Combining Ind. change with Ind. spend pattern

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16 comments

  • Avatar
    DougO
    If you plug in the number of employees, the software will generate the output (industry sales). The appropriate portion of this output will in turn drive the indirect effects. Specifying the 10 events (indirect effects) will double count that amount of money spent on those 10 items. What are the dollar totals that you have? I think I would plug in the employment to get labor income totals, then do an analysis by parts. 1) import the industry spending pattern and modify the 10 events you do know and let the others conform to the total amount of the non-payroll spending that you do know for the indirect and induced from the indirect effects. 2) run the labor income change activity type to get the induced effect off of the direct payroll.
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    sdm
    When I run the spending pattern, is there a way to turn the coef into a dollar figure? Since if I put a total in for the activity it does not allocate correctly. Or do I just change the coef to represent the total number for that event, back into the total? The spending I know includes, other than employment: Lease equipment 1M Fuel .5M Mfg Equipment 45M Construction non-res other 2M (office building etc) (Not in spending pattern) Engineering 2M (special services contract) Power.03M I do not know any of the other spending items- and most of those are very small even if I did.
  • Avatar
    DougO
    The manufacturing equipment is not part of a new structure construction spending pattern. I am not sure what "Construction non-res other" means. Is this the unspecified portion of the purchases of goods and services by the construction? The employment will need to be converted to annual average (employment * length of project/12 months). If the 2M is non-specified construction spending then: 1) import the industry sector. 2) Zero out the known items' coeficients 3) Normalize the vector (force it to sum to one). "Normalize" is under Event Options>Change All. 4) Set the activity level to 2,000,000 to get this part of the indirect effects. 5) Run the known items as events in a separate activity.
  • Avatar
    sdm
    Run the wages (those are annual) and construction in one activity, then with these few line items run each line item separately in the spending pattern and substitute their indirect and induced in the analysis of parts.
  • Avatar
    DougO
    If you run the wages, through the labor income activity type. The two million through the imported industry spending pattern (another activity) and the line items (third activity). The three activities can be combined into a single scenario. The labor income change only reports as induced effects. The "direct" effects will actually be first round indirect (from the construction spending) so add the direct to the indirect. The direct output is the total value of construction, direct employment is the construction employment and the direct income is your wages.
  • Avatar
    sdm
    So when one has a big capital equipment or service expenditure like I do in this case, which run concurrent with labor expenditures, this is the best way to capture those different flows. thank you.
  • Avatar
    DougO
    Actually, forgot about the equipment purchase. I think I would run and report that separately. May not be much of a story if it is all imported.
  • Avatar
    sdm
    You lost me a bit on post 9143. I was given the number of employees so I will run it that way through the industry. Correct on machinery- not much there. On my single activity line item spending pattern items, like you stated, take indirect and induced and insert into my main industry model run results. I do that for each impact employment, value added, output, etc. My main industry run also includes an activity for the construction of buildings. The analysis of parts is important in this case, since the spending which has been communicated to me is different in part because how they plan to operate is different than the "model" industry.
  • Avatar
    DougO
    I was suggesting plugging in the employment, only so the event line would tell you the associated employee compensation which you could then subsequently run as a labor income impact. If you run an impact with simply plugging in employment, you will double count the single activity line items - as it will derive both the induced effects of the employment - good - and the indirect effects of the calculated industry sales - bad, as it will double count your line items.
  • Avatar
    sdm
    I can see how I could double count on those items, but I am substituting in the analysis of parts doesn't that take care of the double count. Lost...I ran the labor income change but of course I only get induced. My line items (five of them are small) I have lost the rest of my analysis direct and indirect. What did I miss here. I still have to run an industry model to capture the rest right?
  • Avatar
    DougO
    if the line item are only a small part of the overall spending you can either, 1) just ignore the 5 items; 2) Import the industry spending pattern and run the intermediate spending net of the 5 items along with the 5 items specified or 3) run it with the output and ignore the double counting.
  • Avatar
    sdm
    I think that is my problem I do not have total spending. I was given labor year one 12 employees, and then 5 line item expenditures, fuel, electric, etc. Is there a way to run with those inputs.
  • Avatar
    DougO
    The data you need is there in the study area data. The easiest thing to do is: 1) Create an industry change activity type for the desired construction sector and plug in the 12 jobs. The software will calculate for you a) Output (industry sales) and b) employee compensation. Don't run this as an analysis, just note the values. 2) Go to Explore>Social Accounts>Balance Sheets>View by: industry balance sheet and select your sector. Under the commodity tab, the proportion of intermediate output (gross absorption total) to output can be found. Apply this proportion to output from step one to calculate intermediate output. 3) Adjust the intermediate output by subtracting your 5 line item values. The result will be the activity level for the imported industry spending pattern (Setup Activities>Activity Options>Industry spending pattern then choose the industry). You will need to normalize the pattern before using (Event Options>Change All>Normalize) to force the coeficients to sum to one. 4) Run step 3 combined with an industry change activity type that includes your 5 line items to calculate indirect effecets and the induced from indirect. 5) Calculate the induced effects by running the employee compensation from step one in an Labor Income Change activity type.
  • Avatar
    sdm
    Doug, If you could give me a call one the clock that would be great, I cant get through to your help line- to tell them to have you give me a call. S
  • Avatar
    sdm
    I have been unable to get the petroleum refiners to to give me the same number as we calculated. I started with 1.3M, select margin yes, then wholesale to 0, LPP is set at RPC level of .03% I still end up with the 1.3 million not the sales? When I select the event in the beginning I am getting an error that says the industry does not exist in the model.
  • Avatar
    DougO
    It gave the message to me as well, but it is not an error. The industry does not have to exist if we are margining. As long as the margin sectors exist (wholesale, retail, transportation) there will be an impact. The direct effect will not be 1.3 million as the producer value and some of the wholesale and transportation values will not be local. Only the local value applied to multipliers become direct effects.

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