# Multipliers

## INTRODUCTION

Multipliers are a measure of an Industry's connection to the wider local economy by way of input purchases, payments of wages and taxes, and other transactions. From the Regions screen, click the View Region Details button or click the name of the region. Note that all the data in Region Details is nominal; it is not adjusted for inflation.

## SUMMARY MULTIPLIERS

Summary Multipliers in IMPLAN represent the Total Effect to All Industries in a Region per Direct Effect. The Summary Multiplier view breaks down each Multiplier by: Indirect, Type I, Induced, and Type SAM for each view by: Output, Employment, Labor Income, and Total Value Added as well as the components of Value Added: Employee Compensation, Proprietor Income, Other Property Income, and Tax on Production and Imports as they are applied to Industry x Industry Input-Output transactions.

Multiplier Summary Multiplier Example
Output The Output Multiplier describes the total Output generated as a result of \$1 of Direct Output in the impacted Industry. If \$1 of Output in an industry generates an additional \$8 of activity in the local economy, the Output Multiplier would be = 9: The original \$1 and an additional \$8.
Employment Employment Multipliers describe the total jobs generated as a result of 1 Direct job in the impacted Industry. If 1 Direct job in the target industry generates an additional 5 total jobs in the local economy, the Employment Multiplier would be = 6: The original 1 and an additional 5.
Labor Income Labor Income Multipliers describes the total Labor Income generated as a result of \$1 of Direct Labor Income in the impacted Industry. If \$1 of Labor Income in an industry generates an additional \$3 of Labor Income in the local economy, the Labor Income Multiplier would be = 4: The original \$1 and an additional \$3.
Total Value Added & Components of VA Total Value Added Multipliers describe the Total Value Added generated as a result of \$1 of Direct Value Added in the impacted Industry. If \$1 of Direct Value Added in an industry generates an additional \$4 of Value Added in the local economy, the Value Added Multiplier would be = 5: The original \$1 and an additional \$4.

## DETAIL MULTIPLIERS

Detail Multipliers represent the Total Effect to a specific Industry per Direct Effect. The Detail Multiplier breaks the Summary Multiplier into partial Multipliers associated with purchases from other Industries. All Detailed Multipliers of a target Industry sum to the corresponding Summary Multiplier for that target Industry. That is to say that the Summary Multiplier for Industry X will equal the total of each of the Detail Multipliers for Industry X.

The Detail Multiplier view breaks down each Multiplier by: Type I, Induced, and Type SAM for each view by: Output, Employment, Labor Income, and Total Value Added as well as the components of Value Added: Employee Compensation, Proprietor Income, Other Property Income, and Tax on Production and Imports as they are applied to Industry x Industry Input-Output transactions.

In the Regions Multipliers Detail, the default Industry is always Industry 1 - Oilseed farming. In order to see the Industry of interest, click the Filter button and choose the appropriate Industry. Click Refresh to filter for that Industry.

Multiplier Detail Multiplier Example
Output The Output Multiplier describes the total Output generated in a specific Industry as a result of \$1 of Direct Output in the impacted Industry. If \$1 of production in an impacted Industry generates \$0.75 of activity in Industry X in the local economy, the Detail Multiplier for Industry X would be = 0.75.
Employment Employment Multipliers describe the total jobs generated in a specific Industry as a result of 1 Direct job in the Impacted industry. If 1 Direct job in the impacted Industry generate 5 jobs in Industry X in the local economy, the Employment Multiplier for Industry X would be = 5.
Labor Income Labor Income Multipliers describes the total Labor Income generated in a specific Industry as a result of \$1 of Direct Labor Income in the impacted Industry.

If \$1 of Labor Income in the impacted Industry generates

\$0.25 of activity in Industry X in the local economy, the Detail Multiplier for Industry X would be 0.25.

Total Value Added & Components of VA Total Value Added Multipliers describe the Total Value Added generated in a specific Industry as a result of \$1 of Direct Value Added in the impacted Industry.

If \$1 of Value Added  in the impacted Industry generates

\$0.50 of activity in Industry X in the local economy, the Detail Multiplier for Industry X would be 0.50.

## PER MILLION EFFECTS

The Per Million Effects show the dollars or jobs associated with \$1M of new Output. Thus, for Direct Output Effects, if an Industry exists in the Region, the Effect will be \$1M. Users will then see the Indirect Effect, the Induced Effect, the Type 1 Effect, and the Type SAM Effects.

The Effects Per Million Dollars of Output view breaks down each Effect by: Direct, Indirect, Induced, Type 1, and Type SAM for each view by: Output, Employment, Labor Income, and Total Value Added as well as the components of Value Added: Employee Compensation, Proprietor Income, Other Property Income, and Tax on Production and Imports.

Effect Per Million Dollar Effect Example
Output The total Output associated with \$1M of new Output in an Industry. If \$1M of Output in an Industry generates an additional \$1.4M in the local economy, the Type SAM Effect would be =\$2.4M. For Output only, this is equal to the SAM multiplier.
Employment The total Employment associated with \$1M of new Output in an Industry. If the Type SAM Effect is 11.66 jobs, that is the number of jobs needed in that Industry to support \$1M of new Output.
Labor Income The total Labor Income associated with \$1M of new Output in an Industry. If \$1M of Output in an Industry generates \$500,000 in Labor Income in the local economy, the Type SAM Effect would be =\$500,000.
Total Value Added & Components of VA The Total Value Added associated with \$1M of new Output in an Industry. If \$1M of Output in an Industry generates \$700,000 in Value Added in the local economy, the Type SAM Effect would be =\$700,000.

## SORTING

The title bar displayed across the top of each Multiplier table contains buttons that can change the viewing attributes of the table. Column titles act as sorting buttons. Initially most views are sorted by Industry or Commodity code in ascending value (first row is 1 last row is 546). To change the way all fields in the table are arranged, click on the title of the desired column. All data in the table will be sorted in descending order (highest values listed at the top of the table) relative to the column title. To change how the data is sorted, click on another field. When the view has been sorted by a column other than Industry Code, the selected column title will appear with an arrow to its right indicating that the table has been sorted by this column header.

The download function allows data to be exported as a CSV or PDF by clicking on the Dashboard Actions icon in the upper right corner of the table.

## RELATED ARTICLES

More on Multipliers

Explaining the Type SAM Multiplier

## VIDEOS

The Multiplier Effect in Economics

More on Multipliers

## REFERENCES

Miller, R.E. and P.D. Blair. 2009. Input-Output Analysis: Foundations and ExtensionsSecond Edition.  New York: Cambridge University Press.

Written August 30, 2023