Modeling Public Subsidies

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    jenny
    Hi Carl, The more information you can gather, the better, but IMPLAN will fill in any blanks for you based on averages for that industry in your study area. For instance, if you know Employment or Employee Compensation (i.e., payroll costs, which include all benefits and employer-paid social insurance taxes), you can enter either of those and the software will automatically estimate the others for you based on average output per worker in that industry in your study area. You can override IMPLAN’s estimates with your own if you have the data. Construction and operation should normally be reported separately, as construction is a one-time event and operation is continuous. For the construction phase, the simplest approach would be to use an Industry Change activity type using one of IMPLAN’s four construction sectors (a description of the types of construction included in each category can be found here: http://implan.com/v3/index.php?option=com_docman&task=doc_download&gid=115&Itemid=138). The value to be entered in “Industry Sales” for an Industry Change impact on the construction sector represents industry Output and thus needs to not only include the project budget (intermediate purchases + payroll, including benefits and employer-paid social insurance taxes), but also profits and taxes. This is the value of the completed structure net of land cost, real estate/legal fees, and preparation. This is because Output = Intermediate Purchases + Value-Added, and Value-Added includes Employee Compensation, Proprietor Income, Other Property Income (largely corporate profits), and Indirect Business Taxes. If you don’t know the Output, you can either: a. Get an estimate of it using your budget data and the industry data in your IMPLAN model: 1. Under Explore>Study Area Data, scroll down to the sector in question. 2. Divide Output by Intermediate Purchases to get a ratio of Output per Industry Purchases 3. Multiply that ratio by the non-payroll portion of your budget. This is your value to be entered as “Industry Sales” in the impact set-up. b. Do an analysis by parts. That way you would just use the materials cost and the labor cost in two different impacts. There is a tutorial on ABP in this document: https://implan.com/v4/index.php?option=com_docman&task=doc_download&gid=108&Itemid=7. If you can justify that residents of the development would live locally rather than in-commute solely because of the existence of this subdivision (i.e., the residents will represent new money for the region), then you can claim the income expenditures of those households as in the tutorial. If the project satisfies pent-up demand (i.e., housing is restricted due to price, lack of land, zoning, etc.) then the impact can be credited at least to the policy that allows the project to go forward. Please note: Since this housing is to meet the needs of some business then these residents’ spending is the induced portion of the that business’ impact and should not be counted separately from any impact analysis of the factory (that would double-count the induced impact).
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