1. How often do I need to update my data?
In general, we leave this up to you. The multipliers are based on the structure of the economy of the year of the data. If you determine that the data year you have is an accurate representation of the current economy, then there is no need to update and purchase a more recent data year.
Here are some situations when IMPLAN Does recommend updating your data:
- An obvious change in the local structure of the economy. Not all changes in local economies will be as obvious as New Orleans before and after Hurricane Katrina struck. In many cases, it may be growth of a subsector or even the introduction of new industries. The multipliers are based on the structure of the economy, whether an industry exists and the relationships of the demand and supply of commodities. Due to increases in foreign imports, Output Multipliers typically decrease in size somewhat over time. Likewise, as productivity increase, this also indicates decreased employment needs per dollar of output.
- When a BEA Benchmark is released, IMPLAN follows suit and introduces those new underlying sets of industry production functions. The economy and technology are constantly changing. When new Benchmarks are introduced, new industries are likely introduced as well. If you wish to keep current with the BEA benchmark when reporting your analysis, a recent purchase of that data region is necessary to maintain consistency.
- Scrutiny of the project using the data. The more exposure an analysis has to the public, particularly a controversial proposal with an opposing side, the more politically important it is to use "the latest data".
Please feel free to post any additional questions to our Community.
2. How does IMPLAN handle Employment and other factors (e.g., Output, Income, etc.) in the Study Area Data when the Industry or interest, such as a casino hotel, performs several functions?
By definition, Employment in IMPLAN is a head count and not an FTE equivalent. For more information about the definition of IMPLAN Employment, please see our glossary.
While IMPLAN employment and income figures generally start off larger than CEW figures due to the addition of proprietors and proprietor income, a proportion of some sectors’ activity (employment, output, income, etc.) is later reclassified into other sectors. This reclassification process follows the BEA “redefinition” practice and is designed to reassign products from producing industries in which they are secondary products to the industries where those products are primary. Consider a popular hotel on the Las Vegas Strip. Such a hotel typically boasts a casino, restaurant, gift shop, and concert stage and would not be very well represented by the production function, income per worker ratio, output per worker ratio, and other factors of the hotel and motel sector. Therefore, IMPLAN utilizes the national redefinition table from the BEA to “redefine” certain small portions of the industry’s activity to other appropriate sectors such as Gambling (495), Restaurants (503), various Retail, and Performing Arts (488).
3. Does changing the size of Industry affect the Multipliers?
It seems counterintuitive, but a Sector's Multiplier does not depend on the Sector's overall size. Instead, what affects the Multiplier is the underlying relationships used in the creation of the Multiplier (specifically, Labor Income per $1 Output and Intermediate Expenditures per $1 of Output) of that Industry. When you run an impact analysis, it does not matter what the initial size of the Industry is – so long as those Industry relationships are what they should be.
4. Why is my impact smaller at the state level than at the county level?
It is true that generally a larger region has less leakages due to imports and therefore is typically a larger impact. However, depending on the industry mix of the county and the region(s) you are comparing it to, the RPCs for what is regionally available in a smaller region can exceed that of a larger region. This typically occurs when the primary region is a key producer of the commodities being examined in the study (or in generally represents the largest functional economy in the region) and thus a larger area increases demand at a faster rate than it provides additional supply, thus reducing the RPC values. However, a key problem also is that while it may seem like you are comparing like regions, because of the nature of Industry aggregation, you are comparing two distinct Multiplier identities. There are two methods for solving this, MRIO and Customization.
For more on this topic, visit our Knowledge Base article "Size of Your Impact - Small vs. Large Study Region".
5. Why is my Value Added value negative?
Negative values in Value Added are a common source of confusion. Value Added = Employee Compensation + Proprietor Income + Other Property Type Income + Taxes On Production & Imports. PI, OPI, and TOPI can all be negative and if any one or a set of these sum to a more negative than the positive values (i.e., if the negative components are greater in magnitude than the positive components, then you will end up with negative VA). For example in the 2011 US Model Sectors 348 and 349 (both of which produce commodity 3348) have negative OPI. Negative OPI just means that the industry lost money that year (costs were greater than revenues). You can check to see exactly what is the circumstance in your regional industry by going to the Explore> Study Area Data and looking at the View By: Industry Detail sheet to see the breakdown of Value Added and to view which factor is causing the Value Added to be negative. If the factors involved are Other Property Type Income or Taxes on Production & Imports these do not impact the Indirect and Induced results as both of these factors are treated as leakage.
6. What is the difference between Impact vs. Contribution Analysis?
Two general categories of studies using IMPLAN have emerged over the years:
Impact Analysis is the more common of the two. This type of study examines the economic impacts of an event or change to the economy (e.g., the opening of a new business). These studies address the general question: What are the marginal impacts of the project?
Contribution Analysis is becoming increasingly more common and concerns the role, importance, or contribution of an existing business, project, or industry. These studies address the general question: What is the contribution of the project to the overall economy of the area?
7. Why are Multipliers from OECD Countries low and how are they calculated?
The difference in Multipliers you will see when running an analysis using OECD data is not in how they are calculated but in the extent of the Indirect and Induced effects within a region for a Sector. The Direct Multipliers are always one. If the Sector in the region imports more of its inputs and if more households make purchases outside the region then the Multipliers will be smaller. In addition, - Germany is a smaller country than the U.S. and would be expected to have smaller RPC's for many commodities.
Another reason is that in the OECD data, (PI) Proprietor Income is not separated out from OPI (Other Property Income); rather, there is just a single GOS (Gross Operating Surplus) category and it is not endogenized (i.e., it is treated like a leakage like OPI is in the standard IMPLAN data and does not generate Induced effects). Thus, Multipliers for all OECD countries will be somewhat lower due to this (including the U.S. OECD Model). If you are comparing to a 'normal' (i.e., 536-sector) U.S. Model, the Multipliers are not comparable because the U.S. Model spends PI, which increases the Induced effects and thus the Type SAM Multipliers.
Learn more about how the OECD data is created, what information it contains, and the possibilities and requirements for ordering custom created city, state, or provincial level international data sets.