Direct Earnings and Employment with I-RIMS
I asked a question over the phone about determining the direct earnings and direct employment using data I had on output to final demand for a specific industry and I recieved the following answer from the IMPLAN folks by e-mail:
"The most recent version of RIMS II did not include separate multipliers to estimate direct earnings and employment from final demand sales. Likewise, neither does I-RIMS. However, it is fairly simple to calculate these direct effects. She would just need to divide the total effect by the appropriate multiplier in order to do so. For example, if the total employment effect was 12 and the final demand employment multiplier was 3, she could simply divide the total employment effect by the final demand employment multiplier to back out direct employment (12/3 = 4 direct jobs). You could repeat the same process to estimate direct earnings from total earnings and the final demand earnings multiplier."
I think I must be mis-interpreting the answer in my work, which is as follows: An input of $1.5 million to the oil and gas extraction industry, which using the multipliers I have, results in about $2.6 million of final demand output (multiplier of 1.6923), $413,000 in final demand earnings (multiplier of 0.27129) and 10.3 final demand jobs (multiplier of 6.772). Then I decided to try to estimate the direct earnings and employment from the $1.5 million investment. I took the $413,000 in total earnings and divided by the final demand multiplier (the 0.27129 number) and of course got $1.5 million. Am I supposed to multiply by the final demand multiplier instead of dividing by it? Or divide the total earnings by the direct effect earnings multiplier?
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IMPLAN SupportHi Susan, You don't want to divide either of those by the final demand multiplier, but rather the direct effect multiplier. For example: The Direct Employment Multiplier = Total Jobs/Direct Jobs. You know Total Jobs, so all you need to do is divide your known Total Jobs figure by the Direct Employment Multiplier and you will get Direct Jobs. Ditto for Earnings, just divide your known Total Earnings by the Direct Earnings Multiplier. Please let us know if you have any additional questions. IMPLAN Support Team0
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