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    IMPLAN Support
    Hi Jeff. Payroll does show up in the IMPLAN results. If you remember and you can see this from the “Model Overview” screen in your model, Total Output (TO) equals Total Value Added (VA). Value added is the sum product of employee compensation, proprietor income, other property type income, and taxes on production and imports (TOPI). If you want to see payroll in your model, you can navigate to Scenario Results>Detail Results>View by>Value Added>Employee compensation. So, payroll is included in IMPLAN’s output results. Having said that, we would tend to agree with your colleagues that the direct payroll should be added back into your analysis. An alternative to your approach of using payroll to do a contribution analysis, would be to use the industry’s total output. The output approach for a single industry is fairly easy to do and does not require as many steps in deriving the results, has less uncertainty about what to include or how to interpret the results. Below we have included a link to a paper that describes this approach. https://implan.com/v4/index.php?option=com_multicategories&view=article&id=660:660&Itemid=14 Please let us know if you have any additional questions, and we hope this helps.
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    Jeff Peterson
    So... I pay my employees $100 (labor income). IMPLAN tells me that the Induced Output is $110. Can I say that my payroll equals $210 in contribution within the economy - $100 earned by my employees plus the $110 induced by their income? I'd run it by industry but this is a very large manufacturing firm (for us, anyway) that buys very little locally, other than labor. And they won't give us their super secret sales figures. Thanks for the help.
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    IMPLAN Support
    Hello Jeff. If what you are wanting to do is to show or demonstrate the importance of this industry to the region’s economy, then we believe that a contribution analysis would be the best approach for your project. The difference between economic impact analysis and contribution analysis is as follows. Impact Analysis measures the change in an economy (county, state, or U.S). For example, you might want to the measure the impact of $100 in employee compensation (or loss of $100 in employee compensation) on the target industry in your study region. Whereas, a Contribution Analysis would show the value of the firm paying $100 in employee compensation to local workers on the study region economy. This type of analysis removes the backward linkages from the model to show the industry or firm’s importance to the overall regional economy. We have included a link below to an article describing how to perform a contribution analysis for your use. https://implan.com/v4/index.php?option=com_multicategories&view=article&id=660:660&Itemid=14 With that said, we would tend to agree with you not to run this as an industry change since the XYZ manufacturing firm you are studying buys very little locally, other than labor. Labor Income Change Activity seems to be the best approach as it will distribute the loss of income proportionately across all household income groups in your study region. With a Labor Income Change, the income value you will enter into the model will need to be loaded payroll (i.e., wages and salary plus payroll taxes plus benefits). The IMPLAN model will take out payroll taxes, benefits, personal income taxes, and savings before applying the rest. The contribution method will restrict the labor income value based on the adjusted value of the Detailed Type SAM Multiplier for your industry, so that the total effects of the analysis will be equal to your total starting amount of employee compensation. The adjusted multiplier is obtained by taking the inverse of the Detailed Type SAM Multiplier for your industry and multiplying the product times your initial amount of employee compensation. You can get this multiplier by navigating to Explore>Multipliers>Detail Multipliers>View By >Value Added>Employee Compensation>Choose the IMPLAN Industry. In terms of interpreting your results, here are a few ideas about how you might want to communicate your results. The XYZ manufacturing firm contributes significantly to the study region’s economy in 2014. During this period, the firm paid $X to local employees, which ultimately resulted in household income for these workers and their families. This household spending contributed (via direct expenditures and related ripple effects), $X in output, X jobs, and $X in proprietor income to the regional economy. Table XX shows the top ten local industries (based on employment), which experienced the largest effects resulting the operations of XYZ manufacturing firm in the region. As employees of XYZ Manufacturing firm spend their earnings, this contributes $X in tax revenues for local, state, and federal governments in 2014. Of this, $X are state and local governments taxes and $X are federal taxes. Please let us know if we can be of further a
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    Jeff Peterson
    Thanks!

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