LPC in household income
I have some questions regarding modeling household income change, mostly on LPC. Say, I am running impact analysis for three counties in California, San Francisco, Alameda, and Santa Clara.
I am trying a single IO for each county and MRIO for all three of them (3 MRIOs)
It looks like that when I model household income change, I cannot click LPC and set to SAM value - my IMPLAN will crash if I do. But I think I would be able to find the percentage from SAM and change the user LPC. (or maybe I should not do it?)
If I should use LPC for household income change, suppose LPC for Santa Clara is 0.6, and the total household income change is 100,000, when I run an activity like this, IMPLAN will show me the impact from 60,000 household spending, adjusted for tax and saving, right? But how should I model the rest 40,000 of household income change, if the only information I have is that the households spend the 40,000 outside of Santa Clara?
And if I run MRIO, will the household income change and LPC automatically adjust themselves? For example, I put 100,000 and 100% in Santa Clara model linked with San Francisco and Alameda, and say that the residents in Santa Clara typically spend 60% locally, and 20% in San Francisco, 10% in Alameda, and 10% rest of the world, will IMPLAN automatically adjust the regional spending patterns? So, in the results panel, the impact, if we click Santa Clara model, will be the total impacts from the 60% locally, and indirect and induced from 20% in San Francisco and 10% in Alameda.
I made up the percentages, they are not the SAM value.
I might have asked lots of questions. Thank you very much for your help!
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Hello Jacklyn, The Local Purchase Percentage (LPP)/Local Purchase Coefficient (LPC) field is used to limit the amount of your input value that is applied to the multipliers. 100% means that the entirety of the value is applied to the multipliers. Set to user LPC lets you modify the value to your known value. The Set to SAM feature is not available for use with a Household Income Change. Set to SAM sets the LPP/LPC to the average Regional Purchasing Coefficient (RPC) value for the commodity in question. It is most commonly used when margining producers. You can see more about the use of LPP in the link below. Using the Local Purchase Percentage Field http://support.implan.com/index.php?option=com_content&view=article&id=469 More importantly, from the description of your study you do not want to use LPP/LPC to affect how much spending is taking place in your region. In a Household Income Change, the input amount represents how much income is being received in the region, not how much is spent in the region. From that value, taxes and savings are removed. The remaining value is spent on commodities based on the specific household's spending pattern. How much is bought locally is determined by the individual commodity RPCs. What is not purchased locally is considered imported, at which point the MRIO process then determines what of the imports is purchased from the connected model regions. Regards, IMPLAN Staff
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