Discrepancy in State and County results
I am trying to analyze the impact of soft construction spending such as architectural and engineering cost, legal and accounting cost etc on job creation. I want to analyze the impact on the county and on the rest of the state. My objective is to show the spillover effect beyond the County. To do that I bought two sets of data: County and State.
I inputted the dollar amounts in the County first and got my results; I did the same for the State after adjusting the output per worker and the Values Added per worker to the County data and I got my result for the impact on the entire State.
However, It turned out that the direct effect for the County and State almost matched, which is what I expected,but the indirect and the induced effects for the State came out to be smaller than the County's. So my question is:
1)How is it possible for the County (which is a smaller economic area) generate more indirect and induced impact than the entire State?
2)Is there any way to make adjustments so the impact on the State is larger than the impact on County?
Thank you!
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IMPLAN SupportHi Ali, Just to check to be sure we understand, you went into the Customize> Study Area Data, for every soft cost sector you were impacting and rewrote the values in all fields to match those values at the county level, and still saw lower Indirect and Induced for the state. Is this correct? If so can you please tell us what two data sets you were using and what data year they are from? This will help us to identify what may be going on here. Thanks0 -
Yes, I did go to the Customize>Study Area, and changed the values for the State to reflect the Jefferson County values. I was using 2010 data sets for the State of Kentucky and for Jefferson County. Thanks!0
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IMPLAN SupportThis is happening because your county has a higher Regional Purchase Coefficient (RPC) than the state for many of the affected commodities. If you go to the Detail Results tab and sort by Indirect Effects, you can note which sectors/commodities are most affected by the impact. You can then go to Explore > Social Accounts and see the average RPC for those commodities. You will see that they tend to run higher at the county level than at the state level. Ditto for the induced effects. (See attached spreadsheet). This is not uncommon - a county can have a higher concentration (i.e., greater supply for a given level of demand) of some commodities than the state - the state is basically an average of all its counties and will differ in many ways from any single county. While the state sill certainly have higher total supply of these commodities, it will also have higher total demand for these commodities - RPC is a factor of both supply and demand. The only way to "fix" this is to use MRIO with the county model linked to a model of all the other counties. This would require purchase of the state package (i.e., all counties in the state); if this is infeasible, our suggestion would be to just report the results at the county level. Let us know if you have any further questions. Thanks0
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