Labor Income versus Household Income
Hi
I have a construction budget that includes a single project cost for materials and labor. I have a separate file for "soft costs". Working with the materials and labor budget, I imported the industry spending pattern of sector 34 to do an analysis on construction materials, which is 45% of the total. The labor component is the remaining 55%. My question - is it more correct to use "Labor Income Values" under sectors 5001 and 6001, or to use "household income change" (in this case sector 10005) to model the labor impacts. I tried it both ways and the difference is pretty significant (higher for household income change).
Thanks
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IMPLAN SupportHello Steve, There would be a large difference. If the value you are working with is loaded payroll, then you will want to use the Labor Income Change. If the value you are working with is net payroll (employer and employee contribution) than you will want to use the Household Income Change Activity. The reason for the difference you are seeing is that the Labor Income Change is stripping out the expected proportion of payroll taxes in addition to the savings rates and income taxes. The Household Income Change is only removing savings and income taxes. One other note, that you probably have thought of, but we will mention since it wasn't mentioned in your post. If your soft costs include legal and architectural fees you will want to remove those Sectors from your 34 spending pattern so that you distribute the remaining values appropriately and don't 'double count' values to those two Sectors. Please let us know if you have any additional questions. IMPLAN Support Team0 -
Thanks. I thought this was the case, but I wanted to confirm.0
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