By Laura Keil
How many times does a dollar change hands before it leaves the community?
Simon Fraser University grad student Tim Kelly is trying to find out so that local economies such as Dunster, McBride and Valemount can keep money in the community for longer.
Using social network analysis, Kelly is mapping the business community of Dunster to find out where money is leaving the community and how business owners could potentially recirculate those dollars by diverting them to someone local. His premise is simple: the more times dollars bounce around the community, the more people benefit.
It means spending slightly more for a local person’s goods or services could benefit the person spending that money once it is comes back to them through other locals.
“Even if you catch just five per cent (of the dollar on its way out of the community), that offsets the 5 per cent extra you may have to pay to buy locally – so it comes back to you.”
Kelly is asking local business owners to tell him what percentage of their income leaves the community. Using a mathematical formula, he can create a diagram that shows where money can stay in the community for the longest period of time – maximizing the spin-offs of any dollar. He is targeting the outside points – where the money leaves, instead of being spent locally.
The diagrams could also help locals to determine where there is local demand for a service, so that new businesses could fill in the gaps.
“What’s great about Dunster is that it’s geographically isolated so everybody knows when their money leaves the immediate area,” Kelly says.
The Dunster Community Forest has taken a leadership role in the research and may use the data for operating decisions. Kelly says the research could help the community forest maximize its benefit to the community. For instance, they put out a job for tender, and two loggers apply for the work. One says they’ll cut it down and sell to a forestry company in Prince George. The other says they’ll cut it down for slightly more money but send it to a local specialty mill for processing, which will allow another person to do finishing work on the wood and eventually be turned over to a local furniture maker.
“I can plug in those paths and show that this will actually increase the circulation of money within the community by a certain amount of money.”
Kelly’s research is part of a larger study looking at the Interior Cedar Hemlock temperate rainforest and the sustainability of natural resources in connection with the sustainability of local communities. He says fundamentally, ecosystem management is about managing people.
“There’s always the bottom line as to ‘Do you cut down the tree and put food on the table? Or do you have some other ability to protect that forest?’ You don’t want another Easter Island.
“If your community can retain the economic value, then maybe they can harvest at a more sustainable rate,” he says.
He says it’s about value-adding. Small communities often have a lack of capacity. He says it’s important to create as much resiliency as possible in the local economy.
When his research is finished, he hopes the community will maintain an ongoing inventory online which will help residents know how to maximize their local spending. He will host a workshop to explain to local people how they can use the data. Funding for the research came from the Future Forests Eco-System Science Council.
If you’d like to participate in the local survey, please contact Tim Kelly, PO Box 962, McBride, BC V0J 2E0 or call 250-569-7891 or by email at [email protected] If you need assistance in preparing the data, please contact Tim, who is volunteering to assist and will keep all dollar values confidential. Further instructions are on the survey, which is available (with a stamped return envelope) at the Dunster General Store.