Industry Contribution Events

INTRODUCTION

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. While the focus of the analysis still looks at backward linkages, the purpose of this analysis differs from the standard economic impact analysis. ICA shows the relative extent and magnitude of the Industry, event, or policy in the study area.

ICA is a unique method which applies a constraint upon the model by removing feedback linkages (buybacks) to the Industry being analyzed. This method can also be used with single firms, but if/when it is, the results of this method should be considered conservative.

ICA denotes that the study is looking at how the current state of an Industry supports other businesses in the local economy. When this involves a single firm, the analyst will need to determine if the Impact Method or Industry Contribution Analysis Method should be used. The results in either case should be described with words such as "contributes to" or "sustains."  

INDUSTRY CONTRIBUTION EVENTS

IMPLAN can be accessed via app.IMPLAN.com. Once you are logged in, you will be directed to the IMPLAN dashboard. From the dashboard you can navigate to the Regions, Impacts, or Projects screen. 

Once you have chosen your Region and named your new Project, you will be directed to the Impacts screen. From here, click on Add New Event to create an Industry Contribution Event. In this set of examples, 2018 Nevada data is utilized.

In this example, we want to look at the contribution of the entirety of the hotel Industry in Nevada. We will give our new Event a Title, select the Type as Industry Contribution Analysis, the Specification is 507 - Hotels and motels, including casino hotels, and the Value is 1. The buttons after the Event Value give us the choice between entering a dollar value or entering a percentage of the total Industry. In that we want to see the entire Industry, we will select the %. Check out the article Picking an Industry for assistance in choosing the appropriate IMPLAN Industry.

Now that you have your Event, ensure that it is highlighted in teal by clicking on the Event or checking Select All Events at the top of the screen. Now the Events can be dragged into your Group on the right.

You will know when the Events have populated in the Group when the number in the upper right of the Group box equals the number of Events. You will also see a new icon in teal indicating that this is an Industry Contribution Analysis.

Now click Run in the bottom right of the Impacts Screen.

To see how the constraints on the hotel Industry worked, navigate to the Output tab in the Results. The largest Industry in terms of Output was Industry 507 - Hotels and motels, including casino hotels with a total of $15,193,837,564.97. On the Industries by Impact table, you can see that the entirety of this was in the Direct Effect while the Indirect and Induced Effects in this Industry are zero. If we had used a standard Industry Output Event, there would be additional Indirect and Induced Effects in our Results.

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ICA: Introduction to Industry Contribution Analysis

Written July 17, 2020