crop change analysis

Comments

9 comments

  • Avatar
    jenny
    1. You are correct that this method would change all producers in the region to behave like yours. An alternative would be to create new ag sectors for yours, but then you would need to subtract their employment, output, etc. from the existing sectors, so that would be fairly complicated and time-consuming. 2. This is the approach I would recommend. This is known as analysis by parts, for which there is a tutorial (http://implan.com/V4/index.php?option=com_docman&task=doc_download&gid=108&Itemid=7) and numerous forum discussions. Basically, you would: a. Import the Industry Spending Pattern for the dairy sector (Activity Options > Import > Industry Spending Pattern), then go to Event Options > Change All > Normalize Events. At this point, the coefficients sum to 1.00 and represent the proportion of the non-payroll budget that is spent on each input. Edit these coefficients as necessary. After making the edits, you'll need to normalize again: go to Event Options > Change All > Normalize Events. Finally, click Activity Options and set the Activity Level to the non-payroll portion of the expenditures. This will give you the indirect effects. b. Run a Labor Income Change Activity for the payroll portion (you can sum the payroll for all crops together into one Activity - the results will be the same). This will give you the induced effects. c. The lost crop sales and associated employment and labor income are the direct effects. As for the forward linkages, if you zero out the coefficient for ag (I'm assuming you mean in the production function of the forward-linked sectors) that only gets rid of the double-counting from the first round of spending; there would still be double-counting from the other rounds of spending. What you need to do is go to Customize > Trade Flows > and set the RSC for the ag sectors to 0. This ensures that none of the ag output will be purchased locally. After doing this, you will need to re-construct your multipliers via Options >Construct > Multipliers.
    0
    Comment actions Permalink
  • Avatar
    gmv
    Thanks Jenny. I have another question... I have two crops in the grains sector. If I import the industry spending pattern for grains and change the coefficients to reflect my rice production budget, then can I just import the industry spending pattern for grains again and change it to reflect a corn budget? Are the activities separate? What happens to the other crops in the grains sector? Thanks.
    0
    Comment actions Permalink
  • Avatar
    ScottL
    You can import another spending pattern no problem. The spending pattern is from the model and once you import it as an activity it is separate from the original spending pattern in the model. You are not changing the original one only the one you imported to use as an activity.
    0
    Comment actions Permalink
  • Avatar
    gmv
    Hi, I have a few follow up questions - 1. The industry spending patterns for the crop sectors have a high coefficient for real estate, buying and selling, leasing, etc. What exactly does this mean? My analysis is considering temporary changes in crop production, so this would be 0 in my modified spending pattern. I just want to make sure I am not missing anything since the IMPLAN coefficient is so high. 2. I asked about forward linkages earlier, but wanted to double check a different method. Can I add a commodity to the spending pattern for grains (say Grain Milling) and include my own coefficient to represent a forward linkage? If this is correct, how do I do it? Or is it better to run a separate impact to grain milling in addition to the effect to the grain sector and add them togehter for the full effect? Thanks!
    0
    Comment actions Permalink
  • Avatar
    ScottL
    1. That would be leasing of land for crop production. 2. It would be better to run it as a separate event. To avoid double counting the purchase of crops by the milling sector, edit the trade flows and set the RPC to 0 for those crop sectors.
    0
    Comment actions Permalink
  • Avatar
    katmcg
    Regarding setting the RSC/RPC to zero to avoid purchasing inputs locally for the imported industry spending pattern, it seemed to me that I would want to edit the LPP in the activity, but then I got all zeros as results. Obviously, that wasn't a good idea. Why? Thanks.
    0
    Comment actions Permalink
  • Avatar
    jenny
    If you set LPP to 0, this means that 0% of the purchase is made locally; thus, there will be no local impact from the purchase (i.e., a value of 0 will be applied to the multiplier for that sector). However, this only gets rid of the double-counting from the first round of spending; there would still be double-counting from the other rounds of spending (i.e., other indirectly affected and induced sectors may still make purchases from that sector), which is why you need to set RPC/RSC to zero.
    0
    Comment actions Permalink
  • Avatar
    gmv
    Hi, I ran a labor income change activity and the results only show induced effects. Is this correct? Should I add the change in labor income that I inputted (-$82K) to the induced effect for total effect? Thanks.
    0
    Comment actions Permalink
  • Avatar
    ScottL
    That is correct. Induced effects are caused by labor income. The change in labor income is really your direct effect.
    0
    Comment actions Permalink

Please sign in to leave a comment.