$0 direct effect in analysis

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    jenny
    An Industry Spending Pattern represents the first round of indirect effects - the inputs purchased by the industry. Previously, these expenditures were reported in the impact results as "direct" effects, although they were technically the first round of indirect effects. Users were then advised to adjust the impact results to move the "direct" impacts to indirect. This was an intentional change we recently incorporated into the software in order to make the interpretation clearer and save you the effort of having to manually move the reported "direct" impacts over with the other indirect impacts - we simply did the move for you. So all the impacts are still there, they're just combined now in the correct column.
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    sdsusportsmba
    That was fast, Jenny. Thanks for responding so quickly. You're right, I remember the "direct" column actually being the "indirect impact" in previous versions. To be clear, this is now properly labeled as "indirect," while the "induced" economic impact remains the same with the new software?
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    jenny
    Correct - everything is now in its right place, with no re-shuffling required :)
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    sdsusportsmba
    I've got another question, actually. I saw a recent study published that noted a multiplier of 1.29 for an event in the Chicago area that did not use IMPLAN for the indirect/induced economic impact. The link to the study is below: http://webmedia.bankofamerica.com/aheadbankofamerica/v4/Reports/Bank%20of%20America%20Marathon%20Economic%20Impact.pdf In setting up activities for the direct spend, inputting both the Industry Spending Pattern and Labor Income Change, the multiplier I've received for the same market (county level data) is only half of the 1.29 reported in the above study. Is there a way to explain the discrepancy? Are inputs incorrect if the total of indirect/induced impact is < 100% of the direct spending? Thank you!
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    jenny
    Since the study you are referencing was not performed using IMPLAN, it is very difficult to compare results. Since there is no "tourism" industry, most tourism-type studies use a series of Industry Change events (for each of the various tourist expenditure categories), with LPP set to SAM Model Value. So I'm somewhat confused, as you seem to be running an Industry Spending Pattern analysis and an associated Labor Income analysis - these will give you the indirect and induced effects only, so in this case the direct effect needs to be added back in. You can calculate this by determining the Industry Output associated with your budget by using the study area data: Go to Study Area Data, scroll down to whichever sector you're spending pattern is for, and calculate (Output/Employee Compensation). Then multiply this ratio by your payroll figure. The resulting Output estimate would be your direct effect. Multipliers can be calculated as the Total/Direct or (Direct + Indirect + Induced)/Direct. Multipliers for a tourism study can be calculated in a couple of ways. You could say that the entire expenditure amount (say $1 million) is the direct effect or you could say that just the local expenditures are the direct effect (this is the direct effect reported by IMPLAN). In your Industry Spending Pattern analysis, an indirect/induced impact that is < 100% of the direct spending is typical, as many of the industry's inputs will typically be imported.
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    uradhakrishnan
    I understand that the software has not been updated for industry chnage activity using analysis by parts i.e. direct effects still need to be added to indirect effects. Please confirm. Thanks,
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    IMPLAN Support
    Hello Uma, You are correct. The Industry Change methodology was not designed to be used with Analysis-by-Parts, it was presumed that the Industry Spending Pattern Activity type would be used for spending pattern analysis. If you are using Industry Change Events with dollar values rather than coefficients of purchase, your reported Direct Effects, will be the first-round Indirect Expenditures. Please note also that if you use this methodology, you will want to set Local Purchase Percentage for all your budgetary Events to SAM Model Value so that you don't overestimate the first round Indirect impacts ( Event Options> Edit Event Properties>Set Local Purchase Percentage> SAM Model Value; .) Please let us know if you have any additional questions.
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