Affect of LPP on direct employment
Hi,
I'm trying to run a quick analysis on a company in Clark County, NV using the 2015 dataset. I have the sales, employee count and LPP from the company. I put all the sales, 3.54 million, into one sector (493). Interestingly, the number of employees in IMPLAN comes out to the same number that we received from the company, 41. They provided us with an LPP of 0.7, which is a bit higher than the SAM value.
After running the scenario, the results for direct spending in the county is 70% of the input total. This makes sense and I expected due to the LPP. What I don't understand is why the direct employment is at about 70% of the original 41 as well. All those 41 jobs still exist for certain in the study area. I would think they shouldn't be affected by the LPP, at least in this case. How should I deal with this?
I thought about applying the 70% to sales manually while using employment, compensation and proprietor income from the model for the original sales input, then changing LPP to 100%. But I'm not so sure that's a good idea.
Thanks!
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Hi Hubert,
Local Purchase Percentage (LPP) represents the portion of the Direct Effect that takes place within the study region. If the entirety of your Direct takes place within the study region, then your LPP should be set to 100%. Most analysts determine their inputs based on the study region; therefore, the default LPP is 100%.
The rates at which an industry purchases intermediate inputs locally are determined by the Regional Purchasing Coefficients (RPCs) for each commodity. These will automatically be applied.
You can find more about using Local Purchase Percentage at the link below:
Using the Local Purchase Percentage Field
Thank you,
IMPLAN Support
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