Local spending

Hi Donna, If you go to Customize > Trade Flows > Trade Model tab, the "Local Use of Local Supply" column will show you the value of local supply of each commodity that is used by locals. "Local Use Ratio" divides this value by "Local Net Commodity Supply", which is total local supply minus local supply going to foreign demanders. Note that "Local Use of Local Supply" does not distinguish between final consumption by households or demand for intermediate use by other businesses.

Jenny - that column came up all zeroes for the zip code level data. I would like to run it by county but I can't remember how to get to the county level in the data file?

There seems to be something wrong with that report - my zip-code model also yeilded all zeros. Fortunately, you can get the same information in Explore > Social Accounts > Social Account Reports tab > View By: Commodity Summary. The Average RSC represents the proportion of local supply of a commodity that goes to meet local demands. Regarding getting to the county level: If you already have the county model built, you can open it using the "Open Model" link in the left-hand side menu. If you have not built a county-level model yet, click the "New Model" link in the left-hand side menu. Give the model a name, then click on "Change Data Folder" and scroll to the year and state of interest.

Thanks Jenny for info on the RSC. When I go to new model>data folder> and the county (Montezuma,CO) it only provides a list of the different zip codes, but not an overall county folder. Any other suggestions? Does it reside in a different drive or subfolder?

Yes - the county files reside in a different folder than the zip files. Try this path: Implan Data Files > 2009 > CO.

Thank you - found it outside of the folder, copied it into the folder and then it became available. I hate to be a pest, but I am really trying to learn how to use Implan effectively. If I wanted to look at a commodity, such as private hospital services (3397)how could I show the supply chain to identify which goods and services are already being provided locally, and which ones are being imported? The purpose of this is to identify potential opportunities for businesses.

To see which local industries and institutions are purchasing commodity 3397, go to Customize > Trade Flows > Industry/Institution RPC tab and select commodity 3397 from the scroll-down menu at the top of the screen. The tables will show all the local industries and households who purchase that commodity and how much they spent on it during the year, as well as how much of those purchases were made locally. If you want to see what the hospital sector purchases and how much of the purchases come from local suppliers, you could import the Industry Spending Pattern for sector: Activity Options > Import > Industry Spending Pattern. The Coefficients show all the goods and services (Intermediate Expenditures) made by the hospital sector for each dollar's worth of private hospital output. The Local Purchase Percentages show the proportion of those purchases that are made from local suppliers.

Jenny -I am trying to define some terms so that I can explain what the analysis means. If you could open up the attached spreadsheet you can see that I have made comments/definitions for each column header. Are any of them totally off the mark? Some general questions are: What is the difference between total commodity supply and net commodity supply? I notice that in many industry categories they are the same? What is the difference between Gross commodity demand and local commodity demand? I notice that in many industry categories they are the same. Does "total imports" refer to the goods and services coming from outside the local (zip code) area to produce the commodity? What does "RSC" stand for in local use ratio? And finally - when looking at industry spending patterns if there is a high coefficient and low % local purchases can this be an indicator of opportunity?

The spreadsheet looks good. However, the statement "A high average RPC indicates that local needs are being met, a low average RPC indicates that local needs are not being met" is not quite accurate. The local needs are being met, just not by totally by local suppliers. 1-RPC shows the import rate. Total Commodity Supply is total local produciton of the commodity. Net Commodity Supply is Total Commodity Supply less local supply going to foreign demanders. The difference - Foreign Exports of the commodity - can be found in the Social Accounts Reports tab by choosing View By: Commodity Trade. Gross Commodity Demand = total demand for the commodity by each local industry/institution Local Commodity Demand = RPC*(Total Gross Commodity Demand) = demand for the commodity by each local industry/institution that is supplied locally = Local Use of Local Supply Total Imports does not refer to imports of the goods and services required to produce the commodity, but rather to imports of the commodity itself (foreign and domestic). RSC = Regional Supply Coefficient Yes.

Thanks - you are a goddess!

Jenny - We are still trying develop a method to discern opportunities for business expansion or new business development using Implan? Our communities are all small and rural (and in today's economy - struggling). As you may recall, I put together a spreadsheet for Mancos, CO looking at industry spending patterns by RSC, i.e. if there is a high coefficient and low % local purchases can this be an indicator of opportunity? The problem is where to set the threshold? I think I need more help with this? Is there someone in your Implan group that specializes in this type of analysis that we could hire to help set up a sort of template or procedure that we could use for each community? Or is this something that can be pursued through this forum? Can you point me towards any articles that deal with this issue?

Hi Donna, For a good start on finding a threshold, I would rank all the existing sectors according to your opportunity indicator: RSC/RPC and look for some sort of natural cut-off point. Or just focus on the top 10 or 10% (or however many you think is appropriate). Then you could run some scenarios where the output of those industries increased after increasing the RPC for their main commodity. Unfortunately, the RPC edits would have to be done prior to impact set-up and the multipliers re-constructed, so a template for batch runs wouldn't be feasible for this approach. My colleague Doug suggests comparing Demand/Supply ratios as an alternative measure of opportunity. If demand for something is very high relative to supply, then there is an opportunity to fill that demand locally - subject to local resource availability, of course. Most businesses consider a range of factors when deciding where to locate a new office/factory/etc, some of which may be based on demographics (e.g., population, employment rate, education levels) or resources (e.g., proximity to water sources, transportation hubs), and few of which IMPLAN has data for. So a simple threshold for the Demand/Supply ratio is likely insufficient but is not a bad place to start. Again, you could rank commodities by this ratio and look at the top however many. Finally, a sector's multiplier is an indicator of its inter-connectedness to the local economy, with differences between sectors reflecting differences in how much of each sector's inputs are purchased from within the study area, how many of its employees live in the study area, and how much is spent on inputs and labor vs. going to taxes amd profits. These can be considered in conjunction with the above measures. Anyone else on the forum is more than welcome to chime in!

Jenny - I have implemented those suggestions to the table but still do not have very satisfactory results (see attached). My boss, Joe Keck, emailed "Donna, could you check with Jenny on having her do a short case study project using Mancos or Cortez which applies the methods she has described so that we could better under the process and how this might look. You could ask her how much this might cost for her to do. I'm really interested in what the top 10 business development opportunities there are in the Mancos trade area. These could be retail, service manufacturing, etc. Joe" Are you interested?

Hi Donna - we do have project consultation services. I want to give this some thought however first. We also have a customer in a state agency that has developed a tool to do this type of analysis. I am contacting him to see where they are at with it. I'll get back to you later today or tomorrow. Scott

What is the Mancos trade area? I am looking at Montezuma county.

Hi Scott - Mancos is a small town in Montezuma County - zip code 81328. We are hoping to develop a "process" that we can use for all of our communities here in SW Colorado. I realize that these rural communities present a challenge, especially since (if I understand correctly) that trade flows are not really addressed at the zip code level in Implan. I guess that if we cannot develop a way to use the zip code data effectively we will only purchase the county level data for our 5 county area here in SW Colorado. Is the 2010 data available now?

The 2010 data was just released today. It takes a day or two to get the downloads all available. I spent some time looking at Montezuma county. You really need to be looking at this from a regional standpoint and not individual communities. Even with the single county, much less a Zip Code region, I really didn't see much in the way of opportunities for an import substitution strategy that I think you are looking for. The trade flows data will give you a better estimate of local demand for goods and services as well. You are on the right track by using the Commodity Summary report to look at commodity supply and demand. If you are interested, you could set up a project consultation to talk about this in person. What are the five counties? I can take a look at those and give you some feedback on that area as a whole.

Thanks Scott. I would like to set up a project consultation at your earliest convenience, and would like to have my boss Joe Keck in on it too. He is the Director of the Small Business Development Center at Fort Lewis College and knows how to ask the hard questions. The counties in our area are Archuleta, Dolores, La Plata, Montezuma and San Juan Counties. We might also need to include San Juan County New Mexico as it is significant in our trade area. If you would like to set something up over the phone my number is 970-385-4897.

I'm working on a similar issue. I'm trying to evaluate how an increase in spending on locally grown food will impact our economy (in a 3 county area). But I don't know how to deal with the supply constraint. For example, according to IMPLAN, we have no grain production. The growing of grain is returning to our area (and will hopefully be measurable at some point in the future). I can't change the amount of supply. For other commodities (e.g. fruit), are close to 100% of local supply purchased locally. Is there a way to increase supply? Or, is there an easier way to measure the impact on employment and income and I'm just overlooking it? Thanks!

Give me tomorrow to look at your region and we can set up the call for Wednesday. I am available from 10 to 3 CDT. The way it works is that you call us at 651-439-4421 to set it up or email info@implan.com. You can tell them I already

Anita, You can simulate increased grain production in your region by first making the sector exist - see this forum discussion: http://implan.com/v4/index.php?option=com_kunena&func=view&catid=80&id=10939&Itemid=35)

Jenny - I think you posted this to me by mistake.

Thanks Donna, Anita had joined in on the conversation :)