Output by parts greater than industry alone

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    jenny
    Hi Christy, One thing to note is that a line-item budget is not the same thing as Output. Output not only includes intermediate expenditures (supplies, utilities, etc.) and payroll, but also taxes and profits. Thus, if you enter a budget figure in as Output, the software is not going to spend all of that amount on inputs and labor – some of it will be “leaked” to taxes and profit. If you don’t know the actual Output for your organization, you can either: a. Estimate it using the industry’s Output-to-Intermediate Expenditures ratio, which is an average for all firms in the industry. Multiply this ratio by your Intermediate Expenditures figure to get an estimate of Output for your firm. b. Run analysis by parts. In this case, the results would be reported along the lines of "This is our budget, these are the jobs associated with that budget, and this is the additional economic activity supported by these budget expenditures." We are somewhat unclear as to how you ran your analysis by parts. How exactly did you run the individual parts? Any additional details would be appreciated. And just to confirm – you are using Version 2 of IMPLAN?
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    C Risch
    I do know the organization's total budget and because they are a non-profit and pay very little taxes those items seem trivial. There is about $59 K in sales taxes which I put into the industry when I edited it (# 471). I made OPI -$59 K to balance the coefficients. Maybe not kosher, but it is a very small amount of money. I ran the employee compensation figure of $4.445 million separately using the HH $35-50K institution and $4.9 million using industry #471 imported. Originally I ran the total $9.4 million in industry 471 but get different sum for indirect plus induced. For parts I add the first round of direct to the multiplier effects but for the industry alone that is already included in the effects, right? I'm sure I'm interpreting something incorrect. We use IMPLAN V 2.0.1025
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    jenny
    The coefficients in an industry's spending pattern do not sum to 1.00 - thus, the entire budget amount (including payroll) should be your impact value. The software will multiply the value you enter by the sum of the industry spending pattern events (which is less than 1.00) - the resulting value is then run through the multipliers.
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    C Risch
    That is not the issue. I have employee compensation as a coefficient (0.48); spending is 0.52.
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    jenny
    Just to confirm then: For the abp, you are using an imported industry spending pattern and the value you are entering into this impact is the TOTAL budget? This would be the correct way to do it. Another possible source of discrepancy: For the abp, did you run the $4,445,002 income value through sector 10005? When you use one of the HH spending pattern sectors, the entire amount you enter is spent on goods and services because the software assumes that the value you have entered is disposable income (i.e., income after personal taxes and savings have been removed). Yet the $4,444,002 value is Labor Income (rather than disposable income) and should be run through sector 5001 (employee compensation) or 6001 (proprietor income) or some combination of the two (the appropriate split between the two can be determined by the study area data).
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    C Risch
    Ah, that is it. I did use a HH sector. I will try it with sector 5001. thanks.
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    C Risch
    I did it and the results are much closer. One question: Why is there such a large amount of direct output going to the Federal non-defense sector? I get $800 K out of the $4.445 million going there. Thanks.
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    C Risch
    Before you answer, I'm guessing it's taxes. Duh.
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