MRIO: Multi-Regional Input-Output Analysis When More Than One Region Includes Direct Impacts

Candi Clouse, PhD

July 15, 2019 20:45

INTRODUCTION

Sometimes you may have more complicated analyses that you want to run. Let’s say the bank opening up in Mecklenburg County, NC from the Introduction to MRIO article will also be opening up a smaller office in York County, SC. This can be modeled with Multi-Regional Input-Output (MRIO) analysis to see what the effect of each project will have on the two counties together and separately.

THE PROCESS

STEP 1 – SETTING UP THE EVENT

In our example, the new bank HQ will be opening in Mecklenburg County, NC with $500M in projected Output. Taking this one step further, the bank plans to open a smaller back office facility in York County, SC with a projected $10M in Output. As with the HQ example, this office will closely resemble a financial institution and not support services, so Industry 423 - Monetary authorities and depository credit intermediation was chosen as the Industry.

First, on the Regions screen, select both Mecklenburg County, NC and York County, SC. Click Create Impact.

Create an Industry Output event in Industry 423 - Monetary authorities and depository credit intermediation for $500M. Save the Event and drag it into the Mecklenburg County group on the right side of the screen.

Create a second Industry Output event in Industry 423 - Monetary authorities and depository credit intermediation for $10M. Save the Event with a different name than the first so that it can be identified later. Drag it into the York County group on the right side of the screen. Each Region has its own Event associated with it.

Ensure that the MRIO checkbox at the top of the screen is checked.

Click Run. When using MRIO, the software will take a little longer than a standard analysis. Grab a cup of coffee and when the analysis is complete, click View Results.

STEP 2 – VIEWING THE RESULTS

Mecklenburg County & York County Impact - HQ and Back Office

When you look at the Results screen, you see the Total Direct Output of $510M; $500M in Mecklenburg for the HQ and $10M in York for the back office. Together, they have an indirect effect of $105M and an induced effect of $79M, for a total economic impact of $694M. These results include the impacts of the HQ and back office locations on both Mecklenburg County, NC and York County, SC.

Mecklenburg County Impact - Back Office

With multiple events and multiple regions, we now can consider the spillover effects that events may have other regions outside of where they occur. To do this, we need to use our results filters.

For example, we can see how the new back office operations (located in York County, SC) will spur economic activity in Mecklenburg County, NC. In the Region box, choose Mecklenburg and in the Event Name box choose “Bank Back Office.” Hit the run button on the right.

Notice that there is no Direct impact. You do see a total Output impact of almost $2.6M. This is money that will flow into Mecklenburg County because of the $10M in bank back office operations in neighboring York County.

Mecklenburg County Impact - HQ and Back Office

By only filtering the Region for Mecklenburg, we will see the effect of the HQ and the back office on the county. This shows us the Direct Output of $500M for the HQ, but not the $10M in Direct Output for the back office.

York County Impact - HQ and Back Office

If the Region is filtered by York County, you will see the effect of the HQ and the back office on the county. This shows us the Direct Output of $10M for the back office, but not the $500M in Direct Output for the HQ.

If you add the Economic Indicators from Mecklenburg and York counties, you will get the total Output impact of $694M seen before the Filter was applied.

Economic Indicators Table

When running a Multi-Regional Input-Output (MRIO) analysis with multiple events, tracking how various economic shocks ripple and overlap across geographic boundaries can quickly get complex. Whether you are modeling a multi-phase infrastructure project across different counties or simultaneous investments across distinct sectors, the Economic Indicator Summary table is an indispensable tool for untangling these cross-regional dynamics.

"Group Name" vs. "Region" in Multi-Event Frameworks

To unlock the full potential of this table in a multi-event analysis, look closely at how geography and event organization are split into two distinct columns:

Group Name (Where the activity originates): This represents the project or event's point of origin. When managing multiple events, you can organize them into distinct Groups (e.g., "Facility Construction" or "Operational Supply Chain"). The Group Name tells you exactly which specific economic trigger started the ripple.
Region (Where the impact lands): This shows where the dollars are actually being spent, where supply chain activity occurs, and where jobs are being supported.

Why This Table is Critical for Multi-Event Spillover Analysis

Untangles Overlapping Supply Chains: When running multiple events simultaneously, a standard summary blends the results into a single number. This table maps out the specific pathways of cross-border spillovers. For example, we can clearly see how our Bank HQ event in Mecklenburg County impacts York County, and how the Bank Bank Office event in York County simultaneously sends induced effects back to Mecklenburg County.
Visualizes "Leakage" and Interdependent Spillovers: Standard single-region models treat backward linkages outside the immediate study area as lost "leakage." MRIO captures that leakage. With this table, you can explicitly see how the supply chains (Indirect Effects) and employee spending (Induced Effects) of multiple distinct projects spill over into neighboring commuter regions.
Provides Granular Impact Tracking: Instead of providing a combined total for the entire multi-regional study area, this view separates the results by impact type, location, and event group. For example, you can see exactly how many jobs were generated in York County purely from the household spending of workers tied to the Bank HQ in Mecklenburg county.
Simplifies Multi-Jurisdictional Data Storytelling: When presenting multi-event results to stakeholders, economic development coalitions, or lawmakers across city or state lines, this summary allows you to easily demonstrate interstate commerce and commute-to-work impacts without forcing anyone to dig through separate, massive spreadsheets.

Pro-Tip: When presenting complex multi-event MRIO results, use this specific summary view to highlight mutual benefits. You can easily show how a combined portfolio of regional investments acts as a collective economic driver, turning what used to be considered "lost regional leakage" into a compelling story of regional economic interdependence.