RSC vs. RPC?
I seek clarification about when to edit the RSC and the RPC.
We are looking at sector 104 and our client has told us that 75% of their production inputs come from within our study area. When I customize Trade Flows, I see both options of editing RSC and RPC. Which would be fitting under this scenario? I'm still a bit unsure about the difference.
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Here is a knowledge base article on editing the trade flows. The local use ratio is explained. http://implan.com/V4/index.php?option=com_content&view=article&id=548:548&catid=235:KB18 -
Thank you, that definitely explains the difference. If I have decided that I need to edit RSC, I have a question about doing so. Here is an example: In the study area there is one firm in say sector 125. That firm says it purchases 75% of its inputs locally. The RSC for this sector in the trade model is 25%. Would I need to edit the RSC from 25% to 75% for that sector? I am not sure if I am understanding the relationships of the coefficient. Or, would I need to edit the RSC for each input sector from sector 125's production function? Could you please advise or direct me to another reference? -
Ok - The RSC would need to be changed for each of the local production inputs. The best way to do this is by an analysis by parts method. Give me a few minutes to locate the tutorial. However, out of curiosity, this is a pulp mill that purchases 75% of all its inputs locally? That would seem unlikely. Perhaps its just local inputs such as logs that is 75%. If you look at the Social Accounts Explorer and the Industry Balance sheet for sector 104 and select the commodity demand option, you will see all the things that a pulp mill buys. If it is just the major input, logs, then you would simply edit the log commodity 3016 and set the RSC to 75% for that commodity alone. -
Yes, I apologize for being too general. We were above all trying to edit 3016 and 3095 to 75% both of which are major inputs they get locally. There are also a handful of additional commodities they primarily get locally, but you are right, all would be unlikely. Thank you for clarifying the method for doing so. I will keep a look out for the tutorial on analysis by parts. Thank you very much Mr. Lindall. You have been very helpful and concise.
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