Type I Multiplier for Aggregated Industries

Our agency performs economic development work statewide and has a scope that covers most NAICS-2 industry sectors. For reporting purposes, we would like to find the average number of indirect and induced jobs "saved or created" for every direct job "saved or created" for industries within our agency's scope. I believe that this is essentially the same as estimating an aggregate Type I multiplier for most of the NAICS-2 industries in the state. I estimated this quantity using IMPLAN 2.0. I started with the NAICS-2 aggregation scheme and re-aggregated it so that the economy would consist of three industries. These were a super-industry representing our agency's scope and two other NAICS-2 industries that our agency does not cover. I then simulated a $10 million impact on the super industry only, on an industry basis, for the year 2009 and with 100% local purchasing. My result indicates that the average direct job in the state supports 0.4 indirect jobs and 1.4 induced jobs in our state, for a total of 1.8 non-direct jobs per direct job. Therefore each direct job "saved or created" in the state also "saves or creates" 1.8 additional jobs within the state, on average. Is this approach sound? Is my interpretation of the IMPLAN result appropriate?
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  • The Type I multiplier would not include the induced jobs. The interpretation is correct. However, I hate aggregating a model. You can reduce the aggregation bias by only aggregating the 2-digit NAICs code to which you are applying an impact. You can aggregate the impact results later if you need to.
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  • Thanks. I stand corrected on the Type I multipliers.
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