When to set LPP to 100% and when not

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jwiener

• April 21, 2011 01:23

We are modeling impacts across multiple industries that we know have occurred. We do not know anything about how each firm’s supply chain is structured. These activities are associated with expanding or creating long-term (year after year) activities. Would you recommend modeling using an LPP of 100% or using the SAM model value for each of the 59 activities we are measuring? Thanks

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  jenny

  • April 21, 2011 01:48

  Hi Jared, As long as those 59 activities occurred in your study area, you will want to leave LPP = 100%. Leaving LPP = 100% just means that the 100% of the initial impact occurred locally – it does not mean that the directly-impacted sectors purchased all of their inputs locally. The multipliers already have built into them where the sectors buy their inputs needed to meet that direct demand - this is captured in the Regional Purchase Coefficients (RPCs). RPCs are unique to each commodity and region, and represent the proportion of local demand for a commodity that is supplied locally.

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