interpretation of direct/indirect HH ISP impacts
I understand that the difference between the ISP for Households and the Household Income Change activity type is that the former considers the full value of spending to be disposable income. I have determined that I want to use the institutional spending pattern for this reason. I understand why the HH Income Change activity type only produces induced impacts, but am having a hard time figuring out what to do with the direct, indirect and induced impacts that come from the ISP. Is there a way of interpreting the "direct" and "indirect" impacts from the ISP that makes sense from an economic perspective, or should I lump everything into "induced" when I write up the results? Thank you.
Was this post helpful?
-
Hi Michelle, That's a great question. The Labor Income Change and Household Income Change activity types yield induced effects only because they are usually run alongside an accompanying Industry Spending Pattern, so the spending of that income is assumed to be [i]induced[/i] by some other activity (i.e., a change in output of a particular sector). This is known as analysis-by-parts. A household spending pattern, on the other hand, can be used as a final demand driver for studies, such as tourism or student spending. In this case, the spending could be considered as direct effects. But if this spending is part of an industry labor effect, then the true "direct" effect is the value of that industry's production, while the household spending associated with that production is the induced effect - i.e., you would sum the "direct", "indirect", and induced impacts as induced.0
Please sign in to leave a comment.
Comments
1 comment