Employment Impact Analysis - Large State Univ

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    IMPLAN Support
    Hello Khalid, We apologize, but we aren't entirely clear on your methodology and the numbers that you are working with here, so we are going to have to ask a few clarification questions. [ol] [li]When you setup the analysis of your university did you use a spending pattern for schools, in a Analysis-by-Parts methodology?[/li] [li]When you created your Industry Change in Sector 438 what did you use as your initial input value? This Sector can be a little tricky to work with, and we often recommend using a Labor Income Change instead if you are working with an Analysis-by-Parts method. If you aren't working with an Analysis-by-Parts methodology you may be double-counting some elements.[/li] [li]In an Analysis-by-Parts methodology you should not see any Direct jobs reported, unless you setup the spending pattern as a series of Industry Changes. Is this the case? If not, could you explain to us where the Direct jobs are being reported from?[/li] [li]If you did setup the spending pattern portion of the analysis as a series of Industry Change Activities, did you remember to set Local Purchase Percentage to SAM Model Value? This is crucial to not overestimating your institutions contribution.[/li] [li]Could you provide just a little broader idea of what analysis step or steps yielded the Employment below, we would be glad to assist you, but we want to be sure that we understand clearly the numbers you are working with. [/li] [/ol] Thanks!
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    khassoun
    Hello, 1. We used a Analysis-by-parts methodology. We created an activity for each of our spending components. The following spending components were industry change activities: Payroll (sector 438), Construction (sector 34), Research (sector 376) and Visitor Spending. The following activities were imported Institution Spending Pattern (State/Local Gov't Edu): Financial Aid, Operations and Equipment (the level was set to the total dollars spent for the respective component). 2. For payroll sector 438, we set the employee compensation input to the total payroll expenditure of the university and set the employment field equal to the number of employees at the university. 3. The payroll activity reports the direct employment equal to the number of employees I inputted. It reports no indirect effect but it does report an induced effect. The additional direct employment effect is from the other activities. 4. We did not change the LPP to SAM. Could you explain when that is appropriate/required.
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    IMPLAN Support
    Hi Khalid, Based on your response below, we would strongly recommend considering project consultation or training to help you better understand some of the caveats of using the model. Here are a couple of concerns and considerations we see based on your response. -There may be double counting of payroll for the university itself, because some of the spending patterns include the payroll Sector. Did you verify that the spending pattern you used did not include payments to payroll? - Did you remove Sector 376 for the spending pattern for institutions, if this is a purchase of research services? If so did you rebalance the spending pattern so that your Activity Level definition matches the Sum of Event Values? If not, you may be double counting Activity to this Sector. - Do you know if all the research that is purchased or provided is local? If this is a purchase of the university did you set the Local Purchase Percentage? If this is produced by the University like the University providing research services, did you ensure that funds for this were not also included in the operational value of the university. If they were, you have an issue of double counting. - You will not want to include Construction or equipment purchases in the same Scenario as you operational and student spending because these are presumably recurrent, whereas construction and other Capital Expenditures are usually periodic. - Assuming that you don't have the double counting issue listed above, with Sector 438, did you take in-commuters into account? Did you enter the value of payroll as Industry Sales or did you enter is Employee Compensation? Technically because of caveats of this Sector payroll value should be place in compensation. -With Visitor Spending, is that students, parents, other? One common criticism of a lot of university impact studies is that they count student spending when that spending would occur in the economy whether the university was there or not. Did you take in consideration locality of students, and whether they might be there regardless of your universities presence? It is also important to be sure that you are double counting purchases like housing costs that are in the dorms, university sporting games, food on campus, books from university book stores (often part of the university's operational values). - How are you examining Financial Aid, unless you are splitting this from college operations you are likely double counting, since financial aid is primary driver of operations. Were you trying to demonstrate something specifically here? - With equipment, likely little or none of equipment is manufactured locally. How did you assign these costs? If you assigned to producing Sectors did you apply Margins and Local Purchase Percentage? Did you zero out the retailer if these were purchases from a wholesaler? If you assigned these to wholesale, it is probably best to see what the Local Purchase Percentage is for the wholesale Sector for your region? It may also not be safe to assume that the wholesalers of equipment are local. - The Direct Employment should account for your University employees, but you may have double counting of Employment as a result of the research component if that is a product as opposed to a purchase of the university, again, that Employment should be counted in your payroll. You may also want to separate Visitor expenditures from operational expenditures so that you better describe these types of Employment. -We would expect there to be no Indirects associated to the payroll Sector as the spending pattern counts for the Indirect purchases. Also the Direct Employment in the spending pattern is actually the first-round of local Indirect Employment, sometimes this is easier to storyboard rather than reporting in a tabular format. But if you are reporting in a tabular format, you will want to add the Direct Employment from the spending pattern to the Indirect. -The Local Purchase Percentage should be set to SAM Model Value for things that are margined, all capital expenditures, and any budgetary purchases. Hopefully this will help, but again we would recommend considering some in-person assistance with this.
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