Intermediate Expenditures and LPP

Comments

2 comments

  • Avatar
    IMPLAN Support
    Hello Hubert, When working with an Industry Change activity, the Local Purchase Percentage (LPP) determines how much of the Direct Impact takes place within the region. In most cases, users base their input values on the Direct Impact that occurs in the study region; therefore, the LPP would be 100% (which is the default in IMPLAN). How much of that Direct Impact results in purchases of local commodities as part of the industry's Intermediate Expenditures is determined by the commodity specific Regional Purchasing Coefficients (RPC). These purchases are the first wave of Indirect Effects. Setting LPP to SAM is equivalent to setting the LPP to RPC value (when working with an industry change, this value will be equal the RPC for the primary commodity produced by the industry). For construction we suggest only entering values associated with the construction occurring in your study region and leaving LPP at 100%. With an Industry Spending Pattern, you are starting your analysis at the first wave of Indirect Effects. The LPP values shown are the commodity specific Regional Purchasing Coefficients. You can see this by comparing LPP values in your spending pattern to the RPC column of the Commodity Summary table. Social Accounts > Social Account Reports > View by: Commodity Summary. The below article delves deeper into this topic. Using the Local Purchase Percentage Field http://support.implan.com/index.php?option=com_content&view=article&id=469 Regards, IMPLAN Staff
  • Avatar
    hhensen
    I was just trying to figure out how the intermediate expenditures and their LPPs relate to the primary sector spending. Your first and third paragraphs explain that part pretty well. Thanks for your help.

Please sign in to leave a comment.