Producer Prices

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    ScottL
    You are correct that all output values are in terms of producer prices. I am not sure what you mean by "description of the economy". If you mean your impact results, yes they are in producer prices. The retail sector value of output is the gross retail margin. For what sectors are you esimating sales? LPC should be 100% in this case.
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    spkane
    We are estimating for any sectors that might horticultural or lawn and garden sales - this includes the sod producers, lawn and garden equipment manufacturing, landscape services/architecture, and portions of wholesale and various retail sectors. Proportions primarily from other studies, economic census, and dept. of labor data by naics for employment. After calculating contribution, want to compare as fraction of overall economy from study area data.
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    DougO
    The software helps you convert the purchaser value of lawn and garden supplies to producer prices. For example, if I wish to model the impact of a $1 million purchase in lawn mowers bought within a local region: 1) Setup Activities > New Activity > Industry Change 2) Click on New event then choose the manufacturer of the good sector (can look for sector by right clicking on "Sector" field and type "mower" in the search box). I am choosing sector 204. Note, if the software warns us the industry does not exist, this is perfectly fine as some of the margins will exist locally. 3) Enter $1,000,000 in Industry Sales 4) Click on Event Options > Edit Event Properties > Margins > Yes (this converts purchaser prices to producer prices) 5) Click on Event Options > Edit Event Properties > Local Purchase Percentage > Set to SAM Model Value (We may know that the retail margin is for a local provider, but usually we do not know where the mower was manufactured, wholesaled or base of the transportation sectors) 6) Click on Event Options > Edit Event Properties > Margins > Edit (We can now see how the margins were distributed, what the values are, and how much will be local -ie, impact the region) 7) Change %Local for row 323 Retail Store - Building Material back to 100%. (We do know the retail was local) 8) Save the change. If you look at "Preview" button - upper right corner you can see the values in $2010 (deflated) and in producer prices that will be applied to the multipliers. This value total may be significantly less than $1,000,000 because of imported lawn mowers, wholesale and transportation costs. The other option is to apply the purchase value directly to a Retail sector. In this case the software will ask if this is a "Gross Sale" or "Gross Margin" (you would choose "Gross Sale" normally). This would assume that only the gross margin portion (retail) would be local - all manufacturing value, wholesale and transportation costs would be a leakage. Once you have the impact of all goods, you can compare the results to the overall economy.
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    spkane
    I don't think that "[i]The software helps you convert the purchaser value of lawn and garden supplies to producer prices.[/i]" will apply in this case unless I have misunderstood you or the multi-sector contribution protocol. What we want to look at is the contribution of the industry in its entirety (and as a portion of the total economy), which falls across many sectors. We are primarily using figures from within the model to look at this and the multi-sector contribution protocol. Based on secondary sources, have taken fractions of certain IMPLAN sectors (after making all of the multi-sector customizations to IMPLAN) and run the model. If I want to compare these results to the overall economy, as found in the study area data, I would need to keep it in producer prices, correct? THANKS!
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    spkane
    Forgot...can you link me to a good example study of contribution analysis?
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    DougO
    You are correct - if you are using fractions of IMPLAN data, you do not have to margin as the entire data set is in producer prices. This describes the contribution analysis: http://implan.com/v4/index.php?option=com_content&view=article&id=660%3A660&catid=253%3AKB33&Itemid=1 ...but in your case it will lead to a conservative analysis as normally someone is trying to stop the activity of an entire industry rather than a fraction of an activity. For example, I am stipulating that 15% of all purchases from Building Material and garden supply retail relates to lawn care activity. It's true that I do not want my impact to buy more lawn care related purchases (which would be double counting as I have specified all such purchases as my direct); however, it will stop any indirect and induced effects on any non-lawn care activity - such as retail purchases for painting the living room or buying window treatments.
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    DougO
    It occurs to me that you can do both. Rather than zero'ing out the RSC for the retail sector, as in a traditional contribution analysis, you can reduce it by 15% to roughly remove the indirect portion of the lawn care activity.
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    spkane
    Got it, thanks. Good example study that you know of?
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    DougO
    One of the techs went on-line for me and came up with this recent analysis: http://ageconsearch.umn.edu/bitstream/117167/2/AAE687.pdf that describes the input-output analysis. This one I like better because it is pitched more to the audience: http://legacy.mnhs.org/sites/legacy.mnhs.org/files/files/EIA%20MNHS%20Heritage%20Fund%20Economic%20Analysis%20021511%281%29.pdf Note that while they both use the term "Contribution Analysis" it is not clear that double counting is an issue.
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    spkane
    Will mention double counting in our study, as outlined in the multi-sector instructions. One last thing, since there is double counting, is it fair to say that I should not use the tax impact? Or if we do, to make sure that we emphasize the double counting issue?
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    DougO
    If you follow the suggestion of reducing the RSC of the sector by the proportion of the sector representing your target activity, you will avoid the double counting.
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