ANALYSIS FOR SELF-EMPLOYED EMPLOYEES

A couple of weeks ago, I posted this question for help: Dear Madam/Sir My name is Isaac Bonaparte, a graduate research assistant for Drs. Hyeonshic Shin and Sanjay Bapna of the Morgan State University. We are conducting a study entitled, "Measuring Economic Impacts of Freight Industry in Maryland Economy". The main objective of this study is to correctly capture freight transportation related economic activities in Maryland and estimate their contribution to Marylanders. We are duly authorized users of the IMPLAN software. I have a question regarding the use of the IMPLAN economic sector code for the employment statistics from the Census Bureau’s non-employer (self-employed persons) statistics. We assume that multiplier of self-employed persons would be different from employees captured in the county business patterns (CBP) that have been used by many economic impact studies. In this case, are there any specific IMPLAN sector codes to be used? I appreciate your advice. Your immediate response will be very much appreciated. Thank you. I RECEIVED THE FOLLOWING RESPONSE FROM SOMEONE: Hello Isaac, The sector that you will want to work with will depend on the type(s) of freight that you are interested in studying. The transport sectors are 332-337. You are correct that proprietors will have different economic impacts than wage and salary workers. IMPLAN Employment figures include wage and salary workers as well as proprietors, and when you set up an Industry Change Activity, you will see that there is both Employee Compensation (loaded payroll for wage and salary workers) and Proprietor Income. If your analysis only involves proprietors, you can customize the Event so that Employee Compensation is $0 and all labor income goes to the Proprietor Income field. If you are running a Labor Income Change as a part of an Analysis-By-Parts, you can specify whether the labor income is Employee Compensation or Proprietor Income. Regarding how we estimate our proprietor data, our primary source is the BEA’s REA data. Here are a couple of links on employment data that may be helpful in understanding how employment is estimated in IMPLAN: implan.com/V4/index.php?option=com_multi...34:634&Itemid=71 implan.com/V4/index.php?option=com_multi...89:589&Itemid=71 I THEN POSTED THIS QUESTION FOR HELP My analysis only involves only proprietors and I am able to set the Employee Compensation to Zero. However, the figures in the employee income is not added to the proprietors income. In addition, I get the following message" "You are changing employee compensation from its original value. Please note that these changes are only related to the induced effect. Do you want to set the event to custom? In addition, no matter how many employees I enter after customizing, the proprietors income remains the same. I THEN RECEIVED THE FOLLOWING RESPONSE: We are not exactly clear on what you are trying to do. Since proprietors are self-employed individuals, they are usually not an indefinite number of items (hence your statement on increasing employment). It sounds like you are starting with an industry sales value and editing out employee compensation. The warning you are getting is just to let you know that you are changing the underlying model relationships. Once you do this, you are in effect you are breaking the underlying mathematical relationships by which the model makes its estimations for the specific event. Therefore you will no longer be able to make any changes to any fields that will affect other fields. In effect, when you customize, you are telling the model you know more than it does and you have all the necessary figures. PLEASE WHAT DO I DO TO RESOLVE THE ISSUE?
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  • Hello Isaac, You didn't get back to us on our question regarding what you are trying to model, so we hoped our answer was clarified for you. When you break the relationships by customizing the Event, you are disconnecting all the underlying relationships. Therefore, once you have entered or modified more than one Event field you will need to modify any others that you want to change. If you feel that all the Employee Compensation should be shifted to Proprietor Income for your Activity, you will need to note the value of employment compensation before zeroing it out, add that to the Proprietor Income and overwrite the Proprietor Income to reflect the total Labor Income value. However, we again caution you to be sure that this describes your industry and that only self employed individuals/workers are in you industry. Likewise because the underlying relationships are broken, no amount of employment change will affect the Proprietor Income or Output. If you feel Labor Income should also decrease (i.e. employment compensation should not all become Proprietor Income) you would need to develop a relationships for how much compensation becomes Proprietor Income outside the Model. Please let us know if you have more questions, or if you could give us more information about what you are doing so that we may be able to provide a more specific response.

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