Ethanol Plant Sector and RPC

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    jenny
    Sector 126 appears to be appropriate. If you know that this industry uses corn as its only source feestock, then you could adjust the production function for this sector so that grains (commodity 3002) is the only agricultural input. In this case, you would go to Customize > Industry Production and scroll down to sector 126, add the other ag commodities' coefficients to commodity 3002's coefficient, then zero-out the coefficients of the other ag commodities. Be sure there are checkmarks beside all your changes, then click Balance and Save. You will need to reconstruct your multipliers (Options > Construct > Multipliers) before running any impacts. Zeroing out RPCs in order to avoid over-estimating impacts is often done in the context of a contribution analysis, which it sounds like you are trying to do (as opposed to an impact analysis). However, it is usually the RPC for the directly-impacted sector (sector 126 in this case) that is zeroed out - not that of its input suppliers. I wonder if the other analysis you are comparing to had already done a separate analysis on corn production? In this case, they would be correct to zero-out the RPC for corn. This forum discussion may be helpful: http://implan.com/v4/index.php?option=com_kunena&func=view&catid=84&id=10897&Itemid=35#10902
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    UMO Colombia
    When using sector 126 to evaluate Missouri's ethanol industry, the results lack any information concerning the impacts from grain farming(sector 2) as if this industry is not relevant to ethanol production. Ethanol production uses corn grain as a major input and corn is approximately 70% of the cost of ethonal production. I'm concerned that if one uses sector 126 under the assumption that the corn grain sector is not relevant; results will not be truly respresentative of the ethanol industry and perhaps another sector will be more appropriate. Could you please provide an explaination as to why sector 126 does not take into account the effects of grain farming and why it's appropriate for ethanol production?
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    jenny
    Ethanol production falls under NAICS sector 325193 (click here for the NAICS sector search page: http://www.census.gov/cgi-bin/sssd/naics/naicsrch?code=325193&search=2007). NAICS code 325193 falls under IMPLAN sector 126, but so do the following NAICS codes: 325191 Gum and Wood Chemical Manufacturing 325192 Cyclic Crude and Intermediate Manufacturing 325199 All Other Basic Organic Chemical Manufacturing So yes - IMPLAN sector 126 encompasses ethanol production, but it also encompasses some other, related activity. Since you know that this is an ethanol plant, you are encouraged to edit the production function for sector 126 to reflect a greater proportional purchase from the grain farming sector: go to Customize > Industry Production, then scroll down to sector 126. Edit the coefficient to whatever you feel is appropriate then click Balance and Save. This will decrease the proportionate purchase of all the other goods and services to adjust to the higher grain purchase. At this point you will need to reconstruct the multipliers (Options > Construct > Multipliers). If you can get some information from the plant regarding their relative expenditures on corn, that would provide some guidance for your edits. Please note that the coefficients in the production function represent the amount spent on a commodity per dollar's worth of output.
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