When starting an IMPLAN analysis, you should first frame an analysis by identifying the who, what, where, when, and why of the analysis. Each of the first four questions are heavily influenced by the why of your analysis. For some context, read more about the data you can bring to IMPLAN.

Framing your analysis is key to ensuring that studies are, first, prepared properly, and second, created properly inside IMPLAN. Answering the following questions before entering your analysis into the IMPLAN tool is a great way to ensure you’ve thought through the framing of your analysis and have the information you need.



WHO are the actors? 

Which Industry, Industries, or Commodities are experiencing a change?

  • Buyers create a demand for products—this is a demand change.
  • Sellers respond to demand changes by increasing production (Output). So, the seller is our actor.


WHAT is the value of the economic change?

  • One or more factors may be known about the change in production or expenditures, including Output (production value), Employment, or Employee Compensation (wages and benefits).


WHERE is the impact occurring? Where do you want to measure the effect?

  • These are important considerations when determining a model region.
  • Where you want to see the results occurring should be influenced by your Why and the audience/stakeholders involved in achieving your end goal with the study. Defining a functional economy may also be valuable to consider. A functional economy encompasses the major labor and production shed of the impact or contribution being modeled, meaning the region captures the local supply chain and areas in which employees are living and spending their income.
  • Region levels in IMPLAN include:
    • ZIP Codes
    • Congressional Districts
    • Counties
    • States
    • US Total
  • These Regions can be building blocks for Combined Regions or they can be linked together via a Multi-Region Input-Output Analysis (MRIO).
    • Be aware of aggregation bias – which stems from the loss of detail that occurs when you combine regions together to form a blended larger region.
    • Consider MRIO which estimates the interregional linkages of trade and commuting effects


When is the Impact taking place? In what Dollar Year are your inputs?

  • The Data Year indicates the year of the economy the model is based on, so if you are using a 2017 Data Year, your Region Details, Multipliers etc. will be based on the 2017 economy for the Region. The Data Year should be set to the year of the economy that best represents when the event occurs.
  • Deflators are applied to input values to convert them into terms of the Data Year before applying the multipliers.
  • Does the impact occur over a full year, a partial year, or a series of years?
  • Accounting for inflation - keep in mind that if historical survey data is used, the year of the data source should be used as the Dollar Year.


WHY are you performing this Economic Analysis? 

It is always smart to consider ALL potential audiences for your study. Ultimately, doing so may help you recognize the level of detail in which your final report should describe your study. Think about your audience:

  • What are you trying to communicate? 
  • What drives them?


Written December 10, 2019