Rental Expenditures

Hi Ellen. In reading your Forum Post, it looks like you are pretty clear about how you want to model the impact of business operations in your region. However, we would caution that you not include the impact of workers who lived outside of your study area in the analysis. Workers tend to spend their wages where they live, although you could assume some small percentage is spent in the study area in the form of per diem expenses. You would need to contact those workers who live outside of the region to determine what those expenses might be. With that said, we will focus on the second question in your Forum Post which deals with the impact of employee spending on rents in the area. This question is best answered using a “Net Analysis” approach. In your case, a net analysis would only consider the net change in housing rent of workers who reside in the region. The assumption is that these workers are already paying rent somewhere in the region, so you don’t want to count these payments because it would be double-counting. The true or net change is housing rent is the difference between their old rent payment and their new rent payment since being employed by the business. It may be their current job pays higher wages, so they can afford to pay more in rent to live in better housing. Another situation where housing rent would be counted is in the case unemployed workers who paid no rent prior to being hired by this company. These would be legitimate payments to include in the analysis. Housing rents paid by workers who reside outside of the region of the business should not be included in the analysis. These rents and wages will be paid/spent in the regions where those workers live. This decision would keep your results from being overly inflated in that only housing rents (net changes) associated with workers who reside in the area or workers who were unemployed and paid no rent prior to being employed with the company are included in the analysis. Concerning the issue of rental expenditures that vary significantly from the IMPLAN model's estimate of induced spending for the Real Estate Establishment sector, you can customize the model to fit your specific data. The model is flexible and gives you the ability to overwrite internal estimates with known or local data. We highly encourage you to do so when appropriate. We hope this answers your question.