Sectors 439 and 440 - payroll versus sales
My two questions regard how Implan V3 treats employee compensation versus sales in the two federal government sectors 439 and 440. I had thought that since these sectors are listed as being payroll only, employee compensation would equal industry sales. With some experimentation, I find that industry sales is less than employee compensation. First, is this due to export of some government services? And does it affect the results in this sector whether an event is entered as a change in compensation versus a change in industry sales?
Second, when I change the model year further into the future, the compensation and sales diverge wildly. As an example, in one model I am using, with 2008 Implan data, industry sales for sector 440 is about 99% of employee compensation for events in 2011 but drops to only about 65% of the employee compensation figure for events in 2015. Is this caused only by unreliable future deflators or is something else occurring?
Thanks!
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The sectors actually hold all factor income (ie, the government institution's contribution to Gross Domestic Income). That includes a capital consumption allowance - a item that is relatively useless for impact analysis, but necessary for a complete set of social accounts. If you wish to use those sectors for analysis, it is fairly easy to customize to remove that piece by zeroing out "other property income" and setting output equal to employee compensation (under Customize>Study Area Data and choosing those sectors). -
Regarding your second question: Because output prices can change at different rates than wages, different deflators are applied to Industry Sales and Employee Compensation. The Output Deflator is applied to Industry Sales, while the GDP Deflator is applied to Employee Compensation and Proprietor Income. The Output Deflators are specific to the industry/commodity, while the same GDP deflator applies to all sectors. -
Thank you for both answers. A possibly related question, with deflators. I have been running a model using 2008 Implan data that considers impacts occurring in 2015. If I enter the direct event in 2015 dollars (by taking my 2011 information and inflating the dollar amount by the deflator in Implan - using the output deflator, but the issue is the same with the GDP deflator), and then look at the impact analysis results reported in 2011 dollars, I get different results than if I just enter the direct event as if it occurred in 2011 and look at the results in 2011 dollars. My understanding is that these two ways of calculating the 2015 events in 2011 dollars should yield identical results, since other than the deflators, the Implan model is static over time. In other words, the deflator Implan is using to deflate the 2015 impact results into 2011 dollars is not the same as the deflator that is listed when entering the event that Implan uses to deflate events occurring in year 2015. What am I missing here, please? Thank you! -
Even though the same deflators are used, changing the Dollar Year for View in the Scenario Results screen is not the same as changing the Event Year in the Analyze Scenarios screen. Changing the Dollar Year for View deflates the impact results, whereas changing the Event Year deflates the Direct Effect prior to running it through the multipliers. If your data are not in the same year as your IMPLAN model (which is true in your case), changing the Event Year is necessary - doing so ensures that the right dollar amounts are applied to the multipliers. Note that you need to set the Event Year before entering a value. You will want to enter the direct effect as your 2011 amount, set the Event Year to 2011, and run the impacts. You can then view the impact results in 2015 dollars if you'd like. -
Thank you for the response. I wasn't terribly clear in writing up my question, but I think you have given me the answer I need anyway. I should be able to achieve the same results as using the deflators in Implan by: manually deflating my 2011 dollars to 2008 dollars - using the same deflator figure for 2011 that Implan does - then setting the event year as 2008, the year of my data (so that no additional deflators are applied by Implan) - and then manually inflate the results from the analysis to 2015 dollars.
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