Impact of reduced electricity use


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    It is clear that the Output (i.e., Sales) of the electricity sector would decrease. IMPLAN then estimates the decrease in electricity sector Employment, Employee Compensation (EC), Proprietor Income (PI), Other Property Income (OPI), and Indirect Business Taxes (IBT), as well as the decrease in first-round Intermediate Expenditures, all according to the ratios found in the study area data (e.g., Employment per Output, Employee Compensation per Output). If it is true that the electricity sector would not reduce its workforce, then you could edit the direct employment impact to be 0. However, since EC and PI have fallen, these workers will now be earning less. If this is not expected to occur (i.e., the workers are expected to receive the same amount of pay and benefits), then the decrease must come from OPI and IBT. We don’t want to edit the direct IBT because it is not reasonable to expect the relationship between Output and IBT to change with the change in Output. Thus, if you want to keep Labor Income (EC + PI) the same, then the decrease that had come out of EC and PI will now need to come out of OPI (essentially corporate profits). If you can safely assume that this will be the case, then you can re-run the same analysis but customize the Event so that Employment, EC, and PI = 0. OPI is treated as a leakage anyway, so a reduction in OPI will have no impact. Thus, you do not need to decrease OPI as a part of your analysis – it is just your underlying assumption that corporate profits will fall. Done this way, your impact results will show the impacts of the decrease in Intermediate Expenditures only.
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