Benefits from Household and Visitor Spending

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    IMPLAN Support
    Hello Lorianne, Household spending, by definition, only generates Induced Impacts. Households do not purchase Intermediate inputs used in the process of creating a product or service; therefore, Households themselves do not generate Indirect Effects. IMPLAN does not automatically predict tourist spending based on impacted sectors. If you model the impacts of the construction of the museum, it will only look at the impacts generated by the process of building the museum. Similarly, modeling an impact in the museum sector only provides impacts related to the operations of the museum. Therefore, you will need to model tourist expenditures separately. An example article is provided in the link below. Impacts of Wildlife Tourism http://support.implan.com/index.php?option=com_content&view=article&id=277 Regards, IMPLAN Staff
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    ldefalco
    Thank you for your prompt reply. I do have some follow up questions. Are you saying that new household spending (e.g. consumer expenditures from newly created households) would only generate Induced impacts and therefore would not generate any direct or indirect effects, including jobs? We did model consumer expenditures from new households on a past project (we distributed the spending among different retail sectors based on a consumer expenditure report) and the model did produce direct, indirect, and induced effects. So are you saying that even though the effects were labeled that way in reality they are all induced effects?
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    IMPLAN Support
    Hello Lorianne, It seems like some of the concern you have may be around if there would be a difference in the total number of jobs or the spending effects of new local households based on whether or not they are defined all as Induced Effects or split out across definitions of Direct, Indirect, and Induced. If the Model is used properly they should result in the exact same impact results - one just being rolled into a single line (Induced Effects) and the other split across Direct, Indirect, and Induced. It sounds like in a previous Model you used a Household Spending Pattern which ‘redefines’ households as Institutions and thus their spending as Institutional spending. This methodology requires that you remove: • Payroll taxes • Income taxes • Savings • In-commuters from your initial value prior to running it through the Model. But the results will yields Direct, Indirect, Induced impacts. Household spending can also be examined as a Household Income Change Activity Type, which yields just Induced Effects as described earlier. Unlike the Household Spending Pattern, for this Activity Type you need only remove, if relevant: • Payroll taxes • In-commuters Because a Household Income Change is not looking at households, definitionally, as Institutions but rather as increasing spending as a result of income from some other Industry base activity, it rolls up the same Direct, Indirect, and Induced results that you see from the Institution Spending Pattern into the Induced line. If proper values are entered into these two Activity Types, then the results of a Household Spending Pattern and the results of Household Income Change should be the same. You can also treat new household spending like tourist spending, so that it results in Direct, Indirect, Induced and Total Effects; however, this requires you to know how much households spend and every item they spend on. You can, as you have done, capture your consumer spending as Direct Impacts to the respective industries. Your results provide Direct, Indirect, and Induced values. So defining the impact generated by consumer spending as "Direct, Indirect, and Induced" or just "Induced" comes down to how the study is framed. Regards, IMPLAN Staff
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