case study 10 - impacts of private colleges
Good morning:
Your forum and case studies have been invaluable to me. However I need clarification on case studies involving private colleges (I believe authored by aaron alward). In case 10, operating expenditures seem to go in to the model whole, without adjustment for whether some spending (such as payments to vendors) by the college is made to businesses outside the study area. Is this because the underlying I-O model accounts for some leaks of this type and the IMPLAN results automatically reflect it? If I can estimate how much of operating expenditures are paid to outside businesses, do I need to compare this percentage with what the model assumes is actually taking place? Where do I look? I'm really a novice in plowing through the matrices.
The same story occurs in case 10 regarding construction expenditures. The full amount described is entered in case study 10, without discussing whether the amount is completely internal to the study area. Does the model take into account that some capital expenditures are paid to outside firms? If not, and some of my capital expenditures are paid to outsiders, how do I adjust my numbers?
Does the LPP have anything to do with these questions, or is that an adjustment for a different set of circumstances?
Sorry for the long email, but I am trying to be lucid even though I am quite confused. Appreciate any help in sorting this out for me.
Sandy O
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The multipliers have the leakages built into them. When you construct a model, the gross transactions between businesses and businesses and households have the regional purchase coefficient applied to them to make them local transactions. The direct effect you apply to the impact is the total direct expenditure taking place in your region. That value is applied to the multipliers which have the leakeage built in. You don't need to make any further adjustments.
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