Construction Materials Purchased Outside Region

Hi Craig, We presume based on your question that you have the Study Area Data for both the region where the track is being built and the region from where the steel will be purchased? If this is the case you certainly can demonstrate Direct effects for the steel in its regional geography and the effect of the local construction that the other potentially local inputs for the geography in which the track is being built. However, the methodology for doing this is a bit more complicated than what you have described. If you want to remove the purchase of steel from the spending pattern of Sector 36, so that you can impact it as a Direct effect in the second region (let's call the steel producing state 'S')then you will need to use a modeling methodology called [url=https://www.google.com/url?q=http://implan.com/v4/index.php%3Foption%3Dcom_multicategories%26view%3Darticle%26id%3D730:case-study-analysis-by-parts%26Itemid%3D71&sa=U&ei=2poaU_P1LZPpkQew04DYCw&ved=0CAoQFjAF&client=internal-uds-cse&usg=AFQjCNGPj7NruAW-tF7_7yQFWgImwUT6Yw]Analysis-by-Parts[/url]. This method allows you to impact the spending pattern for goods and services separately from the labor component so that you have more control over the analysis. You will want to start in your construction Model for this example we will call this model "RRC" for railroad construction. In model RRC, you will perform the Analysis-by-Parts analysis. For the spending pattern component you will want to import the Industry Spending Pattern through the Activity Options>Import> Industry Spending Pattern pathway. Once you have the imported spending pattern you can remove the purchase of steel from it by clicking in the far left-hand box along the Event line (Sector 3179, 3170,3171 are all steel producing Sectors. We apologize but we are not completely sure exactly what type of steel is used for RxR construction, but the Help>Sector Search with a keyword of steel will provide you a list of the different types of steel production that are provided by each Sector, if you want to only remove the commodity that most closely reflects the steel purchased in state 'S' (most likely 3170 or 3179). To assist you with this you can click on the Industry Code column header to sort the search by Industry Code). When the selected Event is highlighted in blue. The Delete Event button will appear in the upper portion of the Event screen. You can use this to delete the Event(s) that you want to remove. This is necessary, because if you use a standard Industry Change Activity without doing this, you will still be making purchases of local steel products (when local production is available, and will thus even though you will be reducing the total expenditure value you won't be removing what you are intending to remove. Once you have removed the Events in from the Sector 36 Industry Spending Pattern in the RRC model you will want to normalize the Events. This forces them to sum to 1.00, so that you will spend all of the 15% of good and services in the spending pattern (which does not mean that all 15% will be purchased locally). To normalize, you will go to Events Options> Change All> Normalize Events. Once you have done this you can click the Edit Activity button and enter in the 15% value in as the Activity Level. This portion of the analysis in RRC will look at the goods and commodity expenditures, but will not look at the labor component. If you know that all your payroll goes to workers in the state of RRC, then you can enter the full value of that payment into a Labor Income Change Activity. Most likely your workers will be payroll workers rather than sole proprietors or partnerships, so you can enter you entire value in the Employee Compensation Sector (5001). Please note that Employee Compensation is a fully loaded payroll value, so you will want to ensure that your entered value includes payroll taxes and benefits. If your value does not include this, please let us know. You can then combine both these Activities into a single Scenario which will yield both Indirect and Induced results for the state RRC. Your Direct impact can be added to these results and should include the full investment amount for the Direct Output (the entire cost of the construction including goods and services, payroll, profits, and taxes). If you want to determine a Direct Value Added figure you would subtract the full cost of goods and services (including the steel) from the Total Direct Output and the result would be Value Added. Often though we recommend describing results for these types of analyses by storyboarding them. Describing what the total investment costs, Employment and income were and then the additional business to business purchases and labor spending that were generated in the region. In regards to state model S, you would want to use the appropriate Sector for steel production for modeling these impacts. This again would be one of three Sectors 170, 171 and/or 179 based on what you determined/removed from the Industry Spending Pattern in Model RRC. You could then apply the $50MM of steel to the appropriate Sector to see how this sales impacts state S. However, your post seems to indicate that you also want to see any potential feedback effects from the steel production in state S to state RRC. You can do this by setting up an [url=http://implan.com/index.php?option=com_content&view=article&id=832%3Amulti-regional-analysis-wiki&catid=222%3AKB5&Itemid=166]Multi-Regional Input-Output Analysis[/url]. If you are only interested in seeing the feedback loops from steel production in S on RRC, you can perform the analysis with just the two Models you have already built. Before running a Scenario in Model S you will want to link it to Model RRC. To do this you will need to turn on the MRIO functions, if they are not already available. This is done through the File>User Preferences menu. Once you have opened the User Preferences window, you will want to choose the Analysis tab. On the Analysis tab you will select Advanced Modeling, if it is not already checked, and then check the Enable Multi-Regional Analysis check box. This will activate the MRIO functions in both the Scenario screen. In the Analyze Scenario screen you will see a lower portion of the box that will allow to click into a check box to turn on the function for that Scenario, and then to import another region. You will want to import Model RRC. You can then select you steel Activity and the RRC Model and Analyze for Multi Region. The results will show you both the impacts to Model S (displayed when you first open the Results window) and the resultant Indirect and Induced results that occur in the RRC Model as a result of the purchase of steel in state S. We've loaded you up with quite a lot of information here, so please feel free to let us know if you have any additional questions or concerns. --Implan Support Staff