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    IMPLAN Support
    Hi Kathy, When you are examining the contribution of a single firm or it's removal, the situation lies somewhere between the reported effects of an impact analysis, which examines a change in the economy, and a contribution analysis which shows what an industry requires in the current economy. For a single firm, the former will results in somewhat of an overestimation, the latter in somewhat of a conservative view. Many times users will run the analysis both ways and then try to determine an average or mean of the two studies as the likely result. The purpose of the contribution analysis, is to restrict the Indirect and Induced purchases of an industry so that the result for that industry is not larger than the size of the industry itself. For example if I know that Sector 99 Wood Windows and Doors has a total production of $80MM in my region and I run an impact analysis the result to Sector 99 will be let's say $85MM. If there is only $80MM of production in the region, I cannot have a result that indicates $5MM more production than the region supports. The contribution analysis allows us to restrain the model (the methods vary between single industry and multi-industry) so that the results of the impact is $80MM to Sector 99. However, if the firm is one of many in the region, Indirect and Induced purchases may occur that are not coming part of the production of that specific firm. In the contribution method these additional purchases are lost, in the impact method, purchases to that firm are not restricted. This is the reason we typically recommend doing both and then using an average,e or another factor of your determination if you think you have a better estimation, for determining where a single industry lies between the two. One other consideration, if you are looking at the removal of an industry, the IMPLAN model is linear so it will project the same losses as it would gains for a given level of Output. With negative impacts, it is important to keep in mind that the social structure of the economy will mitigate some of the negative impacts. For example, while there will be loss of wages and salaries resulting from job losses if a company goes out of business, there will some recovery of wages due to unemployment insurance, that IMPLAN will not be able to take into account. Regardless of the method you choose or if you choose to do both, you will use the Industry Change Activity Type, unless you are wanting to alter the input purchase structure of the company from IMPLAN's spending pattern. Please let us know if you have any additional questions.
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