avian flu impact

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    IMPLAN Support
    Hi Michael, Thank you for your post! To measure the impact of Avian Flu, I recommend either start at the point of production or at the point of processing but not both. In the case of a known Avian Flu outbreak, the birds would not even be allowed to leave the farm and would be destroyed on sight to prevent the potential spread of the virus. The farm(s) where the Avian Flu outbreak occurred would be quarantined, nothing going into the farm and nothing leaving the farm. IMPLAN looks at backwards linkages, so as a result of looking at decreases in the processing Sector you would see a decrease in poultry production, but there are a couple of additional considerations. For example: 1) IMPLAN will reduce the purchase of poultry according the RPC for the poultry Sector, but of course the RPC in a circumstance like this might not be an accurate representation of the removal of specific farms that may represent a larger or smaller than average contribution to the regional poultry processors. 2) Because of the inherent nature of the backward linkage calculations, the assumption of reducing poultry processing will reduce the demand for poultry and then less birds are produced, so the backward linkages of poultry production should be reduced. But in fact this is not the case in a situation like avian flu, some or all of the inputs are already invested in the birds that are slaughtered to control the virus, so a simple reduction of the backward linkages of poultry production may actually in-and-of itself result in an overestimation of an annual impact. We certainly can't speak to how any study was done, but one method to attack both these problems would be to use the Analysis-by-Parts techniques to split the Sectors from each other and to control the loss of Intermediate Expenditures from the poultry producer. In the first Analysis-by-Parts method you would import the spending pattern for poultry processing, and remove the purchase of poultry from the spending pattern. This now constrains the processing Sector to no longer make the poultry purchase you will be modeling in the second Analysis-by-Parts Scenario. You will want to leave the Sum of Event Values at the new rate (it will be less than 1.00) enter the negative change of Output for the Sector for the Activity Level and then create a Labor Income Change Activity for the compensation component of the poultry processing. If you don't have Labor Income estimates for you Labor Income loss those can be derived most quickly by creating an Industry Change Activity (that you will not analyze) that you can use with your Output value to estimate the Labor Income losses. The second Analysis-by-Parts component isn't done to constrain a specific purchase but rather to appropriately reduce the loss of Intermediate Expenditures from the poultry farm. In order to most accurately measure this you would need to know how much of the annual expenditures for supporting the destroyed animals was already spent. The loss then entered in the spending pattern component would be the remaining annual value not purchased (assuming any) by the farmer for his farm's production for that year. Likewise some Labor Income might also have already been paid so the reduction of Labor Income would likely be less than that of a true loss of the Sector. One other consideration is that often Agricultural activities receive additional support from the federal government in cases of production loss. If this would apply to the farms losing chickens in your region then this could further offset the Labor Income and potential subsidize the farmer's startup or restart- once the farm is again able to operate. Hopefully this helps --Implan Support Staff

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