Puzzling Result

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15 comments

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    aarshad
    I meant the direct effect on Labor Income and Value Added for the County shows larger figures compared to the direct on Labor Income and Value Added for the State of Washington. I am using the 2008 data for County and State.
  • Avatar
    DougO
    The Labor Income and Value Added to output ratios will be a little different for every county. The state will essentially be the weighted average of all the component counties. If you wish to see what the impact of a new firm has on a county, then see the impact on the state for the same firm, you will need to edit the state study area data so that the output per worker and output per dollar income are the same for the state as for the local area. That way the direct employment, income and output will be the same for both analyses. Or you could do an MRIO linking the county with the rest of the state counties. You would expect that the direct effect would be the same for whatever region you compare to, it is the indirect and induced effects that one would normally expect to be bigger with a more encompassing region.
  • Avatar
    aarshad
    Doug, How do I edit the state study area data to make it compatible with County area data? I am using the County Plus Data to determine the impact on the County and the State Level data to compare the impacts.I don't think I could do MRIO, since I am using County Plus Data. Am I correct? I did expect the direct effect to be the same but it came out larger for the County compared to the state.
  • Avatar
    DougO
    If the output per worker is higher for the state, when plug a $1 million event, the direct employment will be a smaller number than when you plug a $1 million event into the county. To edit the state first look at the employment ratios for the county for the directly affected industries: Customize>Study Area Data> and choose the industries. Then Customize>Study Area Data> and choose the same industries in the state model and apply the per worker ratios to the state industry's employment to replace the other indicators (output, proprietor income, employee compensation, indirect business taxes, and other property income). You will need to "unlock" (make sure the Lock box is unchecked.
  • Avatar
    aarshad
    I did all the changes as you advised. So now I get a message in red in the bottom left corner saying "Your IMPLAN model has changed,you will need to reconstruct your model," but the Set Up Activities section is all gray. How do I change the model?
  • Avatar
    DougO
    Construct multipliers through the menu: Options>Construct>Multipliers
  • Avatar
    aarshad
    I was able to ungray the gray area, and then I rebuilt the model, but it made the difference between the County and the State slightly larger. In other words, the State income and Value Added were smaller than the County's. The Employment figure for the State is larger than County's, and the Output figure is exactly identical for both. I am wondering if there is any economic explanation for this?
  • Avatar
    DougO
    By definition, the direct output effect is the sales value you applied to the multipliers. If you apply the same sales value to whatever region, the direct output will be the same. The direct employment for an industry equals Direct Output/Ouput per worker. If you had modified the state industry to match the sub-region and applied the same direct output, the direct employment should also be the same. This is true for any variable (employee comp, employment, ibt, opi, proprietor income). Double check the output per worker for the state and county/zip code area for the industry you are impacting to confirm that they are the same.
  • Avatar
    aarshad
    Everything checks, but still the same result.
  • Avatar
    DougO
    Zip up the two models (impdb files in the appliance \implan user data\models directory) and e-mail them to info@implan.com and in the e-mail ask them to forward them to me.
  • Avatar
    aarshad
    I emailed the zip files. Thanks for looking into it.
  • Avatar
    DougO
    ok, my fault. I needed to tell you to re-create the activity (as the existing one keeps the ratios that existed at the time creation). Actually, it is simpler to import the activity from King into the state model as the ratios will update at that point (Setup Activity>Activity Options>Import>From a model...then browse to the King County model. Your employment ratios are correct, but you still need to edit the value added components.
  • Avatar
    aarshad
    Okay, so I imported the King County model, should I put the King County's Value Added in Washington State model?
  • Avatar
    DougO
    Do you mean you imported the activity from King County model? You will need to edit the value added ratios in the State Model to match King county, then reimport the activity so it uses the new ratios.
  • Avatar
    aarshad
    Thanks, Doug. I think it worked. You are awesome!

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