Oddities in Direct Job Impacts

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    IMPLAN Support
    Hi Jonathan, Thank you for your post. So that our data team can look into this further, would you be able to tell us the sector you are using for your study. Thanks!
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    jgray
    The study includes a mixture of the following sectors: Rental and leasing services and lessors of non-financial intagible assets Air transportation Accommodation and food services Administrative and support services Advertising, public relations and related services Arts, entertainment and recreation Computer systems design and other professional, scientific and technical services Insurance carriers Lessors of real estate Professional and similar organisations Postal service and couriers and messengers Publishing, pay/specialty services, telecommunications and other information services Retail trade Transit, ground passenger and sightseeing, and support activities for transportation Wholesale trade
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    IMPLAN Support
    HI Jonathan, Thank you for the additional information! In your case it appears that inflation outpaced the increase in sales. When splitting out the sales associated to your 2013 impacts and applying the 2013 deflators to them their 2012 equivalent sales values were actually smaller (thus generating less jobs) than your 2012 totals. To do the type of calculation included in your spreadsheet, you would need to have both Activities expressed in the same Dollar Year for View, otherwise it is like measuring the difference between mm and cm without making a conversion. The event year field is meant to allow you to enter dollar amounts in whatever dollar-years they are reported to you for the purpose of inflating or deflating that nominal dollar amount to the same dollar-year as the data in the IMPLAN model. So, since you are using a 2012 IMPLAN model, selecting a 2012 event year would mean that all deflator values are 1. Job counts don’t have inflation rates associated with them, but the Output per Worker ratio from which they are calculated will be affected by Output Deflators. Here’s an example: Let’s assume you have two impact events in an industry that has rising price index values (most industries follow this pattern, technology manufacturing being a notable counter-example- although all your listed Industries follow the 'normal' pattern). One impact event (A) is $1,000,000 industry sales in 2012 dollars (and you accordingly select 2012 as the Event Year) and the other event (B) is $1,000,000 industry sales in 2013 dollars (and you accordingly select 2013 as the Event Year). Implan believes inflation from 2012 to 2013 in your sector is 2%. For event A, it recalculates the direct effect value as $1,020,000 ($1,000,000 * 1.02), which is the value of $1,000,000 2012 dollars in 2013 dollars. It assumes there is 1 job for every $100,000 of industry sales. The direct job effect therefore is 10.2. For event B, it keeps the industry sales amount valued at $1,000,000, and estimates the direct job effect as 10 (1,000,000 / 100,000). While increasing productivity does often explain changing output/worker ratios over time, in this particular case, it is a matter solely of inflation/deflation of dollar values, with constant (i.e. zero) inflation/deflation of job counts. Moving on to indirect and induced jobs – the total indirect and induced jobs are calculated, effectively, based on a direct impact value of $1,020,000 for event A and an impact value of $1,000,000 for event B. In a particular IMPLAN model year and with the same industries, this necessarily will imply a higher number of indirect and induced jobs. Even if you enter a higher nominal industry sales amount in Event B (2013 event) than Event A (2012 event), if the deflator implies a higher rate of price increase than the rate of increase of your nominal event values, the same type of effect will occur. Also, note that regardless of the Dollar Year for View you select when reviewing your results, the job impact will remain the same. Thanks~!
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