Contribution Analysis - Forest Products Sector

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    IMPLAN Forum
    Hello Monica, The suggestion to use the year of the data set is due to the fact that the majority of analysts use the study area data values for event values when conducting a Multi-Industry Contribution Analysis (Total Industry Output for industry x is used as the Industry Sales value input). As the study area data values are data model year dollars, the Event Year should match the year of the model. If you are bringing your own values to the model, then the Event Year should match the dollar year of your values. You can view your results in your preferred Dollar Year for View by using the dropdown menu in the Results screen.   How the variance in trade flows by scenario impacts your study depends on goal of the study. If your goal is to measure the difference in contribution based solely on changes in production levels, then altering trade flows differently and using a different set of industries by scenario will add an additional unwanted variance. However, if your study incorporates changes to the economy as an additional variance, then the difference in scenarios is appropriate. It is highly important that you list these modification variances in the report. Also note that if you do plan to use different trade flow assumptions for each of your models, you will need a distinct IMPLAN model for each of your models. Trade flow settings are specific to an entire IMPLAN model, as opposed to varying by Scenario. Regards, IMPLAN Staff
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    Monica Haynes
    Thank you for the additional information. I do plan on using IMPLAN data values for event values, at least for my baseline scenario, so it sounds like I should use 2015 as the event year. I began to work my way through the steps in the Multi-Industry Contribution Analysis instructions, but I am running into an error that I hope you can help me with. I have followed the instructions for Steps 1-4, but when I get to Step 6, I find that some (but not all) of my selected industries have sales to institutions other than Domestic Exports and Foreign Exports. Similarly, these same industries have some Intermediate Output reported in the Industry Output/Outlay Summary grid. I have double-checked my work and I can’t seem to find why the error may have occurred. Do you have any suggestion for me? The sectors that have the discrepancy are as follows: 138 Reconstituted wood product manufacturing 139 Wood windows and door manufacturing 144 Prefabricated wood building manufacturing 145 All other miscellaneous wood product manufacturing 149 Paperboard container manufacturing 150 Paper bag and coated and treated paper manufacturing 153 All other converted paper product manufacturing 368 Wood kitchen cabinet and countertop manufacturing 370 Nonupholstered wood household furniture manufacturing 376 Showcase, partition, shelving, and locker manufacturing 411 Truck transportation*** They represent about a third of all industries included in my forest products “sector”.
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    Monica Haynes
    It seems logical that the similarity between all of these industries is that they are all manufacturing. However, two other manufacturing industries included in my sector include: 137 Engineered wood member and truss manufacturing 142 Wood container and pallet manufacturing These two have zeros where they should, according to the instructions in the tutorial. I'm just trying to anticipate some possible explanations for the problem. Thanks again! Monica
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    IMPLAN Forum
    Hello Monica, Here are a few things to check: 1. Step 3: Commodity Production Check that the Primary commodity coefficient is set to 1 for each of your target sectors. Note that the primary commodity is not necessarily the first commodity listed. For example, the first commodity listed for sector 138 is commodity 3134. The Primary commodity is 3138. 2. Order of operations The steps need to be completed as listed for all industries. 1. Adjust all industry commodity production 2. Reconstruct model 3. Adjust all necessary Trade flows 4. Reconstruct model If you adjust Trade Flows and then then modify the commodity production for an industry, the Trade Flows are reset. Let us know if this does not resolve your issue. Regards, IMPLAN Staff
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    Monica Haynes
    Thank you! I started over with a new model and went through the steps again, paying extra attention to the items you mentioned. This time it worked.
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    Monica Haynes
    One more question related to this analysis... For one of the scenarios I would like to introduce a new sector that doesn't currently exist in the region (Sector 165 - Organic Chemical Production). I understand that I have to do analysis by parts. My plan is to import the industry spending pattern for that sector and set the level equal to the dollar amount I want to impact. I also plan to create a labor income activity to represent the employee compensation for that industry. My questions are: 1. How do I determine the ratio for the labor income amount? 2. When I get results for that scenario, I know there will not be any direct effects. How do I determine the correct amount to use for Value Added direct effect? 3. Do I need to make any adjustments to the model or to my process knowing that this is a contribution analysis? Thanks! Monica
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    Monica Haynes
    Hello again, I still haven't received a response on my question from last week. I just wanted to make sure it hadn't gotten overlooked. Thank you! Monica
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    IMPLAN Forum
    Hello Monica, We apologize for the delay in our response, we missed your previous question but thanks for following up with us. 1. To conduct an Analysis-by-parts for a sector that does not exist in your region, you will need to select a proxy region in which the industry exists and the essence of the region is similar to the region/county you are interested in. If you do not have IMPLAN data for a similar region, you can use the U.S. You can go into the proxy region Social accounts > Balance Sheets > View by: Industry and then choose sector 165 and then click the value added tab. Labor income is the sum of employee compensation and proprietor income so you can use the coefficients for these components to determine your labor income ratio. 2. ABP methodology works best when you have the direct effect information with you, though most users do not have all components of the direct effect; in this case, you can use ratios from your proxy region to calculate direct effects, similarly to how you used a ratio from your proxy region to determine direct Labor Income. There are several ways to determine direct tax impacts, though we would recommend using the attached spreadsheet, which can also be used to calculate/confirm your other direct impacts. 3. Analysis by parts does not create the industry in the model – i.e., the industry will still not exist in the study region so it would not be possible to do a traditional contribution analysis on it. But that would be unnecessary and would double-count anyway, since the ABP IS the impact – no other modeling necessary. The best thing about this is that, since the industry still does not exist in the region, there is no chance of any feedback effects (i.e., indirect or induced impacts) on it – so it is already set up as a contribution analysis. However, when running the Industry Spending Pattern for this sector, you’ll need to set RPC = 0% for any of the commodities produced by the other industries you are including in the contribution analysis, unless you have already customized the model to set the RPCs for those commodities to 0 as per the instructions for a multi-industry contribution analysis: http://support.implan.com/index.php?option=com_content&view=article&id=366. Hope this helps and please let us know if you have any other questions. Regards, IMPLAN Staff
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