Industry sales less than direct impact: Why?



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    I want to add that I can envision this situation as multi-industry impact analysis. Please see snapshot of sum of event values and direct output results as an attachment.
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    IMPLAN Support
    Hi Omkar! Thank you for your forum post and for the screenshots. This was very helpful in determining why the Direct Output was less than your Sum of Event Values. It looks as if one of your Events is the Wholesale Sector and that particular Sector functions the same as the Retail Sectors in that this is a Margined Sector. I presume that you selected Gross Retail Sales after entering your input value. Since selecting Gross Retail Sales will reduce the value that gets applied to the Multipliers you will never have a match of the Direct Output to the Sum of Event Values. The reduced value is correct since it is unknown what is being purchased at the Wholesaler, the Software is removing the Margin that would go to the Producer, Transporter and Retailer of that product. Thus, leaving a lowered value because all we know is that something was purchased from the Wholesaler. Are all of the Sectors that you have in your Activity related to Crop Farming? Or are you looking at several different types of Activities? Have you considered Net impact analysis is important. Typically farmers have crop insurance and/or are subsidized in their crop production, so that is something that should be considered here, the difference between crop value loss and actual loss. Crops also are unique it that depending on where in the cycle the loss occurs, much if not all of the Intermediate Expenditures may already be invested and thus a typical negative Industry Change analysis isn't really representative, because the supply chain expenditures may already have occurred prior to the loss. These in affect then become sunk costs to the farmer and the real loss is only in income to Employee Compensation workers on the farm (assuming they can't harvest) and to the farmer (net his insurance payout or subsidization as noted above.) Thanks!

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