military base study - R&D focus

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Raija

• April 06, 2012 01:53

Hi, I am working on the economic contribution, using an analysis by parts approach, of a military base, whose primary function is research and development. Is it appropriate to run their operating expenditures through the R&D sector rather than federal gov't defense? If yes, is there anything I should worry about that is not being accurately portrayed by not using a government sector? Thank you.

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  jenny

  • April 06, 2012 02:56

  We often suggest using the private sector as a proxy for government activity, so this is fine. When setting up the impact, you will want to set Proprietor Income and Other Property Income to zero. When reporting the results, you will want to ignore any direct tax impacts.

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  Raija

  • May 08, 2012 22:47

  Typically, with analysis by parts, we import the industry sector or institution spending pattern (because we analyze payroll separately). How do you edit the proprietor income and other property income when importing an industry sector? Is this what you meant below when you suggested it?

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  ScottL

  • May 08, 2012 23:28

  Usually in ABP (analysis by parts) you model the proprietor income as a labor income activity type. Other property income in considered a leakage in impact analysis and is not modeled.

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  Raija

  • May 08, 2012 23:41

  Hi, O.k., so is that why in the earlier response to my first question, it was suggested that I zero out those aspects? If so, I see how you can zero them out when running an event, but not when running an imported sector. Does that make sense?

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  ScottL

  • May 09, 2012 01:16

  When you are running an impact on an imported activity, the events represent just the production function. Notice that the sum of the events is less than 1. The activity is only running the intermediate purchases. The value added elements are not included.

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  Raija

  • May 09, 2012 01:38

  O.k. - so, ignore Jenny's comment earlier because it doesn't apply to the ABP method we are using and do not attempt to customize the study area data for the Scientific R&D sector?

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  ScottL

  • May 09, 2012 02:26

  Correct.

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