Relationship of money spent to direct output

Hi Kara, Is this the forum discussion you are referring to? http://implan.com/v4/index.php?option=com_kunena&func=view&catid=84&id=6298&Itemid=35#6298 Leakage to imports is the most likely cause, as some reports in V2 included imports in the direct effect, while in V3 they are not included in the direct effect (rather, they show up in teh LPP Imports box). Also, if you are running this on a commodity basis, some of the purchases may come from institutions (these purchases show up in the Direct Institution Change box and are also treated as a leakage). If you could zip up the models and send them to support@implan.com we'd be happy to take a look at them.

Thanks, Jenny. That's definitely one of the related posts I made on this subject! I'll zip several year's models and send them. I appreciate it!

Truly, the direct impact is the local producer value. Remember, even if I purchase a t.v. from a local retailer, that t.v. was not likely to have been produced locally - so the retail margin is local but the production value (producer price) is not. In both V2 and V3, only the local portion of the spending (the true direct effect) is applied to the multipliers. However, V2 misleadingly reported the entire spending figure as the "direct" effect, while V3 more accurately reports just the local spending as the direct effect. In V3 imports are reported in the LPP Imports box and purchases from institutions are reported in the Direct Institution Change box. In either version of the software, only the local portion of the direct was applied to the multipliers - it is simply that the reports in V2 showed the entire expenditure amount as being "direct". You will notice in your V2 impact results (found by clicking on Results form the Impact Main Screen) that there are "direct" impacts to institutions 11001, 12001, 12003, 14001, 14002, 25001, and 28001, all of which are leakages and should not be included in the direct effect. The latter two of these are imports: institution 25001 represents Foreign Trade and institution 28001 represents Domestic Trade. You will notice in your V3 impact results that the sum of Direct Output + Direct Institution Change + LPP Imports very nearly matches your total expenditure amount (the small difference is due to the use of deflators in the imported grocery spending pattern and can be attributed to imports). You will also notice that only the output figures show direct institutional sales and import values - direct employment and income won't be affected by the reporting change between V2 and V3. We often recommend avoiding use of the terms "direct", "indirect", and "induced", instead telling a story along the lines of: "Visitors spend $X locally. This $X worth of local spending supports $Y in sectors that serve tourism (mostly retail and service sectors), $Z in sectors supplying those sectors, and $W in sectors where employees spend their income." As a side note, we noticed that you seem to have two retail gas events in the 2010 model - one that appears when you margined sector 115 and another when you included sector 326 in your "Retail" Activity. We just wanted to check that you weren't double-counting those expenditures.

Thank you so much for taking a look at the models. You're explanation makes a lot of sense and is a big help in explaining the differences to people who use our numbers. You're suggestion for presenting the impacts is helpful, as well. People really do have a hard time understanding the difference between spending by visitors and output. Explaining it the way you suggest would make it clearer to them! Oh, by the way, I didn't use both gas related sectors,just had them both in there until I figured out which was more appropriate to use! Thank you!

Jenny, I have a follow-up question along these same lines, but in regards to employment numbers. Our constituents are now curious about the trend in our employment figures. 2002 2003 2004 2005 2006 2007 2008 2009 2010 direct employment 28,600 27,640 29,250 34,520 36,500 33,200 23,329 19,160 24,640 combined employment 41,900 36,990 39,150 45,940 48,580 44,830 31,158 25,480 34,210 They're having a hard time swallowing the large fluctuation in the number of jobs. Can you provide any insight or give me some advice as to how to investigate? Thanks!!! Kara

Hi Kara, One thing to note is that the employment multiplier (total employment/direct employment) stayed fairly constant over the period, so the differences in combined employment appear to be mainly due to the differences in the direct employment. Here are a few considerations: V2 doesn’t prompt you to apply margins to the retail sectors, while V3 does – is it possible that you were using V2 in earlier years and perhaps forgot to margin? Were the expenditure amounts and patterns the same in each year? Do the Output and Labor Income results also vary in the same pattern? I would recommend starting by comparing the detail results for the years 2007 and 2008, since that is where you are seeing the largest percentage change in direct employment.

Thanks, Jenny. I've answered your questions below: V2 doesn’t prompt you to apply margins to the retail sectors, while V3 does – is it possible that you were using V2 in earlier years and perhaps forgot to margin? The model we were using in V2 contained lots of groups with lots of events. I just browsed quickly through one of the old files, and all of the retail related groups do seem to be margined, and LPP is not 100%. With that said, I'm pretty sure the LPP was not what the software would have set it to, but was, instead, set by someone here in the past who first developed the model. Were the expenditure amounts and patterns the same in each year? No, for some years we were using the same expenditure patterns, adjusted for inflation from year to year. We then collected new data and used those spending patterns for a few years. 2009 and 2010 reflect data collected each year (we now collect spending data all the time, rather than once every 5 years or so). Do the Output and Labor Income results also vary in the same pattern? The patterns for spending, direct output, labor income (EC and PI) and employment, at least to my eyes, don't seem to follow quite the same pattern over the years: Percent change from previous year: 2003 2004 2005 2006 2007 2008 2009 2010 Nonresident Travel Spending4% 4% 41% 6% 6% -12% -17% 8% Direct Impact 7% 5% 35% 9% 4% -38% -16% 27% EC + PI -10% 4% 25% 14% -3% -25% -17% 38% I will take a look at the detailed reports. I'm thinking I might need to go back and redo some of these models to make them more comparable to one another. Is it still true that V3 can go back as far as 2007?

So, Jenny, my boss is wondering if you've seen anything like this with other users who produce annual estimates (sudden "unexplained" drops -or increases for that matter- in employment). Would you happen to have any suggestions for how to explain something like this to people? Thanks very much.

Hi Kara, You bring up a good point with the LPP - even if the LPP was always set to the SAM Model Value, this value will differ across years, particularly if your V3 models used the Trade Flow Model method (since this method was not available in V2). While not a perfect match, you can see that there is definitely some correlation between the % change in spending and the % change in direct employment. It is likely a combination of this, LPP, and spending pattern. 2003 2004 2005 2006 2007 2008 2009 2010 Change in Travel Spending 4% 4% 41% 6% 6% -12% -17% 8% Change in Direct Employment -3% 6% 18% 6% -9% -30% -18% 29% Yes, 2007 data will work with V3. In fact, you can go all the way back to 1996 data with V3. The sectoring schemes will differ, of course.

That's good to know we can go back even farther with V3. Does that mean that I can use our 2003 and 2006 state data in V3 by just saving those files to the V3 appliance? That would be great. Then we'll be much closer to comparing years on an equal basis....which should make some people happy. Thanks, Jenny, Kara

Hi Kara, You can move the older data files to your V3 appliance or, if you prefer, you can leave them where they are and simply point your V3 appliance to that folder when creating the new V3 version of those models. Depending on when you received your V3 appliance, it may or may not have the necessary structural matrices for all those years. You can find out by navigating to the "Implan System Data" folder on your appliance. If you don't see an IMPLANStructuralMatricesYYYY.mdb file for all the years you're interested in, you can call technical support at 651-439-4421 and they'll get them to you.

I've got two files 07wstrct.exe and 06wstrct.exe that I was trying to copy from Implan 2 to my Implan 3 appliance. When I double clicked and hit run, I get a message that the setup file will not run due to incompatibility with 64-bit versions of Windows. I do have a 64 bit machine, and have to run Version 2 in Windows XP virtual mode. So, please tell me there might still be a way to be able to install and use 2006 and 2007 data on the version 3 appliance! If not, would it work to run V3 in virtual XP mode? Hmmmm...

The multipliers give the impacts in terms of output. The output per worker converts the output impacts to employment impacts. I would create a spreadsheet comparing the years as follows: Direct Output impacts by sector by year Total Output impacts by sector by year Output per worker by sector by year Direct employment impacts by sector by year Total employment impacts by sector by year Where outputs differ year to year by sector you would expect employment to differ Where outputs are similar year to year and employment differs by a significant number then it may be possible to figure out the cause of the difference. In the end it may be a matter of difference in tourism spending or price indeces. Or it may be a real problems such margins being applied in some years and not others or a big change in output per worker.

Oops, my last answer makes no sense for the most recent question, I was looking at page one, not page 2. The V2 structural matrices will not work with V3. To get the earlier structural matrices download this file: http://implan.com/V4/index.php?option=com_docman&task=doc_download&gid=207&Itemid=7 It is a zip of 1996 to 2006 structural matrices for version 3. I don't see 2007 on the download page: http://implan.com/V4/index.php?option=com_docman&task=cat_view&gid=160&Itemid=7 I will get Ambrose to put it up.

Ambrose tells me that 2007 structural matrices have been loaded on all appliances since day 1. Also, if you try to create a model in version 3 for a year that the appliance has no structural matrices, the software will try to automatically download and install the matrices. He will have the V3 2007 matrices up on the download page in a couple of minutes any way.

Thanks. Do you have any info about how to get the data on my V3 appliance? My computer is a 64 bit machine, so I have to run V2 in Virtual XP mode. I haven't had luck getting the .exe file to run to get the 2007 data on my appliance. I found the old e-mail with the link to download the data, but of course it's so old the link just takes me to the MIG home page instead of the data download...

okay, I figured out how to get the virtual machine to recognize my IMPLAN 3 appliance. I saved the self-extractor module, 07wstrct,to the V3 appliance 2007 data folder. I went into the folder, double clicked the file and clicked Run. Now I'm trying to create a model in V3, but when I go to the 2007 MT folder, the data isn't there. Is the 07wstrct file just the structural matrices? If so, where in V2 should i go to find the data file? What extension should I be looking for--.odf? Or, is it possible to verify on your end the data we've purchased and send me new links I could download to the V3 appliance? Thank you, Kara

Yes, they are only structural matrices. The default location for the odf files (which are usable in both v2 and v3) is c:\program files\implan 2.0 (or something like this)\Data -there may be further subdirectories depending on how it was installed. If you are looking at a data CD, there should be a "Data" subdirectory.

okay, the odf files are not there. I have a sneaking suspicion that when I got my new computer, those files didn't get transfered to the new machine. I probably just reinstalled V2 and didn't think to tell the IT people that I needed all those files - doh! So, is there a way to get those files from you guys again? I know I have the email from the 2007 data purchase, and may be able to find the email from the 2006 purchase. I've got a disc with the 2003 data, so we should be ok there. Thanks!

Call the guys downstairs (651-439-4421) - if you have the order number they can hook you up fairly quickly. They should be able to look you up as well if you don't have the original order number.