Explaining Event Types

INTRODUCTION

In IMPLAN, Events specify the economic transactions occurring in the local economy being analyzed, in terms of Type, Specification, and Value. This article will walk through each Event Type available in IMPLAN and when it is appropriate to use. For more information on setting up each type in IMPLAN, refer to the specific Event Type articles. 

EVENT TYPE DESCRIPTIONS

INDUSTRY EVENTS

An Industry is a group of establishments (businesses) engaged in the same or similar types of economic activity. Industry Events are used to model a change in production for an Industry or Industries. If the type of business is known to the analyst, then an Industry Event is most appropriate to model the impact. 

  • There are four different types of Industry Events:
    • Industry Output
    • Industry Employment
    • Industry Employee Compensation
    • Industry Proprietor Income
  • These four Industry Event Types represent each value that can be entered into a single Industry Event. Picking among the 4 types should be determined by which value is available about the Industry.
  • 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. 
  • Purchaser vs. Producer Price selection is available for Retail and Wholesale Industries in the Advanced Fields; IMPLAN defaults to Purchaser Price.

INDUSTRY IMPACT ANALYSIS (DETAILED) EVENTS

The Industry Impact Analysis (Detailed) Events are also used to model a change in production for an Industry or Industries. However, this Event Type allows users to enter values for Employment - Wage & Salary and Proprietor, Labor Income, Intermediate Inputs, Taxes on Production & Imports, and Other Property Income in addition to the same four values from the Industry Events (Output, Employment, Employee Compensation, and Proprietor Income). This Event Type is recommended when a user has more detailed information on the business or Industry they would like to specify. 

INDUSTRY CONTRIBUTION ANALYSIS EVENTS

Industry Contribution Analysis (ICA) is a method used to estimate the value of an Industry or group of Industries in a region, at their current levels of production, rather than estimating the value of a change. 

While the focus of the analysis still looks at backward linkages, the purpose of this analysis differs. When considering the Indirect and Induced Effects of an impact analysis, we are looking at how Industries in a Region will respond to a change in the key Industry or Industries. Industry Contribution Analysis shifts this framework to see what Industries and what level of production in these Industries is being supported by the current activity of the target Industry or Industries in the Region. ICA is a unique method which affects a constraint upon the model by removing feedback linkages or buybacks to the Industry being analyzed.

Find more information about Industry Contribution Analysis Events and determine if an ICA Event is appropriate for the study. 

COMMODITY OUTPUT EVENTS

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. Click the following link for more guidance on choosing between an Industry and Commodity Event.

There is only Event Value for Commodity Events, but there are a few Advanced Fields options to customize:

LABOR INCOME EVENTS

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, personal tax, and savings.

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. 

HOUSEHOLD INCOME EVENTS

The Household Income Event Type is used to model a change in Household Income that is independent of production and payroll. Household Income Event Values should include all new household income for all residents in the region, including their personal tax and savings.

When using this Event Type, IMPLAN will automatically deduct personal tax, savings, and imported goods and services. The model assumes payroll tax and in-commuting income has been excluded from the total Event Value. Employee benefits should be included as household income in the Event Value. 

The leftover amount after deductions is then applied to the multipliers. 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 by people for their participation in production, from government and business transfer payments, and from returns on capital (e.g., interest payments, dividends).

It can be confusing to choose between a Labor Income Event, Household Income Event, or some other Event Type to analyze the impact of individuals and households earning and spending money. Learn more about the type of Incomes in IMPLAN here.

INDUSTRY SPENDING PATTERN EVENTS

The Industry Spending Pattern Event is used to examine only the spending on goods and services (Intermediate Inputs) by an Industry. Industry Spending Patterns can be manipulated and edited via the Advanced Fields. This Event Type will only model the supply chain spending of Intermediate Inputs for the selected Industry and will not produce Direct Effects. 

INSTITUTIONAL SPENDING PATTERN EVENTS

The Institutional Spending Pattern Event is used to model a general change in an Institution's spending such as the local governments spending on education. The Value entered in an Institutional Spending Pattern should be the total value of spending on goods and services as well as spending on labor (unlike the Industry Spending Pattern Events). Institutional Spending Patterns can be manipulated and edited via the Advanced Fields. 

CUSTOM SPENDING PATTERN EVENTS

The Custom Spending Pattern Event is used to model a Custom Spending Pattern that was created by a user for an 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 start with a change in Industry production: Industry Events, 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    

 

Related Articles

Event Options

 

Written August 30, 2023