Industry Spending Pattern - industries w/o profit

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    Frances
    Hi Thomas, 1. Whether or not you normalize the spending pattern or not depends on what value you are entered for Activity Level. If your value is the value of the goods and services budget and does not include any other values the you are correct in normalizing your spending pattern. Output = Intermediate Expenditures + Value Added where Value Added = Employment Compensation + Proprietor Income + Other Property Type Income + Taxes on Production. So if your starting value is Output and you have no profits, then the other value you will want to reduce your total by is the tax value. Once you have removed the taxes paid as well as the compensation values, the remaining value is the Intermediate Expenditures value appropriate for a normalized budget. 2. Those are part of your Direct Value Added. They are not analyzed in the Model but included in the total Value Added and Output in the results. The software will calculate the taxes associated to the Indirect and Induced expenditures. So you would just sum Direct tax values with neutral or negative profits and your income to determine your Direct Value Added field. We don't typically recommend analyzing taxes because taxes collected at a specific location aren't necessarily spent in that location nor do we know how they are spent. Taxes going into an education program will yield a very different impact then taxes spent on fire services or taxes spent on police services, so without knowing how they are spent, we can't really estimate their impacts. 3.Proprietor Income is income earned by sole proprietorships or partnerships. If none of the institutions in your group are classified in one of these two categories, then you should only use the Employment Compensation Event. If you do have institutions classified in these categories then you would want to show their specific income in 6001. The correct value of total Direct Labor Income is the total value of your income change. This is also displayed as the Direct Factor Change in the results screen. 4.The assumption of LPP = 100% for a spending pattern is highly improbable and unless you are certain that the purchases made are from local production, we would recommend setting the spending pattern to SAM Model Value ( [url=https://implan.com/v4/index.php?option=com_multicategories&view=article&id=567:567&Itemid=71#lpp)]Event Options> Edit Event Properties>Set Local Purchase Percentage> SAM Model Value.[/url]). Setting the LPP to 100% across the spending pattern will likely yield greatly overstated results. 5. You are correct those should be run in a separate Industry Change Activity Type. We typically also recommend running Capital Expenditures and construction in separate Scenarios, as these are typically not annually reoccurring expenditures. If these are contracted, it may also be worth checking to see if the contractor is local, because if not that typically means additional leakage of these effects as well (one way to try to capture this is to also set these Events to SAM Model Value; however, construction typically has a high SAM Model Value so it may not accurately reflect the % local if the contractor is from outside your Study Area Region. Hopefully this helps. Please let us know if you have any additional questions. IMPLAN Support Team
  • Avatar
    IMPLAN Support
    Hi Thomas, 1. Whether or not you normalize the spending pattern or not depends on what value you are entered for Activity Level. If your value is the value of the goods and services budget and does not include any other values the you are correct in normalizing your spending pattern. Output = Intermediate Expenditures + Value Added where Value Added = Employment Compensation + Proprietor Income + Other Property Type Income + Taxes on Production. So if your starting value is Output and you have no profits, then the other value you will want to reduce your total by is the tax value. Once you have removed the taxes paid as well as the compensation values, the remaining value is the Intermediate Expenditures value appropriate for a normalized budget. 2. Those are part of your Direct Value Added. They are not analyzed in the Model but included in the total Value Added and Output in the results. The software will calculate the taxes associated to the Indirect and Induced expenditures. So you would just sum Direct tax values with neutral or negative profits and your income to determine your Direct Value Added field. We don't typically recommend analyzing taxes because taxes collected at a specific location aren't necessarily spent in that location nor do we know how they are spent. Taxes going into an education program will yield a very different impact then taxes spent on fire services or taxes spent on police services, so without knowing how they are spent, we can't really estimate their impacts. 3.Proprietor Income is income earned by sole proprietorships or partnerships. If none of the institutions in your group are classified in one of these two categories, then you should only use the Employment Compensation Event. If you do have institutions classified in these categories then you would want to show their specific income in 6001. The correct value of total Direct Labor Income is the total value of your income change. This is also displayed as the Direct Factor Change in the results screen. 4.The assumption of LPP = 100% for a spending pattern is highly improbable and unless you are certain that the purchases made are from local production, we would recommend setting the spending pattern to SAM Model Value ( Event Options> Edit Event Properties>Set Local Purchase Percentage> SAM Model Value.). Setting the LPP to 100% across the spending pattern will likely yield greatly overstated results. 5. You are correct those should be run in a separate Industry Change Activity Type. We typically also recommend running Capital Expenditures and construction in separate Scenarios, as these are typically not annually reoccurring expenditures. If these are contracted, it may also be worth checking to see if the contractor is local, because if not that typically means additional leakage of these effects as well (one way to try to capture this is to also set these Events to SAM Model Value; however, construction typically has a high SAM Model Value so it may not accurately reflect the % local if the contractor is from outside your Study Area Region. Hopefully this helps. Please let us know if you have any additional questions. IMPLAN Support Team

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