent of income. For this segment of taxpayers, the incentive effects of tax cuts are most likely to have an impact. Those who face the highest marginal tax rates are those who benefit the most from tax-rate reductions.

The ongoing presence of an effective marginal tax rate of nearly 15% over a range of incomes is a significant potential source of economic distortions. Arkansas is the only state in the U.S. with this kind of two-tiered tax table—a remnant of past political compromise that has become a fixture of our tax system. Tax reform to increase the efficiency of our tax system should address this built-in artifact of our tax code as much as it addresses the issue of lowering the statutory marginal tax rate.

Arkansas Employment and Unemployment – December 2022

Many economists have been predicting weakening economic conditions as the Federal Reserve hikes interest rates to fight inflation, but the impact on labor markets has not yet materialized.  The data for the final month of the year (released yesterday) revealed stable labor markets both nationwide and here in Arkansas.  The unemployment rate for Arkansas ticked down from 3.7% to 3.6% in December as the number of unemployed Arkansans fell for the first time in nine months (-333).  Household employment and labor market participation both increased in December (by 596 and 263, respectively), interrupting six-month gradual downtrends. National data released two weeks ago showed that the U.S. unemployment rate declined from 3.6% to 3.5% in December.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Payroll Employment
From the establishment survey, nonfarm payroll employment was up 2,300 in December (seasonally adjusted).  Gains and losses across sectors were mixed. Sectors with higher employment included Construction, Durables Manufacturing, Transportation and Utilities, and Other Services.  Small declines were reported for Nondurables Manufacturing and a handful of service-providing sectors.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Compared to December 2021, payroll employment was up by 18,800—about 1.4%.  The only sectors that showed negative growth over the past 12 months were Mining and Logging, Construction, Retail Trade, and Professional & Business Services. The latter two declines suggest a 2022 holiday shopping season somewhat less robust than in 2021.  Relative to the pre-pandemic peak in February 2020, Arkansas payroll employment is up by 25,400, or 2.1%.  For the entire U.S., December payroll employment was 0.8% higher than in February 2020.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

This is the last state employment report before the annual data revision process.  We’ll be back in March with revised statistics for both the household and payroll survey data.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE. 

Arkansas Economic Forecast Conference

Thank you to all the attendees of the Arkansas Economic Forecast Conference this morning.  Special thanks to the participants in our panel discussion:

  • Randy Zook, Arkansas State Chamber of Commerce
  • Bert Greenwalt, Arkansas State University
  • Shannon Newton, Arkansas Trucking Association
  • Try R. Wells, Baptist Health

Here are links to the forecasts presentations:

Arkansas Employment and Unemployment – April 2022

Although the unemployment rate ticked up a tenth of a point in April, the employment report for Arkansas was generally positive.  Both the household and payroll surveys showed employment growth, and labor force participation rose for the fourth consecutive month.

The unemployment rate ticked up from 3.1% to 3.2% as the number of unemployed increased by 1,133.  The household measure of employment rose by 4,522—the fourth consecutive monthly increase.  Since December, the number employed has risen by 19,806. The labor force expanded by 5,655, increasing the labor force participation rate by 0.2 percentage points to 56.8%.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

The Arkansas unemployment rate remains exceptionally low, although the difference between the state’s 3.2% rate and the national unemployment rate of 3.6% is not statistically significant.

Source: Bureau of Labor Statistics

Payroll Employment
Arkansas nonfarm payroll employment increased by 2,400 in April (seasonally adjusted).  Most sectors showed gains, with the exception of Construction (which may have been affected by poor weather conditions), Retail Trade, and Professional & Business Services.  The job losses in Professional & Business services were primarily in the category of Administrative & Support Services.  Other service providing sectors showed strong gains, including Health Care & Social Assistance, and Accommodation & Food Services.

Source: Bureau of Labor Statistics, Current Employment Statistics (CES)

Compared to a year earlier, Arkansas nonfarm payroll employment was up 37,400 jobs in April.  The net gain relative to the previous business-cycle peak (February 2020) is now up to 12,600.

# # #

Seasonally adjusted data for Arkansas nonfarm payroll employment, reported in a format consistent with the monthly news release from the Arkansas Division of Workforce Services, can be found here: Table-Seasonally Adjusted NFPE.