Indirect output in the same industry code

Hi Donovan, Our 2011 U.S. model is not showing that sector 23 makes any purchases of commodity 3023. Could you please confirm that you are seeing the same? To see the goods and services that sector 23 purchases as part of its intermediate expenditures, go to Explore > Social Accounts > Balance Sheets tab > Commodity Demand tab, then select sector 23 from the drop-down menu. However, if you switch over to the Commodity Production tab, you should see that sector 23 also produces commodities 3024 (Gold, silver, and other metal ore) and 3030 (Support services for other mining), both of which are purchased by sector 23. If you do not believe that commodities 3024 and 3030 are purchased from other mining firms in the study area, you can run your analysis as a contribution analysis, which will get rid of any the feedback effects to sector 23: http://www.implan.com/V4/index.php?option=com_content&view=article&id=660%3A660&catid=253%3AKB33&Itemid=1

I can confirm the same thing. There are no purchases for commodity code 3023 in industry 23. And yes there is commodity code 3024 and 3030 produced. And this makes sense since all copper mines produce lesser values of "other" minerals (or they would be called gold mines that produce some copper). What I am having trouble with is understanding why this is not a direct impact. The copper mine is producing the gold and certainly other mines in the area might purchase that gold. But shouldn't this be labeled as a direct output of industry 24 and not an indirect output of industry 23? To have it listed in the indirect output of sector 23 makes it appear as if the copper mine that we are modeling is buying gold from the study area to support their mining activities. Or do I have this backwards...and they are not buying gold. I am assuming that "Commodity Production", for each sector, are the commodities that the entire industry in the study area are currently producing before a new mine is modeled (e.g. it doesn't change even if the mine is modeled since it is a snapshot of the local economy). The "Commodity Demands" are the purchases that each sector is making. Is there a way to apply the logic of industry 23's commodity demand to the indirect output of my modeled mine? Can I make a table of the percentage that each sector's commodity demand code represents, when compared to the total commodity demand, and apply those percentages to the indirect output of sector 23 from my modeling? In this way I would see exactly where sector 23 is spending money in the local area (the indirect output)? Assuming that this works, the money that is being spent in code 3024 by industry 23 is the cost of mining the ore. We have certainly already included the value of the gold ore that is produced as a direct output (or Industry Sales) so this would make sense to me. This would clear up why it is an indirect output instead of a direct output. It is not the value of the gold, it is the purchases from our modeled mine that the local area can support associated with mining the gold. I hope that is not too confusing. I am still learning the intricate ways of this model. Thank you for the prompt response earlier.

Hi Donovan, When looking at the Study Area Data, the current output of sector 23 does include commodities 3024 and 3030 as 'direct' output. However, sector 23 also purchases those same commodities as input (i.e., indirect) - some of it which comes from its own sector.. Also note that not all of the indirect effects to sector 23 are from itself - other sectors buy these three commodities (3023, 3024, 3030) in the additional rounds of indirect. You can see which sectors buy each of these commodities by going to Explore > Social Accounts > Balance Sheets tab > [u]View by: Commodity Balance Sheet[/u] > Commodity Demand tab and selecting each of the commodities from the drop-down menu. You do not need to calculate sector 23's intermediate expenditure proportions yourself - they are all in that same table referenced in the previous post: Explore > Social Accounts > Balance Sheets tab > View By: Industry Balance Sheet > Commodity Demand tab. Gross Absorption is the expenditure per dollar of TIO, while Regional Absorption is [u]local[/u] expenditure per TIO. Regional Absorption = Gross Absorption * RPC for that commodity. Please let us know if you still have questions.

Thank you for the reply. I was unaware of the availability of the commodity balance sheet. As far as I understand these are snapshots of the local economy. If I wanted to have a specific break down of a specific industries purchases (indirect outputs), as a result of a scenario (in this case a mine that is being modeled), IMPLAN does not give this. For example I know that there is a specific indirect amount going to the industry that I am modeling (scenario results>detail results>view by output>indirect column), but I do not know exactly what that money is getting spent on. My thought is that I can use the social accounts explorer>balance sheet>"industry that I am interested in">commodity demand> regional inputs as a percentage of the total regional inputs for the industry that I care about, to see where exactly that money is being spent. In this way I am using the "snapshot" of the industry which is static, and I am applying that snapshot to my model runs which are fluid (e.g. I can change the scenarios). This allows me to see what specific purchases are being made in each sector. My fear was that there were some things that were being "double counted." The largest indirect purchases for the mine come from the same industry as the mine (industry 23). The largest part of those purchases (according to the social accounts balance sheet for industry 23) are from industry 3024 (gold mining) and not processing (3176). So it appears that the mine is buying gold from someone else in the study area. This seems strange since the mine produces gold and it is not showing up under processing which could account for buying the gold assuming that the mine had excess processing capacity. An alternate interpretation would be that the mine is buying the supplies that are necessary to mine gold that specifically fall under IMPLAN's/NAICS's sectoring scheme for gold mines. We would like two things: 1. To make sure that we are not "double counting" gold mining. 2. To be able to see where these specific indirect purchases from sector 23 are going in our model results.

Donovan, when you look at the BEA benchmark matrix, some of the strongest links are industries buying their own commodities. Some of these can be easily explained, In auto parts, carburetor assemblers buy carburetor parts (same industry classification) or as a means of inventory control - if a big order can not be totally filled by a firm they may buy similar product from a competitor. If you are trying to specify the entire gold production as a direct effect and do not wish in indirect and induced gold production (double counting) see this link: https://implan.com/v4/index.php?option=com_multicategories&view=article&id=660:660&Itemid=14