Multiplier Specification in IMPLAN

Comments

3 comments

  • Avatar
    IMPLAN Forum
    Hi Omkar, Thank you for your forum post! http://implan.com/index.php?view=download&alias=56-type-sam-multiplier&category_slug=studies-1&option=com_docman&Itemid=1764 The above article is the most descriptive example of why the SAM Multipliers do not endogenize Institutions beyond Households. Here are some additional thoughts that may be helpful: > Endogenizing State & Local Governments assumes that all monies collected in taxes are re-spent in the Study Area. There may be some cases in a statewide Model where an argument for the legitimacy of this claim may be made, but in sub-state regions, it is typically unreasonable to assume that all State & Local Government taxes are re-spent in the area where they are collected. In addition, the same connection that exists for Industries - that monies must in affect be 'spent' as OPTI, TOPI or operational expenses doesn't necessarily hold true for governments, nor does a fixed rate for how those expenditures will occur or which expenditures will be triggered by a tax collection in a specific Industry. Thus it is not considered to be a standard function of the Model to assume that taxes are spent in a fixed fashion, in the geography and year they were collected. The Model does give you the option to Model known specific government expenditures if you have the knowledge and data however, without endogenizing these Multipliers. >This same rule of geography, year, and spending pattern is typically even more pronounced/applicable for considering endogenizing Federal taxes. >Endogenizing Captial- assumes that increased growth will force increased investment, which is not necessarily a safe assumption, especially when you spread this affect across all Industries bye endogenizing this factor. If you have specific Capital Expenditures that you know is occurring this also can be modeled for the target Industry without assuming that all Industries in a region will increase investment. Please let us know if you have any additional questions, Thanks,
    0
    Comment actions Permalink
  • Avatar
    Omkar Joshi
    Thank you very much. This is very insightful report by Doug. What would be best way to cite discussions we do in this forum to defend our case for a peer-reviewed publication?
    0
    Comment actions Permalink
  • Avatar
    IMPLAN Forum
    Hi Omkar, We appreciate you wanting to properly cite the forum post. We suggest the following: Day, F. (2016, January 19). Multiplier Specification in IMPLAN. [i]IMPLAN Support Forum[/i]. Retrieved (this is when the post was downloaded) Month day, year, from http://implan.com/index.php?option=com_kunena&view=topic&catid=80&id=19282&Itemid=1840. Thanks!
    0
    Comment actions Permalink

Please sign in to leave a comment.