Contribution analysis

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    IMPLAN Forum
    Good Morning Shameem! Thank you for your post. [u]Impact Analysis[/u] This type of study examines the economic impacts of an event or change to the economy (e.g., the opening of a new business). These studies address the general question: What are the marginal impacts of the project? This is the more common of the two. [u]Contribution Analysis[/u] This type of analysis is becoming increasingly more common and concerns the role, importance, or contribution of an existing business, project, or industry. These studies address the general question: What is the contribution of the project to the overall economy of the area? Click here for instructions on how to conduct a contribution analysis in IMPLAN. [url=http://www.implan.com/index.php?option=com_content&view=category&id=148]Single Industry Contribution Analysis[/url] [url=http://www.implan.com/index.php?option=com_content&view=article&id=366]Multi-Industry Contribution Analysis[/url] Please let us know if you have any additional questions. Thanks!
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    Torrey Byles
    I appreciate your answer this question about the difference between contribution and impact. I too am engaged in an analysis that involves both kinds of named components. Can you say a little more about the mathematical properties of each one? I remember one of the IMPLAN trainers talking about how contribution is "backward looking" and impacts are "forward looking." Thus a contribution is actually less than an impact even for the same level of spending. In other words, are not the two kinds of stimulation -- contribution and impact -- modelled differently. And can you add the two together? For example, I am doing analysis by parts for a university. I am saying that the payroll and the recurrent operational spending lead to CONTRIBUTIONS. And the spending by non-resident students (who moved to the region in order to attend the university) and visitors to university events (such as athletic events) are considered IMPACTS. I do an analysis by each part, then add them together for the total impact. The total impact is the sum of contribution and impact. Is this correct?
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    IMPLAN Forum
    analysis the resulting Sector Total Output value reported in the Detail Results must not exceed the Study Area Total Industry Output value because the Study Area Total Industry Output represents every dollar of local production. When you use the Analysis By Parts method, we are typically thinking about modeling a change in your economy. That change is technically contributing to the economy, however this is not how we use the word contribution in IMPLAN. But Analysis-by-Parts can also be constrained for a Contribution Analysis, or can be used in the same manner as an impact analysis to reflect the contribution of a firm in the region, rather than the Contribution of the Sector to the region. Unless your Hi Torrey, Thank you for your post! Sometimes the usage of IMPLAN terms is not always a direct translation to how we would use the word outside of IMPLAN. This is where a lot of confusion can enter in and create problems. Contribution, when speaking of Contribution analysis in IMPLAN, is a good example. In IMPLAN, we use Contribution analysis to mean the contribution of an EXISTING industry on the region. Thus this methodology constrains the Total Industry Output of an entire Sector to it's value in the Study Area Data. The resulting results of this style of analysis, do require a change in methodology, and yield an impact, when done correctly, on the local economy of what the entire value of the Sector contributes to the economy. If this type of university is the only university in the Study Area the modeling technique is typically recommended to be the same as that used for an economic impact analysis. If your situation involves a university impact that is not using an Institution Spending Pattern, (because Institution Spending Patterns are not included in Study Area final demand they never need to constrained by the IMPLAN definition of Contribution Analysis) and your university is the only one reporting in that Sector or a majority of the reported Sectors, Total Industry Output, please let us know and we can provide you some additional information about how you might want to handle this unique analysis situation. Are you modeling the additional spending by visitors and non-residents? If so you can add these values to your university operational impacts but it is important to remember that the additional spending of students is only really a new impact if you are adding new students to the region, if your overall student body is relatively static over time their impact is also more of a contributing nature to the economy, and even though the individuals may be new to the area, the demand they are requiring is in effect turned over year to year. You are also correct that you can add the contribution of your university to the value of your student body expenditures without any issues.
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