Setup Questions and Clarifications

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    Jenny Thorvaldson
    1. This is probably the least certain aspect of the analysis and really depends on your knowledge (or assumptions) as to what the farmers will do with the funds. a. It seems unlikely that they would change their level of production, so I don’t think there would be any impact to the agricultural sectors. Of course, if you know otherwise, feel free to model it that way. Just be clear in your report exactly which assumptions you are making and why. b. Would the farmer invest it? Purchases or new equipment or repairs to existing equipment should be counted if the equipment is purchased from a local dealer or the repairs are done by a local person. Note: if you were to model the machinery purchases, you would want to attribute the sales value to the machinery manufacturing sector, apply margins, set LPP to SAM Model Value, then edit the LPP for the Retail or Wholesale sector (whichever one the purchase was made from) to 1.00. This ensures that the equipment/machinery was purchased locally, even if it wasn’t manufactured locally. c. Put into all into a savings account? No impact. d. Spent in the same pattern as they spend all their other labor income? In this case, you would import a Household Spending Pattern that matches the farmers’ average income and set the Activity Level to amount of funds. e. Something in-between? You could run a couple of the above scenarios and present them as possible alternatives, though I would recommend using the most conservative approaches - i.e., either no impact or some small percentage of the funds get spent locally. In any case, you would not want to run the funds through the Real Estate sector – this sector would be for things like rental payments and real estate agent fees. 2. Yes. I would just be clear when reporting the results that those impacts will not be recurring for each of the five years – you are presenting the total 5-year impact. 3. a. You are modeling it correctly. b. Unless you change the underlying study area data (after which you must reconstruct the multipliers), you are correct. However, I am somewhat confused by what you mean when you say “input a labor LPP value of 10%”. 4. This is fine but which sector did you assign to labor? To get the effect of the construction workers spending their income, you would want to use a Labor Income Change Activity. There’s not really an LPP for labor – if 10% of the workers live in region A, then you would simply set the Activity Level for region A’s Labor Income Change Activity to 10% of the total payroll.
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    John Wynne
    In response to 3 and 4: We have two main categories in our analysis: Material ands and Installation. The materials we have broken down into pipe and other categories of items required to build a pipeline and this seems pretty straightforward. However, the installation seems a little less clear. We are assuming that the installation requires a combination of heavy machinery and construction labor to install the pipeline. It has been mentioned before that there is no specific pipeline construction sector but that we could use Sector 36 to account for pipeline construction even though this sector includes a variety of construction activities. Therefore, can we assume that all installation costs fall into Sector 36? For example, if $1 million was allocated for the installation of a pipeline it is theoretically sound to apply this $1 million to industry sales column for Sector 36? Are we double counting in anyway? Please advise. Thank you.
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    Jenny Thorvaldson
    As for using sector 36 for the installation, that is fine. However, we are still unclear as to what you mean when you say the LPP for labor is 10% - if you could describe exactly what you know about the labor (e.g., employees, payroll, how many live within each of the study areas) or what the 10% represents, we can try to help you set it up so that you are modeling exactly what you are meaning to model.
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    John Wynne
    I had meant to type 50%. We are assuming that 50% of the labor used in installation is hired within the region and 50% is hired from outside the region. Therefore, is it correct to set the LPP to 50%?
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    Jenny Thorvaldson
    In this case, you could customize the event to set Employee Compensation to half the value that IMPLAN fills in for you. However, IMPLAN may already take some EC out for commuters based on the regions' net in-commuting rates. You have 3 MRIOs which makes this complicated fast. For instance, do you mean that 50% of the installation labor lives outside of the 9-state region? Or does some of the installation labor in region A live in region B? The MRIOs will take care of the commuting between the 3 regions but if some of the labor is from outside the 9-state region, you will want to adjust the EC down accordingly (after accounting for any EC that IMPLAN already takes out if the 9-state region's net incommuting rate is positive). Here is a forum discussion that migth be helpful: http://implan.com/v4/index.php?option=com_kunena&func=view&catid=84&id=10532&Itemid=35#10534
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    John Wynne
    Thank you for the link it is helpful. One more point of clarification. If all the labor pool is captured by my total region of study, i.e. the nine states, then the multiregional impacts are captured within the model. Stated differently, the model has the ability based on SAMs to discern where certain labor pools will be drawn from? My only concern is that we are dealing specifically with pipeline labor and not the general category of Sector 36. So what if for example, I assume that 25% of the labor will come from region A, 25% from B and 50% from C. Am I better off adjusting the EC or can I adjust the LPP such that all the LPP percentages add up to 100% for the entire region?
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    Jenny Thorvaldson
    Changing the LPP to 0.25 affects the entire event - not just the employment. So basically, you would be saying that 25% of the installation occurs in region A, 25% in region B, and 50% in region C. You can see this by clicking the Preview button in the Setup Activities screen after creating the Event and editing its LPP.
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    John Wynne
    If it will cost $1 million to install a pipeline in Region A and 25% of the labor and construction equipment, which I am assigning to sector 36, comes from region A, 25% from B, and 50% from C and no labor comes from outside the region ABC. What is the best way to model this? Since I am running three separate multi-regional models is it best to breakdown the costs initially. That is, if I have three installations one in A, one in B and one in C each for a $1 million and I know the breakdown as stated above is constant, can I apply 50% of the total costs (50% x 3million= $1.5 million) to the Region C model having AB as the multi-regions? And the same for regions A and B, i.e. 25% or $750k is assumed as industry change for each of those regions.
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    Jenny Thorvaldson
    So am I understanding you correctly when I summarize as follows? Region A: 33% of the installation activity and 25% of the labor Region B: 33% of the installation activity and 25% of the labor Region C: 33% of the installation activity and 50% of the labor If this is the case, then if you simply run 25% of the $3 million of installation activity in A, 25% in B, and 50% in C, then you would be specifying that $0.75 million of installation activity occurs in A, $0.75 million in B, and $1.5 million in C. This conflicts with your previous statement that $1 million worth of installation activity occurs in each region. If the distribution of the installation activity differs from the distribution of the labor, how I would probably approach this would be to run a separate Industry Spending Pattern and Labor Income Change activity in each region – that way, you can separate the installation activity from where the labor income will be spent (i.e., where the work will be done from where the employees live and spend). If you do end up using this approach, may I make one additional suggestion: because sector 36 includes a wide variety of other activities, including airport runways and power plants, we often recommend using the "Water, sewer, and pipeline construction" spending pattern from IMPLAN's old 509 sectoring scheme. Follow this link for instructions: http://implan.com/V4/index.php?option=com_kunena&func=view&catid=84&id=10959&Itemid=35#10961
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