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ECONOMIC IMPACT & INCENTIVE ANALYSIS | Overview | Introduction | Analysis | Multipliers

IMPACT ANALYSIS

An impact analysis involves specifying a series of expenditures and applying them to the region's multipliers. The trick is to identify the expenditures in terms of the sectoring scheme for the model; in producer prices; in historical dollars based on the year of the model; and only apply those dollars spent within the region. Each database has information for these components for all 508 industrial sectors in the IMPLAN model.

Employment is total wage and salary and self employed jobs in a region. Employment in the 1990 and subsequent databases are measured in total jobs.

There are four sub-components for Value Added. These are:

1. Employee Compensation;

2. Proprietary Income;

3. Other Property Type Income;

4. Indirect Business Taxes

Employee compensation is wage and salary payments as well as benefits including health and life insurance, retirement payments, and any other non-cash compensation. This provides a measure of income to workers who are paid by employers.

Proprietary income consists of payments received by self-employed individuals as income. This would be recorded on Federal Tax Form 1040C. This includes income received by private business owners, doctors, lawyers, and so forth. Any income a person receives for payment of self-employed work is counted here.

Other property type income consists of payments from rents royalties and dividends. This includes payments to individuals in the form of rents received on property, royalties from contracts, and dividends paid by corporations. This also includes corporate profits earned by corporations.

Indirect business taxes consist primarily of excise and sales taxes paid by individuals to businesses. These taxes are collected during the normal operation of these businesses but do not include taxes on profit or income.

Goods and services purchased for their ultimate use by an end user are called final demands. For a region this would include exports as that is a final use for that product. In an input-output framework, final demands are allocated to producing industries with margins allocated to the service sectors (transportation, wholesale and retail trade, insurance) associated with providing that good to the final user. Thus final demands are in producer prices.