Modeling question

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    IMPLAN Support
    Hello Ramon, Thanks for your questions. We apologize for the delayed response. 1. As regards dividend payments, we typically don't recommend modeling these unless you know exactly where they are going and what they are being spent on. Since IMPLAN is a production Model if the dividends recipients save their money or reinvest it there is little to no impact. Likewise, typically even when spent these types of funds are rarely spent in a typical Household spending pattern (people don't typically spend their dividend income on the more common household purchases such as healthcare, mortgages, utilities, car parts etc). So unless you know that the funds are spent, where they are spent and what is purchased, it is probably best not to look at dividend income in the IMPLAN Model. 1.A. You are correct that OPI is where they are tracked in the Model. However, just as indicated above, OPI is not applied to the Multiplier Model to generate additional impacts because of these caveats. 2. What are you trying to do by modifying Household Income? There is no direct way to do this within the data, but there are ways to model Household Income Changes. If you could provide us with a little more information as regards what you are trying to do, we would glad to provide you more precise directions. 3. If the Industry does actually create its production in the US, which we presume is where you have data, then there is no quick way to do this. However, it sounds like you have data on the types of Industries that they purchase from that are within the U.S., so you can create a New Activity as an Industry Change type (unless you feel that they would make purchases not just from Industry production but also from Institutional production). You can then create a series of "New Event"s, and you will want to find the Sector for each local purchase (the purchases should be a value spent in each state Model if that is your chosen geography). You can find Sectors from your NAICS codes using the Help>Sector Search function in the software. The Industry Sales should be the total value, the purchases for that region. IMPLAN can estimate the Jobs and Labor Income associated to this value of sales for that area. 4. Yes, You can do it 3 ways. a. Since Models automatically save and changes you enter, you can import them into other models. In the Setup Activities, select Activity Options>Import>From Another Model>Find your model and select it, then grab your Activity(s) b. Once you have finished your Activity, click Activity Options>Export>To Activity Library. Then once you are in a different model and want to use that activity, click Activity Options>Import>From Activity Library>Find your Activity and click Import. c. Export the Activity to Excel or create it in the Activity template found in Documents>MIG>IMPLAN>Templates The one caution on moving Activities is likely you don't have the same exact expenditure amounts in every region. The advantage to the Excel template is that it is easier to change the sales in Excel. However, if you start from an export, please ensure that you clear all the Employment, Employment Compensation and Proprietor Income cells before importing into the new Model or you will overwrite the local relationships on import. Please let us know if this addresses your concern or if you have any additional questions.
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    RBravo
    Hello, This is very useful. Thank you very much for the help. I wanted to follow-up on two of my questions: 1. Is there a way I can enter those dividend payments, in order to know the effect they have on the economy? If so, where/how can I do that? Your response makes a lot of sense. However, if we assume that I am able to work out the proportion of dividend payments that are spent (i.e. an actual dollar amount) and how these are spent (e.g. healthcare, utilities, etc.); how can I model this in IMPLAN? 2. Q: Where in IMPLAN can I modify household income? A: There is no direct way to do this within the data, but there are ways to model Household Income Changes. If you could provide us with a little more information as regards what you are trying to do, we would glad to provide you more precise directions. This was a potential way to model the impact of dividends. For example, assume that I was able to determine that household income went up from $1000 to $1050 (I am making these numbers up). How can I model this change in income? This is a potential alternative to the scenario from question 1. Thank you very much!
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    IMPLAN Support
    If you can locate where the payments are spent, you have a couple of options. You probably won't be able to determine exactly what the dividend payments are spent on. 1. After removing the appropriate income tax and savings values from your dividend payment value, you could import a Household Spending Pattern for the income group(s) receiving those dividends through Activity Options>Import> Institutional Spending Pattern on the setup Activities page. You would then want to delete Events that you know this money would not be spent on. For example, this increase in income is unlikely to be spent on Utilities (Sectors 3029-3031 - in the 2007-2012 data sets) or mortgage or rent payments, etc. There are some cautions to what you want to remove though. These Household Spending Patterns are Margined. So they look through the Value Chain of retail sales. Thus if you don't think any grocery sales would be purchased with dividend funds, you could remove purchases from agricultural Sectors but if you are not sure, then we would recommend leaving those in. It is appropriate to leave the Local Purchase Percentage setting to SAM Model Value which will be how the spending pattern imports. You will also want to ensure that your Event Year matches the value of you dividend dollars. To change this, if needed, you would want to use the Event Options> Change All> Event Year and select the year that represents the dollar value of the dividend payment. Finally you would enter your dividend value (again less income tax and savings) into the Activity Level, by selecting the Edit button in the Activity screen. If, however, you are able to determine exactly what is purchased by dividend payments, you can make your own specialty spending pattern from a series of Industry Change Events. 2. In this Activity Type you can create and Event for each purchase, select the Sector that represent the various known purchases (Help>Sector Search can assist you in selecting Sectors by description). For these Events you will want to set the LPP to SAM Model Value ( Event Options> Edit Event Properties>Set Local Purchase Percentage> SAM Model Value; Edit Event Properties>Margins> Yes;
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    RBravo
    Hi again, Thanks for all the information you previously provided. I have a new follow-up question on this: Where in IMPLAN can I find pension plan payments and mutual fund distributions (e.g. in household income)? In other words, if I know how much money from company x is paid as pension plan payments and mutual fund distributions, where do I enter this information in Implan? Thank you!
  • Avatar
    IMPLAN Support
    Thanks for your question Ramon, There are no data in IMPLAN to identify gross payments by private pensions to households. IMPLAN captures net interest payments to households, as well as net savings by households. If the question is simply where to find interest and dividend payments from pension plans, it is captured in OPI payments of net interest to households, but that is a net measure, and encompasses much more than just pension payments. If the payout also entails drawing down assets in pension plans, that would be captured as part of net household savings. Again, this is a net figure (gross saving minus borrowing) and one would not be able to identify gross drawing down of pension payments (it would be net of contributions), and would reflect savings and dissaving of other forms, e.g. buying and selling assets of other types. It might be helpful to consult the Bureau of Economic Analysis table CA-35, which shows county level personal transfer payments from retirement programs, and table CA04, which shows personal interest and dividend income (which includes interest and dividend income from private pensions). See here: http://bea.gov/itable/ From an analysis standpoint, it seems you could be trying to view examine two potentially different aspects of these payments. Option 1. If you are looking to show spending of these payments by recipient Households, you would need to determine how they spend these funds. In many cases it might be much like standard Household spending. If you believe this to be the case you can choose an appropriate Household Income Category in the Household Income Change Activity Type and model your payments to Households there. A couple of additional things to keep in mind here are: However, depending on the income group receiving, some of the funds might be reinvested elsewhere, a good chunk may be spent on travel, etc. (which becomes sales to other locations), or it might not follow a pattern of sales identical to normal Households (for example pension payments to an income group that likely owns their homes and will use it on non-essential disposable income). It is important to note that the IMPLAN Household Spending Patterns include payments to utilities, mortgages, etc. Also, will the retirees move somewhere else at this point? If they do, their money travels with them. Option 2. Looking at payments made by businesses to these plans. Payments to pension and mutual funds are basically savings, so the only thing to do if you wanted to model something like this is would be to figure the proportion of the payment that went to fees for the pension and fund handlers and run these payments through the appropriate financial Sector.

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