negative value added

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    IMPLAN Support
    Hello, To help us better answer your question, could you please provide the year and counties you are working with?
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    samonte_g
    year 2012 Northampton County Accomack County
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    IMPLAN Support
    Negative values in Value Added are a common source of confusion. Value Added = Employee Compensation + Proprietor Income + Other Property Type Income + Taxes On Production & Imports. PI, OPI, and TOPI can be all be negative and if any one or a set of these sum to a more negative than the positive values (i.e., if the negative components are greater in magnitude than the positive components, then you will end up with negative VA). For example in the 2011 US Model Sectors 348 and 349 (both of which produce commodity 3348) have negative OPI. Negative OPI just means that the industry lost money that year (costs were greater than revenues). You can check to see exactly what is the circumstance in your regional industry by going to the Explore> Study Area Data and looking at the View By: Industry Detail sheet to see the breakdown of Value Added and to view which factor is causing the Value Added to be negative. If the factors involved are Other Property Type Income or Taxes on Production & Imports these don’t impact the Indirect and Induced results as both of these factors are treated as leakage. The same is true for these counties in Virginia, the non-profit Sector 425 has negative OPI of a large magnitude relative to other components of Value-Added. While the negatives are correct as far as the 2013 picture of the economy goes, the negatives don’t always necessarily make sense for economic impact analysis (i.e., it is possible that the negative OPI is not a long-term trend, in which case they could edit the Study Area Data or simply zero out the Direct OPI impact (and adjust the total OPI and Direct and total Output impacts accordingly).
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