Public University Impact

Comments

5 comments

  • Avatar
    IMPLAN Support
    Hi Travis, Thank you for your post! 1. The spending pattern data already includes payroll, and would sum to 1. You should leave it this way unless you have your own estimate of the ratio of payroll/total spending that differs from what the model assumes. If you have your own estimate of the amount of payroll, remove payroll from the spending pattern, then normalize, and use the value of your non-payroll spending as the Activity Level. 2. That depends on whether you have your own payroll estimate or only a total spending estimate. See the discussion in #1. If you have your own estimate of payroll, you should use the difference of total spending minus payroll, remove payroll from the spending pattern, and normalize. If you don’t have your own estimate of payroll, use the total amount and not the difference, you will not need to normalize. 3. You will need that amount to be a fully-loaded payroll, which includes benefits. If you don’t know the fully-loaded payroll amount (equivalent to Employee Compensation in IMPLAN), but know the wage & salary compensation, you can estimate Employee Compensation by using ratios provided in the 536 FTE & Employment Compensation Conversion Table here:http://implan.com/index.php?view=list&slug=536&option=com_docman&Itemid=1764. You can use an industry event for the government payroll sector. Also, be sure to enter that value into the Employee Compensation field and not the Industry Sales field, else you won’t get your entire EC amount since this sector includes CCA (i.e., Industry Sales = CCA + EC). An alternative to using this sector is simply running a Labor Income Change Activity (same results). If you need to know the direct tax impacts from labor activity, though, consider doing an industry event in sector 517, again using the EC field and using only induced and direct effect results. 4. See 5 & 6. IMPLAN direct impacts are final demand impacts. In an Analysis-By-Parts (ABP) using an Industry (as opposed to an Institution as in your current case), an Industry Spending Pattern is, by definition, not final demand spending, so you have $0 final demand direct impact. You would need to add the total value of what you typed into the event (assuming the same event and results years) to estimate the equivalent to the direct impact if you were doing an industry event. Direct effect, by definition, for an industry, is the amount of initial final demand spending on something that occurs in an area. It’s a little different with Institution Spending Patterns. All institution spending, less imports and institutional production, is considered final demand spending, so that value goes into direct effects. IMPLAN puts in the total local spending, i.e. your event value * LPP, less institutional production of commodities, as the direct effect. The value not included in direct effects is included in LPP Imports and Direct Institution Change cells on the left side of the results screen. So you don’t need to add anything back if you are simply telling the story along the lines of “My school’s budget is $XX and this has $YY impact on the local community”. However, if you intend to report direct, indirect, and induced, and you want your direct to equal your entire budget, you’ll need to add back in those LPP Imports and Direct Institution Change values. a. When you do a labor income event, IMPLAN reports results that are only the results of the spending of that Labor Income, which is by definition an induced effect. It doesn’t report back the initial value of that labor income as a direct effect. So, you need to add it in manually if you want to report the initial payroll value. IMPLAN will include it in the Direct Factor Change cell on the left side of the results screen. I apologize for the length of this response. Please let us know if you have any additional questions!
  • Avatar
    eisen178
    Thanks for the reply. I do have some follow up also. My end goal with these questions is to accurately report the combined impacts of the university's budget. So please correct me if I'm wrong but I am taking what you replied to mean that I should not be adding the Direct and Indirect effects from the institutional spending pattern to get the "actual" indirect effects to fill in the 0's from the payroll activity? That everything from each row of both activities is in the correct place and amount and to get the final total I should just add them together exactly as they appear? I'm confused if this is the case because there are jobs appearing in the direct effects of the spending pattern which shouldn't be the case if I removed the payroll sectors from the activity, right? Also then should there really be induced effects if direct employment was not included in the spending pattern portion of the activity or do the induced effects result from the indirect effects? Thanks again, Travis
  • Avatar
    IMPLAN Support
    Hi Travis, How the Direct Effects are handled will depend on how you chose to setup the analysis. Could you tell me if you decided to leave the payroll activity in the Event or separate it? If you did separate, did you run a Labor Income Change or separate payroll Sector. Did you run the payroll impact in the same Scenario as the spending pattern or in a separate Scenario?
  • Avatar
    eisen178
    My setup was to use two different activities and separate scenarios for each. I used the Institution Spending Pattern "State/Local Govt Education" with the payroll sectors removed then normalized with the activity level set to the budgeted expenditures minus the portion for payroll for the first activity and scenario. Next I used the Industry Change "Employment and Payroll of State Govt. Education" (sector 532) for the payroll activity and scenario with employee compensation set to the portion of the budget for payroll, leaving the industry sales to what was automatically populated. So separate activities and separate scenarios.
  • Avatar
    IMPLAN Support
    Hi Travis, Since you split the impact this way, you are correct that you will want to sum the value of the Direct Effects into your Indirect Effects if you want to report the results in the standard table format similar to that of IMPLAN. Because by technical definition the first-round Intermediate Expenditures are Direct Effects for Institutions these are separated out in case you need to describe the impact of the University's "Direct" expenditures on the region separate from the remaining stem to business to business effects. Your Direct Effect then is derived from your knowledge of the Direct and the reported results of payroll Sector analysis. Note that in the reported results that Value Added = Output but Value Added is somewhat, if only slightly larger than Labor Income. Thus the reported Direct Effects of the payroll Sector provide you the actual Direct Employment, Labor Income and Value Added for your analysis, but you need to add back into your Value Added value, the value you entered for Activity Level in your analysis, since you used a goods and services budget. This will give you the new Direct Output based on Output = Intermediate Expenditures + Value Added. Once you have your actual Direct Effects accounted for you can add the Direct Effects for the Labor Income Change to your table from the spending pattern (where the spending pattern reported Direct Effect and Indirect Effects have already been summed together) and the two Induced Effects. When these three rows are updated you can then solve for your new totals. Hopefully this helps. --Implan Support Staff

Please sign in to leave a comment.