Household Spending

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8 comments

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    IMPLAN Support
    Hi Archie, It sounds like you've gone through and removed savings and taxes from the money households will receive as a result of the policy change and now that you have a value of disposable income you are trying to determine how to apply that value the Household Spending Pattern. If that is not correct, please let us know. Please also note that the Household Spending Pattern includes some items not typically thought of as part of disposable income such as utilities, house payments, etc. If you have determined calculations for removing these values as well, you will just want to be sure that you also remove them from the spending pattern. Please let us know which version of IMPLAN you are running if you have additional questions. Best regards, IMPLAN Group Staff
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    flanders
    Thanks for responding. I did not state my misunderstanding clearly. From the beginning, I have calculated a reduction in available household income for all spending and saving purposes (take home income-net income on a pay stub). Activities: I create a new activity type as "Household Income Change". Events: I create a new event in Sector 10005, "Households 35-50k". I enter the dollar amount from my calculation as Household Income Change. Scenario Results: All are induced. Maybe I did it correctly, and this is the result I want. Please interpret the result from this application.
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    IMPLAN Support
    Hi Archie, A HH Income Change does not remove any payroll taxes from your Event Value so you would want to use the "take home pay" value. The HH Income Change does, however, remove personal taxes and savings, so you will not want to make any adjustments for that. Please see these forum posts for more information about the 3 ways HH Income can be modeled in IMPLAN: http://implan.com/index.php?option=com_kunena&view=topic&catid=83&id=12965&Itemid=1840#12967 and http://implan.com/index.php?option=com_kunena&view=topic&catid=80&id=12960&Itemid=1840#12961. By definition, any impacts that stem from HH spending are induced impacts. There will be no indirect impacts unless an industry is directly impacted (i.e., if there is lost production). If the lost income is not associated with a job (i.e., it is non-labor income), the direct impacts will simply be the lost HH Income. However, if this lost income was coming from a job (as opposed to a SS check or some other form of non-labor income), we would recommend using a Labor Income Change with the fully-loaded (i.e., unadjusted) payroll figure. In this case, the direct impact includes the lost EC (loaded payroll) plus the lost payroll taxes associated with that lost EC. To calculate those direct taxes, we recommend running the EC value in an Industry Change Activity in sector 517, then take just the DIRECT tax impacts from that scenario and include those with your direct EC value as your direct effect. The total impacts are then the sum of the direct and induced impacts. Thanks!
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    flanders
    Thanks for the good response. That answers my question. I will review the references for additional information.
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    flanders
    After reviewing the IMPLAN State/Local Tax Impact Report, please clarify the definition of the personal taxes that IMPLAN removes from HH Income. In my state, personal taxes are only for personal property such as boats and other personal property items. Is there a way I can see the percentages that IMPLAN deducts from HH Income for 1) personal taxes and 2) savings? That would help me to determine the proper IMPLAN application.
  • Avatar
    IMPLAN Support
    Hello, The personal taxes removed are all personal taxes, including personal income tax, personal property tax (which includes things like boats), motor vehicle licenses, fishing & hunting taxes, and fines & fees paid to government. You can see how much this is by looking at the IxC Social Accounting Matrix (Explore>Social Accounts>IxC Social Accounting Matrix). The SAM shows payments from columns and receipts in rows. Click View By: Detail SAM to expand the row receipts to show transfer types; these transfer types correspond with types of taxes in the tax impact report. If you look at any of the household columns, you will see household payments to the “Commodity Total” row, which represents household purchases of locally-produced commodities, household transfers to other households (mostly interest payments), household payments to federal government (personal taxes), household payments to state/local government (personal taxes), household payments to capital (savings), and payments to trade (purchases from outside of the study area). You can sum any of these payments as a share of the column total to see the percentage applied or removed in a HH income change event. Note that property taxes on residences are in sector 441, owner-occupied dwellings, which is to say they’re not included in household tax payments. Please let us know if you have additional questions. IMPLAN Group Staff
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    flanders
    Are there case study examples posted involving a change in available income for spending? I should review other applications for more background information. Maybe I should use the IMPLAN spending pattern feature for each HH Income group.

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