Margins

Hi Jimmy, [url=http://implan.com/V4/index.php?option=com_multicategories&view=article&id=680:680&Itemid=71]This link [/url]shows which commodities are sold retail organized by which retail Sector they are sold through. You are correct that marking Yes or No in the Activity Template determines whether Margins are set or not. When setting Margins on producing Sectors it may be worth setting the Margined Events to SAM Model Value. The simplest way to do this is to set the LPP once you have imported the Events into the software. To change individual Events you can use the Event Options> Edit Event Properties>Set Local Purchase Percentage> SAM Model Value, to set all Local Purchase Percentages to the SAM value you can use the Event Options> Change All>Set Local Purchase Percentage> SAM Model Value. The reason for this is that even if a sale is made at a local retailer, it is typically not a safe assumption to say that all the wholesale, transport and production is local to the model. Through the [url=https://implan.com/v4/index.php?option=com_multicategories&view=article&id=567:567&Itemid=71]Event Options> Edit Event Properties>Margins> Edit[/url]you can set the retail back 100% if that is your studies assumptions. As a general rule when you think of a commodity, if you can't purchase it at a retail store, it is unlikely to have Margins available. The place where this gets a little confusing is in common household items that you might think of purchasing at a lot of the big box home and garden stores. Since these items are used for home maintenance, and BEA treats home maintenance as an industry in IMPLAN these types of purchases are not considered Margined commodities by BEA. If we can provide additional assistance or guidance please let us know.

A couple clarifying questions: 1) When I set margins to yes for a non-retail sector, it then treats all wholesale, production, transportation as 100% LPP unless I set it to SAM or some other LPP rate? 2) What is the default LPP (SAM or 100) for retail sector sales that I set to Gross Margin Sales? Thanks, Jimmy

I meant Gross Retail Sales, sorry.

Hi Jimmy, By default, the Model sets all LPP values equal to 100% unless you are using an Industry Spending Pattern Activity type or an Institution Spending Pattern Activity. This is because for most purchases looked at in IMPLAN the Study Area geography is determined based on where you know the Direct Activity is taking place. Local Purchase Percentage modifies only the value of the Event (i.e. it modifies only the Direct expenditures). Regional Purchasing Coefficient takes care of making sure that all Indirect and Induced rounds of purchasing occur at appropriate local values based on the ratio of supply and demand for that region. Thus by default the Model sets the Local Purchase Percentage value to 100%. Setting the Local Purchase Percentage to SAM Model Value says that you want to use the Model's Regional Purchasing Coefficient estimates to gauge the amount of the Direct effect that is likely to occur locally. In the case of Margining a producing Sector, the Margined portions all Direct Effects and thus all subject to Local Purchase Percentage. Setting Local Purchase Percentage equal to SAM Model Value for the producing Sector thus sets it to appropriate Regional Purchasing Coefficient value for each Direct Effect (wholesaler, retailer, transport and producer). In short, yes, by default all Sectors imported as an Industry Change will have a default Local Purchase Percentage of 100% for both the non-retail and the retail Sector. But you would only want to change this for the retail Sector if you did not know that all the retail purchases in your region were coming from local stores. Please let us know if you have any additional questions.

Does it still apply in 2025?