State proprietor's income larger than national
Using Georgia data (2008, implan v3), I have entered an industry sales change for sector 31, power generation. I am doing a custom model by changing both the employment level and the and employee compensation. These were both given to us as known. Interestingly, however, proprietor's income at the national level is estimated by implan as smaller than at the state level, even when entering identical numbers for industry sales, employment and employee compensation for both state and national models. What is the explanation for this? Maybe I am missing something simple. The reason the direct effects for the state are entered the same as those for the national level is because these electricity sales are all contained within the state of GA (again, something that is very likely given the client's assumptions and other information gathered). If employee compensation and proprietor income is added together at the state level and the national level, both sum to approximately the same number, with the nation being slightly larger, but the split is substantially different...Is this just a case where Georgia's electricity generation is in some way substantially different from that of the nation?
-
The national data set's output per worker, earnings per worker, proprietor income per worker, etc., is the average of all states. So, yes the relationships for a state will differ from the US relationships. Data for proprietor income, proprietor employment relationships come from the BEA REA (formerly REIS) data sets - and as there is only one power generation sector is generally disclosed and not subject to our estimation machinations. If you want to see the comparable Georgia impact on the US model, you will need to edit the US model to reflect the GA specific industry ratios. If you know that the power firm that you are modeling is a corporation, then proprietor income will be zero. -
So, if it's a corp, no proprietor's income at both the state and national level? The reason I ask, is that I am looking at an example in my booklet from an implan workshop held this spring that specifically uses the power generation industry as an example for an analysis-by-parts problem. It includes both Employee Compensation and Proprietor's income (slide 196, dated 1/15/2011), but makes no distinction between corp or non-corp. -
If the user doesn't know the ownership, then accepting the default mix in the data is an acceptable route. Note for 2008 in sector 31 (power generation) US proprietor income is 23.2 billion and GA's is 1.2 billion. However, for a given 1 million of output/outlay, a greater proportion of that money may go towards proprietor income in GA than on average for the US.
Please sign in to leave a comment.
Comments
3 comments