Preparing and Entering: Event Type and Specification

INTRODUCTION:

The “who” of an analysis is the entity experiencing the initial change or economic activity you’d like to analyze. Keep in mind, IMPLAN is designed to estimate backward linkages, preparing your analysis determines the starting point. 

Answering the “who” question will inform the definition of your Event Type and Specification in IMPLAN.

INDUSTRY & COMMODITY EVENTS:

When an Industry is experiencing the initial economic activity being analyzed, the question of who is answered by choosing one or more Industry Sectors. There are four different Event Types for analyzing a change in production in a given Industry: Industry Output, Industry Employment, Industry Employee Compensation, and Industry Proprietor Income. If you only have one Industry Event Value, simply select 1 of the 4 Industry Event Types based on the value you have.

Your analysis can include more than one of these Event Values. For example, you might want to look at a change in crop production and associated manufacturing.

When you have more than one Event Value, we recommend choosing your Event Type based on the chart below. Your Industry Event Values will be processing based on this prioritization of Event Values regardless of the Type you select: 

Once you’ve picked your Event Type, you’ll be able to pick the Industry that best represents the “who” of your analysis. For example, if you want to look at an increase in production for a local car assembly plant, you would choose Sector 340 - Automobile manufacturing.

To analyze the contribution of existing production or spending an Industry Contribution Event may be appropriate. Who is still answered by choosing one or more Industry Sectors. 

To analyze the change in production or spending on a Commodity, who is answered in the Commodity Output Event with the appropriate Commodity. If you want to look at an increase in the production of cars in your region, choose Commodity 3340 - Automobiles. This is because although the cars will primarily be produced by Industry 340, adjacent Industries may also produce some cars in addition to their primary products.

LABOR & HOUSEHOLD INCOME EVENTS:

Maybe the who you want to affect is actually individuals. If these individuals are producing something and you know the Industry and associated Employment, Employee Compensation, or Proprietor Income, this should be modeled through an Industry Event. However, sometimes we don’t know what Industry is being affected or there isn’t an Industry being directly affected at all. A few examples of when an industry may not be directly affected by a change in spending by individuals include minimum wage increases, personal tax changes, or an increase in population of individuals who do not work in the Region (perhaps retirees or commuters).

Using a Labor Income Event allows you to choose either Employee Compensation or Proprietor Income to model changes in spending, without specifying a particular Industry.

A Household Income Event allows you to choose what income group would see a change in spending. Again, this is not associated with a specific Industry. This is helpful when you want to model an Event like a subsidy to a particular group of earners, for example households that make less than $15,000 per year.

Note that Labor Income and Household Income Events do not include Direct Effects as these Event Types are only modeling the spending of households without an associated Industry or Commodity.

INDUSTRY SPENDING PATTERNS EVENTS:

Spending Patterns measure the business to business backward linkages or supply chain effects of the Industry. Industry Spending Pattern Events are best used when modifications to an Industry’s Production Function are necessary that cannot be made with a standard Industry Event. When detailed information is known about the specific Industry’s spending, a Spending Pattern Event can be adjusted to reflect the specific purchases or ratios of purchases. Industry Spending Patterns include all Intermediate Expenditures for a given Industry. Note that Industry Spending Pattern Events also do not include Direct Effects.  

INSTITUTIONAL SPENDING PATTERNS EVENTS:

Institutional Spending Pattern Events are most appropriate when an analyst would like to model the effect of a fiscal spending change. This is only at a high level as the specification options for Institutional Spending Pattern are general government entities rather than specific government programs. Other Event Types are more appropriate when the analyst knows more specifically how the government may be changing their spending. Unlike Industry Spending Patterns, Institutional Spending Patterns include payroll expenditures for employees. Institutional Spending Pattern Events do yield a Direct Effect.

EVENT TYPES & WHEN TO USE THEM:

So here’s the basics of each Event Type and when to use them:

RELATED TOPICS:

Explaining Event Types

Framing Your Analysis

Written December 10, 2019