Manufacturing Facility Operations

Hi Forum! I am checking in on my below post. If you need additional information or clarification, please let me know. Thanks, Jocelyn

Hi Jocelyn, I agree with using the spending pattern, this will provide a more complete picture of the Intermediate Expenditures than allowing you to edit the RPC's as you see fit. Equipment for the most part is not and should not be part of the spending pattern's annually reoccurring expenditures. So these should be modeled separately as you describe in option 2. There are caveats of equipment purchases:http://implan.com/index.php?option=com_content&view=article&layout=edit&id=468 In regards to Employment, how will you estimate that they will meet their Employment needs if the county cannot provide sufficient employees to fill the jobs. I recommend the following 4 scenarios for modelling here: 1. If you feel that the jobs will actually draw people to the county as permanent residents, then the Labor Income Change would be run at the full value of the Labor Income payments. 2. If you feel that workers will come from neighboring counties, then they would want to leak a certain percentage of the income (and MRIO with the counties you are anticipating to share workers with might be a recommended methodology to "recapture" some of the Labor Income impacts. 3. If workers will come into the region as migrants then this is typically best handled like per diem payments. 4. If a mix arises then probably it is best to split the Labor Income in proportion per category. Thanks

Thanks for your response. I have a couple of follow up questions: 1. Is it ever appropriate to run the IMPLAN model with one county as the study area? Often our audience is just a county so it is important to quantify effects in that local area. For example, if we are considering 50 new employees in a new law firm in a county, can we enter those 50 employees into the county model under an industry change for the legal services sector? Or would we need to consider what portion of the 50 employees reside in that county? 2. Can you clarify your #2? Please note, one thing I didn't mention in my original message is that I was going to run the analysis in the county model and do a multi-regional analysis in the rest of the state. Does your #2 mean that we would need to a) enter the labor income for workers expected to live in the county into the county model; b) run the associated multi-regional analysis to show induced effects of that labor income on the rest of the state; c) run a separate model where we enter the direct labor income (for workers expected to live outside of the county) into the state model; and d) for the state, sum the results from steps b and c. Are we thinking about this correctly? 3. When we interpret the results, the direct labor income change would be our data on labor income (since the model results show only induced effects from a labor income change). please confirm. Thanks in advance for your assistance!

1. Yes, There are times when it is appropriate to just have one county as the study area data. The limitation with using just one county though is not all of your workers and production happen in that county. As a result, you will have Labor and Production that will not be accounted for, that will be leaked out. For your example, you can enter into the Law Firm Sector, 50 for Employment. You will NOT need to adjust your employment figure since by definition Employment is at the site of the employer and it also is not an economic driver for the Model. The Employment Compensation and Proprietor Income fields however are. IMPLAN will make a net assumption of the portion that will be leaked income that is leaked out of the county; however, if you have the ability to determine the actual value of an estimated percentage of the value of leaked income you would want to reduce the estimated value of Employment Compensation entered into the Employment Compensation field. The following article describes how to reduce the value of compensation based on the net amount removed by the Model, so that you don't remove more income than you should. It is important to note that when you report your results you want to use the unadjusted Labor Income value. http://implan.com/index.php?option=com_content&view=category&id=329&Itemid=1588 2. Ideally rather than the ROS you would have an idea of the neighboring counties that received that income and you could apply the income leaked from your region for in-commuting employees to the regions where they live and link to the target county that contains the business as well as the ROS to see how those additional Labor Income impacts affect those regions. Technically since we have taken the full credit for the Labor Income values in the target county your impacts here would just be the Induced Effects. Please note that to do this you would need multiple sets of Models. The first where you link your target county to the ROS and/or other counties of known income spending and a second set to link the first income region to the ROS and target county, and a third set to link the second income only county to the ROS and target county etc... if you are interested in pursuing this and have the data to produce the county income impacts we can point you to our batch modeling processes to help you build and manage the Model sets. 3. The Direct Factor Change in the results screen should be equivalent to the value of Employment Compensation and Proprietor Income (Labor Income) used to generate the impacts. This is your Direct value for Labor Income as you suggest. Thanks!

I have a quick follow up question to your response. For number 1, you mentioned that I would not need to adjust the employment figure. Similarly, if I know an estimate for employee compensation at the law firm, can I enter that number in the Law Firm sector and will the model make a net assumption of a portion that will be leaked out of the county? Thanks again for your assistance!

Hi. You are exactly correct. If you have a value for Employee Compensation, we recommend customizing the Event Field with your information. IMPLAN will then leak out the Employee Compensation that is not in your Study Area. However it is a regional not an Industry or firm net, so if you know the amount that is leaked or have an estimation you can use the article here: https://implan.com/index.php?option=com_content&view=article&id=737:estimating-employment-compensation-reduction-for-commuters&catid=278:commuting-and-labor-income&Itemid=110 to adjust your value. Or even if you just want to see what the net value is. It is important to note that if a region has net outcommuting, then no value will be leaked from compensation. Thanks!

Hi again, Your response was in reference to an industry change activity type. Can you please confirm that the same is true for a labor income change activity (i.e., that if I enter employee compensation into a Labor Income Change Activity Type, the IMPLAN model will make an assumption that a portion will be leaked from the study area? Thank you and happy holidays.

Hi Jocelyn, That is accurate. Even when doing a Labor Income Change-Activity Type; the Employee Compensation value entered into the model will be adjusted for leakage. Thanks!