Use of value added in value chain analysis

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tcole

• November 10, 2008 22:26

I am trying to determine if it is possible to construct a value added distribution according to unique value chains using IMPLAN data. In other words, how can I get IMPLAN to tell me the proportion of value added within a supply chain? I suppose there are two parts to my question: First, how do I find the value added shares within a supplier chain? Second, acording to IMPLAN, does an industry's value added ratio change when the indusrty is present in two different supply chains, or is the value added ratio constant for industry X, where the amount of value added changes only with the amount it trades within a supply chain? Many thanks, Tim

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  DougO

  • November 10, 2008 23:30

  Value added is a constant proportion of an industry's output, no matter who the output is sold to (in Input-outpu modeling). From IMPLAN you would need: 1) Production function of industry of interest (available in the industry balance sheet report under Social Accounts reports). 2) Total output of industry of interest (to be applied to the regional absorption coefficients in the above report). 3) Value added to output ratios derived from the Employment, value added, output report (in Study Area reports). Note: this won't be precise as the production function is on a commodity basis and the value added to output ratios are on an industry basis. You would have to run the production function through the market share matrix to convert to an industry basis to be precise.

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