INTRODUCTION
In IMPLAN, Events are used to specify the economic change or activity occurring in the local economy, in terms of Type, Specification, and Value. Users must provide some level of information about the level of production, spending, or income/revenue generated from the economic activity or policy being analyzed. This article will walk through all available Event Types in IMPLAN and explain when it is appropriate to use them. For more information on setting up each type in IMPLAN, refer to the specific Event Type article linked in each description.
EVENT TYPE DESCRIPTIONS
INDUSTRY EVENT TYPES
An Industry is a group of establishments (businesses) engaged in the same or similar types of economic activity. If the type of business is known to the analyst, then an Industry Event Type is most appropriate.
There are four types of Industry Events that a user can choose from to analyze a business’ activity. Each one is designed with a specific methodology and requires differing input values. By default, an Industry Event represents a single business or Industry in the selected region, therefore only one Event should be used to analyze the effects of the business or Industry.
Every business, and therefore Industry, earns revenue (Output) from the sale of their products or services. IMPLAN uses the Leontief Production Function (LPF) to detail the relationship between an Industry’s Output and its inputs to production. The LPF of an Industry is the sum of its components, which, for the U.S.-based Products, include Intermediate Inputs, Employee Compensation, Proprietor Income, Other Property Income, and Taxes on Production and Imports net of Subsidies. Read more about The Leontief Production Function in IMPLAN to understand how to properly set up each Event Type.
Standard Industry
Standard Industry Events are used to model a change in production for a business or Industry when a user only has one known value, either Total Employment, Output, Employee Compensation, or Proprietor Income.
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There are four different types of Standard Industry Events, based on the the known Event Value:
- Industry Output
- Industry Employment
- Industry Employee Compensation
- Industry Proprietor Income
- When more than one value is known, those additional values can be entered in the Advanced Fields, more on the Advanced Fields can be found in the Event Options article. Alternatively, consider using the Industry Impact Analysis (Detailed) Events to fully customize the Event.
- For Retail and Wholesale Industries, Purchaser vs. Producer Price selection is available. IMPLAN will automatically default to Purchaser Price but a user may change this using the Advanced Fields.
Industry Impact Analysis (IIA)
The Industry Impact Analysis (IIA) Event, which include two types: Detailed and Custom, are also used to model a change in production for a business or Industry.
The IIA (Detailed) Event is recommended when a user has more than one Event Value for the business or Industry they would like to analyze. This Event Type allows users to enter values for Wage & Salary and Proprietor Employment, Total Labor Income, Other Property Income, Taxes on Production & Imports, and Intermediate Inputs, in addition to the same four values from the Industry Events (Output, Total Employment, Employee Compensation, and Proprietor Income). Users can also make edits to the Intermediate Input purchases listed in the Spending Pattern.
In addition to allowing users to enter all the aforementioned values, the Industry Impact Analysis (Custom) Event also allows users to utilize a Custom Spending Pattern. For this Event Type, users select from a list of previously created Custom Spending Patterns for Industries in the Specification, instead of a list of Industries. The IIA (Custom) Event is recommended when users want the capabilities of the IIA (Detailed) Event and the ability to use a Custom Spending Pattern. Learn more about creating Custom Spending Patterns.
Industry Contribution Analysis
Industry Contribution Analysis (ICA) is a method used to estimate the value of a business or Industry in a region, at their current level of production, rather than estimating the value of a change. Output is the only Event Value for this Event Type, either total production dollars or as a percentage of the total Industry Output.
While the focus of the analysis still looks at backward linkages, the purpose of this analysis differs from the standard economic impact analysis. When considering the Indirect and Induced Effects of an impact analysis, we are looking at how all Industries in a Region will respond to a change in the selected Industry. Industry Contribution Analysis shifts this framework to see what level of production in other Industries is being supported by the current activity of the target business or Industry. ICA is a unique method which affects a constraint upon the model by removing any feedback linkages or purchases from the Industry being analyzed.
Find more information about Industry Contribution Analysis Events and determine if an ICA Event is appropriate for the study.
Industry Spending Pattern
The Industry Spending Pattern Event is only ever used to examine the supply chain spending on goods and services (Intermediate Inputs) by a business or Industry. Industry Spending Patterns can be manipulated and edited via the Advanced Fields. As Intermediate Inputs are only a portion of the Industry’s production function, this Event Type will not produce Direct Effect Results. The Event Value for an Industry Spending Pattern is set to Intermediate Inputs, but users have the option to enter Total Output instead.
OTHER AVAILABLE EVENT TYPES
Choosing between these Event Types should be based on the known Event Value. In most cases, users will know the business or Industry which is experiencing a change in production. However, in some cases, information about new activity may not be known from a production standpoint, but rather from a consumption standpoint. Click the following link for more guidance on choosing between an Industry or Commodity Event.
It can also be confusing to choose between a Labor Income Event, Household Income Event, or an Institutional Spending Pattern Event to analyze the impact of individuals and households earning and spending money. Learn more about the type of Incomes in IMPLAN here.
Commodity Output
Commodity Output Events are most appropriate to use when an analyst knows there is a change in Commodity demand or production but does not know which Industries or Institutions (e.g., government) will meet that demand.
There is one key difference between analyzing a purchase as an impact to an Industry versus a Commodity: a Commodity can be purchased from multiple sources. The producers of a Commodity in a Region are indicated by the Commodity's Market Share. The Commodity Output Event will distribute the demand to all producers of the Commodity in the selected Region.
There is only one Event Value for Commodity Events, Output, but there are a few Advanced Fields options to customize:
- Local Purchase Percentage (LPP) of a Commodity Event can be adjusted via the Advanced Fields.
- Purchaser vs Producer Price selection is available for Commodities that can be purchased via a wholesaler or retailer in the Advanced Fields, and will default to Purchaser Price.
Labor Income
The Labor Income Event Type is used to model a change in labor payments isolated from Industry production- e.g. examining the impacts of a wage increase for current employees. A Labor Income Event Value should include all new labor payments in the Region (local workers and in-commuters), including their payroll tax and all benefits (e.g., health, retirement).
When using this Event Type, the model will automatically deduct in-commuting income, payroll tax, personal tax, savings, and imported goods and services. All payroll taxes are assumed to stay in the location of the employment. That is, only commuters' post-payroll-taxes-income is deducted.
With a Labor Income Event, users can specify whether the income is earned by wage and salary employees or sole proprietors (or some combination of the two) but cannot specify the specific household income group receiving the income. After deductions are removed, the remaining income is distributed across all household income groups according to the distribution of the household column totals in the SAM for the Region. At this point the income is applied to the income group specific multipliers and will only produce Induced Effect Results.
Household Income
The Household Income Event Type is used to model a change in Household Income isolated from Industry production and payroll. Examples would be a government stimulus check or tax refund for individuals. Household Income represents any income received by residents for their participation in production, from government and business transfer payments, and from returns on capital (e.g., interest payments, dividends).
In this Event Type, users must specify the particular household income group(s) receiving the income. There are nine Household Income Groups in IMPLAN grouped by the annual amount of income received.
When using this Event Type, IMPLAN will automatically deduct personal tax, savings, and imported goods and services. Therefore, Household Income Event Values should include the total income received by residents in the analysis, including what could be paid in personal tax and/or saved. The model assumes any associated payroll tax and in-commuting income has been excluded from the total Event Value. The leftover amount after deductions is then applied to the multipliers.
Institutional Spending Pattern
The Institutional Spending Pattern Event is used to model general spending or change in demand by an IMPLAN Institution (households, governments, capital, and inventory). In IMPLAN, institutional demand for goods and services is final, meaning that it represents demand for consumption (as opposed to use as an input into the production of another product, i.e. intermediate demand), investment, and/or net additions to inventory.
The Event Value entered in an Institutional Spending Pattern would be the total spending on goods and services (for government this would be the total budget including labor). Institutional Spending Patterns, like all Spending Patterns, are made up of a list of Commodities. The Spending Pattern can be manipulated and edited via the Advanced Fields.
Because Institutions are Final Demanders, each Commodity in the Institutional Spending Pattern is treated like a Commodity Output Event and will create a Direct Effect. This type of analysis will display results for the Industries in the Region directly supported through spending.
Custom Spending Pattern
The Custom Spending Pattern Event is used to model a Custom Spending Pattern that was created by a user for any Industry or Institution. These spending patterns are pre-built from the Dashboard under Advanced Tools or can be created within the Impacts page by saving an edited spending pattern. This Event Type allows users to run an analysis using a pre-built spending pattern and customize it within an Event for use across multiple projects. The type of Effects generated from a Custom Spending Pattern will depend on whether it was an Industry or Institutional Spending Pattern.
WHERE THE EVENT VALUE IS APPLIED
Each Event Type will tell IMPLAN how to analyze the entered Event Value. The following table describes where each value is applied.
| Event Type | The Event Value is applied to... |
|---|---|
| Industry Events | The Output equation of the Industry |
| Commodity Output Events | All Output equations for Industries producing a share of the Commodity |
| Income Events | Labor income or household income group of specified range |
| Spending Pattern Events | Spending Pattern of the Industry or Institution |
EFFECTS BY EVENT TYPE
The only Event Types that will result in a Direct Effect are ones that analyze Industry production: Industry Events, Industry Impact Analysis (IIA), Industry Contribution Events, Commodity Output Events, and Institutional Spending Pattern Events. Labor Income Events, Household Income Events, or Industry Spending Pattern Events will not produce any Direct Effects.
| Direct, Indirect, & Induced | Indirect & Induced Only | Induced Only |
|---|---|---|
| Industry Events | Industry Spending Pattern Events | Labor Income Events |
| Industry Impact Analysis Events | Household Income Events | |
| Industry Contribution Events | ||
| Commodity Output Events | ||
| Institutional Spending Pattern Events |
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Written August 30, 2023
Updated January 3, 2025