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Type I vs. SAM in industry 62

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akicza
Hi There, I work for a public pension system in Oregon and we are trying to demonstrate how the pension dollars we pay to retirees impact the state economy. We use the Total Output (Dollars) of the Household Industry to demonstrate this and the Employment and Earnings multipliers of the same industry to show job and wage creation. When I ordered the 2012 I-RIMS data it gave me two data sets, Type I and SAM, but the Type I did not have multipliers for the Household industry, can you explain why that is? I read the article I found on the difference between SAM and Type I, but it was way over my head. Is there a simpler explanation that doesn't include terms such as 'Leontief inverse' and 'direct coefficients matrix'? As a result I attempted to apply the SAM multipliers to my methodology, but I noticed the SAM numbers are significantly lower than the numbers I had been receiving from BEA over the last ten years or so. Are the SAM Multiplier numbers for the household industry accurate for my purposes? Is there a better number I should be using? Shouldn't the IMPLAN multipliers be comparable to the BEA RIMS II Multipliers? If so, why is it significantly lower in this instance? Thanks for your help.
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    IMPLAN Support
    Hi and Thank you for your post! The Type I Multiplier Direct effects contribute to the majority of the Labor Income expenditures and the largest component of the Induced, and Indirect effects actually do lead to some small Induced effects, but the nature of the Type I Multipliers just simply doesn't take them into account. However the reason you are seeing a value for the Type SAM Multiplier is because Type SAM includes not only the Direct and Indirect Effects but also the Induced effects. The specific equation is: (Direct Effect + Indirect Effect + Inducted Effect)/ (Direct Effect). Households drive the Induced Effect with purchases that they make with their Labor Income dollars. I apologize for the complexity of the documentation and really appreciate your feedback. If you do not mind, could you provide us with the link so that we might be able to edit the documentation. Here are some of the differences between I-RIMS and RIMS II Multipliers: 1.RIMS II uses a single household type for induced personal consumption while IMPLAN uses 9 household types. 2.RIMS II maintains the national ratio of Value-Added to Intermediate Outlay regardless of the study IMPLAN adjusts the national coefficients to reflect state- and county-level value-added data. 3.RIMS II uses location quotients to regionalize the national technical coefficients, at which underestimates inter-regional trade and overestimates regional multipliers when cross-hauling is present. IMPLAN uses trade flows based on a gravity model. 4. Also our numbers are typically lower because we extract savings from the Multipliers which BEA does not. Please let us know if this does not address your question. Thanks!
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