INTRODUCTION
Users can further customize their analyses by changing the defaults within Spending Patterns. Five Event Types have editable Spending Patterns that provide users the ability to change the Commodities that an Industry or Institution purchases and the Local Purchase Percentage (LPP) for each Commodity. Spending Patterns can be edited from the Dashboard and from the Impacts Screen. Both methods for editing a Spending Pattern require the use of the advanced menu options within IMPLAN to access the Spending Patterns.
SPENDING PATTERNS
Spending Patterns are a list of goods and services, or Commodities, purchased by the Industry or Institution. Spending Patterns can be thought of as the backward linkages or supply chain of an Industry or represents a general spending distribution for measuring broad Institutional activity.
In IMPLAN, changes to the Industry Spending Patterns will cause changes in the Indirect Effects shown on the Results page. Indirect Effects stem from business to business purchases in the supply chain. Therefore, the first round of Indirect Effects are triggered by the Intermediate Inputs specified in the Spending Pattern. For example, to create a piece of clothing, fabric is needed. This means that the fabric is an Intermediate Input of the clothing manufacturer and is a part of the costs associated with creating it.
Institutional Spending Patterns have some key differences from the Industry Spending Patterns. Institutional Spending Patterns, like all Spending Patterns, are made up of a list of Commodities. Because Institutions are Final Demanders, entities that demand goods and services for consumption not as an Intermediate Inputs, each Commodity in the Spending Pattern is treated like a Commodity Output Event and will create a Direct Effect for each producing Industry. Therefore, any changes in the Spending Pattern will cause changes in the Direct, Indirect, and Induced Effects shown on the Results page.
All Spending Patterns will include a list of Commodities purchased, the coefficients which represent the amount spent on each Commodity per dollar of Output or Intermediate Inputs, and the Local Purchase Percentage (LPP) of each Commodity which represent the amount purchased locally. The Output (Institutional Events) or Intermediate Input (Industry Events) value in the Event is then applied to the coefficients of each Commodity in the Spending Pattern.
WHERE TO FIND SPENDING PATTERNS
FROM THE IMPACTS SCREEN
On the Impacts Screen, users can choose one of the five Event Types that allows for editing its Spending Pattern: Industry Impact Analysis (Detailed), Industry Spending Pattern, Institutional Spending Pattern, Custom Spending Pattern, and Industry Impact Analysis (Custom). The latter two Event Types require utilizing a Custom Spending Pattern that was previously built by the user.
After selecting an Event Type, users must select the Specification. For the Industry Impact Analysis (Detailed) and Industry Spending Pattern Event Types, users will select one of the 546 Industries for the Specification. The Specification for the Institutional Spending Pattern Event Type is the type of Institution. For the Custom Spending Pattern and Industry Impact Analysis (Custom) Event Types, the Specification drop-down will only include a list of Custom Spending Patterns already built by a user.
To view the Spending Pattern, click the Advanced Fields icon or Spending Pattern within the Event.
Users will be able to make edits within the Spending Pattern modal.
FROM THE DASHBOARD
Users can also edit Spending Patterns from the Dashboard, by selecting the Spending Patterns tile under Advanced Tools. This advanced tool allows users to edit IMPLAN’s default Spending Patterns and any Custom Spending Patterns they have previously saved. Learn more about the Spending Pattern Advanced Tool in the Custom Spending Pattern article.
EDITING SPENDING PATTERNS
The Spending Pattern modal is identical for each of the Event Types, with the exception of the Industry Spending Pattern. Within the Spending Pattern modal, users can edit, add, or remove any Commodity, change the Commodity coefficient and/or Local Purchase Percentage (LPP), and normalize or reset the entire Spending Pattern. For Industry Spending Pattern Events, users also have the option to change the Spending Pattern default to Output instead of Intermediate Inputs to match the user’s specified Event Value.
To make edits, use the search bar to locate a Commodity within the Spending Pattern modal. To add a Commodity, click the Add icon.
To remove a Commodity, click the checkbox next to the Commodity to be removed, then click the More Options icon and select Delete.
To edit a Commodity coefficient, overwrite the default coefficient within the Percentage column to a user defined value. The Commodity coefficient represents the amount spent on each Commodity per dollar of Output for Institutional Event Types or per dollar of Intermediate Inputs for every Industry Event Type (Industry Impact Analysis (Detailed or Custom) and Industry Spending Pattern).
By default, all Commodity coefficients within Spending Patterns sum to 100%. Any edits made to a Commodity coefficient may alter the Sum of Percentages to a value other than 100%. There are a few use-case scenarios when a user might want this to sum less than 100%. In all other scenarios, users should first normalize the Spending Pattern to redistribute the coefficients so the remaining list of Commodities sums to 100% while holding any edited values constant. To normalize, click the More Options icon and select Normalize.
Note that if the edits result in the Sum of Percentages to be greater than 100%, IMPLAN will prompt the following warning message. Click Normalize if this was not intentional, or click Continue if this was intended.
By default, Local Purchase Percentages (LPP) within a Spending Pattern are set to SAM which looks up the Regional Purchase Coefficient (RPC) for each Commodity in the Region’s Social Accounting Matrix (SAM). Users have the option to edit the LPP to a designated user value between 0-100% for each Commodity. To edit a Commodity’s LPP, click on the arrow next to SAM, select User Value, and enter a percentage.
Caution should be exercised when editing the LPP as it will alter the Indirect Effects. Overwriting the default LPP forces IMPLAN to change the amount of a Commodity which is purchased from within the Region, regardless of whether or not the supply of a Commodity within the Region actually exists. Learn more about Setting a Local Purchase Percentage.
Use the Reset option to revert the Spending Pattern back to its original state. To reset the Spending Pattern, click the Advanced Menu icon and select Reset.
After editing the Spending Pattern, either click the Save or Save As button. The Save As button will create a Custom Spending Pattern from the edited version.
NOTE OF CAUTION
It is important to remember that any edits to an Industry’s Spending Pattern from the Spending Pattern modal in an Industry Event will only affect the first round of Indirect Effects. This means that any subsequent rounds of Indirect or Induced Effects to the Industry will utilize the default Industry Spending Pattern. If you would like to edit how an Industry demands Commodities for an entire Region (changing all rounds of Intermediate Input spending), this would need to be done using the Customize Region Menu.
RELATED ARTICLES
Setting a Local Purchase Percentage (LPP)
Understanding Intermediate Inputs (II)
Written August 6, 2024