This exercise demonstrates methods of evaluating both the local impacts of an Industry's Final Demand and how the impacts ripple out into other regions. One of the great features of Multi-Regional studies is that effects from each study area region are tracked separately in the impact reports. Not only does MRIO make it easier for an analyst to break out the effects, but it also avoids errors from summing multipliers that occur when study area regions are combined.
CS-13a. Impacts of increased dairy sales in Washington County and its effects on Ramsey County, MN.
Objective
To re-examine the impact of 10,000 Lakes Dairy Farm to see how the effects of this impact ripple into Ramsey County, MN.
Framing the Problem
10,000 Lakes Dairy Farm has received an order for $25,000,000. We want to use MRIO to determine how this affects not only Washington County, but also its neighboring county Ramsey. To do this, we will learn to use the MRIO function and to see how impacts for MRIO studies are reported.
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Table 13a-1: Problem Frame for MRIO Impacts |
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Case Study Problem |
Impacts of 10,000 Lakes Dairy Farm purchase on the economies of both Washington County, MN and Ramsey County, MN |
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Sector |
Industry 12, Dairy cattle and milk production |
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Total Operating Budget |
$25,000,000 in 2017 |
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Analysis Protocol |
Create an Activity (Industry Change activity type) with a single Event for Industry 12 with Industry Sales of $25,000,000. Create a Scenario consisting of this single Activity and add the Ramsey County Region to the Scenario. Analyze using multi-region model. |
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Resources Used |
Washington County, MN model built using 2014 data using the default Trade Flow estimation method; Ramsey County, MN model built using 2014 data using the default Trade Flow estimation method |
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Desired Outcome |
To summarize the impacts of increased dairy sales in Washington County on Washington and Ramsey Counties in terms of total Direct, Indirect, and Induced effects on Output, Gross Regional Product, Employment, and Labor Income. |
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Table 13a-2: User Preferences Settings |
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Default Event Year: 2017 |
User Preferences, Analysis tab |
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Advanced Analysis- MRIO Selected |
User Preferences, Analysis tab |
Tasks for CS-13a
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Tasks |
Hints & Comments |
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1. |
Build a new Ramsey County model. |
Select the Ramsey County file from the MN state folder. Build a model with the Trade Flow Method default. Name the model Ram MRIO. |
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2. |
Close the Ramsey County model. |
We will use this model later. |
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3. |
Create a new Washington County model. |
Since Washington County is the location where the actual industry change takes place, the remaining work will occur in this model. |
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4. |
Set User Preferences to display the MRIO functionality. |
Go to File>User Preferences. Select the Analysis tab and then Advanced Modeling. This will activate a sub-menu. Click on Enable Multi-Regional Analysis. Apply the change and close the window. |
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5. |
Create a New Activity CS13 Increased Dairy Sales and create a corresponding Event. |
Select Setup Activities from the Tasks bar. Create a new Activity and name it CS13 Increased Dairy Sales. Create a new event with a value of $25,000,000 for Sector 12. |
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6. |
Create a New Scenario for running Multi-Regional Analysis. |
Click the Next button to move to the Analyze Scenarios screen. Name the new Scenario CS13 25MM Dairy and leave the level at 1.00. |
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7. |
Add Activity CS13 Increased Dairy Sales to Scenario CS13 25MM Dairy. |
Double click on the CS13 Incresed Dairy Sales Activity, or highlight it and click Select, to move the Activity to the Selected Activities screen. |
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8. |
Turn on MRIO functions. |
In the lower portion of the window, click in the box to the left of Multi-Regional Analysis?. This activates the MRIO screen. |
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9. |
Add model(s) to our Multi-Regional Analysis. |
Click the Add/Remove Models button. This opens the Select Regions screen. You will see that the Washington County model is already listed here. We want to add Ramsey County. Click on the Add Region button. This opens the model folder. Select Ram MRIO and click OK. Both counties are now displayed in the model screen. Click Done. |
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10. |
Select a model to incorporate in the Scenario's Multiregional Analysis. |
Ram MRIO is now in the Available Models. Double click to select, or highlight and click Select, to move the model into the Selected Models screen. |
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11. |
Analyze for the Multi-regional Analysis. |
Click the Analyze Multi-Region button. |
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12. |
View results. |
Click Yes when asked if you want to view results. The results displaying are just for Washington County. To view the effects of Ramsey county, go down to the Models Included and click on Ram MRIO. What effects does a window order in Washington County have on Ramsey County? Solutions below. |
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13. |
1. Why are there only indirect and induced effects for Ramsey County? 2. Why are Washington County effects larger than they were for the single region model? |
1. No direct effect is occurring in Ramsey County because our final demand is occurring at 10,000 Lakes Dairy Farm which only exists in Washington county. 2. Purchases made by Washington County in Ramsey County may occur in industries and be distributed to households that will make purchases from Washington County to meet their demand. This will add a small amount of increase to the indirect and induced effect in Washington County. |
Solutions
- Task 5. Activities for Scenario CS13 25MM Dairy.
- Tasks 7-10. Scenario setup for CS13 25MM Dairy.
- Task 12. Total Impacts of Scenario CS13 25MM Dairy.
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