Capital Investment
Good Afternoon, I am working on modeling the impacts of a capital investment in the wireless industry. Initially I completed this analysis as an industry output event, but on a second look I thought this may not be the appropriate way to complete this analysis. Would an industry spending event be more appropriate?
Additionally I have been asked to determine the impact of the investment over 10-years. As IMPLAN does not do this would it be appropriate to model the expected revenue associated with the investment by year for 10-years as an industry contribution?
Thanks in advance.
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Good afternoon,
What data do you have about the capital investment? How much is being spent and on what? The data available informs how the analysis should be most appropriately setup.
Will the impact of the investment over 10-years include the capital investment impact and the annual operations in the wireless industry? We do not recommend using IMPLAN to analysis effects further than 5 years in the future. Instead, we recommend analyzing annual operations/revenue separately from capital investments/construction. The impact from the annual operations can be reported as the economic effects supported year-over-year.
If you have data on the expected revenue by year for multiple years, this can be analyzed by year. In the results, divide employment figures by the number of years to calculate annual average employment. Reporting annual average employment can prevent confusion for readers trying to interpret the results.
Industry Contribution Analysis (ICA) Events do produce more conservation results because they prevent buybacks to the Industry. We recommend using an ICA Event when analyzing existing Output that makes up more than 50% of the Output in the Region in the Data Year.
Thank you,
Maria -
Maria,
I have data on the capital estimations by unit and investment industry. I can break this out in the investment aspect of the project. I will break out the capital investment from the spending in the analysis. I am not clear as to what event type the investment should be under.
As far as the economic activity supported by the estimated revenue - would you recommend completing an analysis on each years contribution for the 10-years, with an annualized look at employment?
Thanks
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Hello,
Great, do you have information on where these capital investments are being source from? Construction investments can be analyzed in the region via an Industry Output Event in the appropriate construction industry. For units of capital that are equipment, consider whether or not this equipment was produced locally.
This article provides a questionnaire that will guide you to the appropriate event setup for analyzing purchases: https://implanhelp.zendesk.com/hc/en-us/articles/360043873833-Industry-vs-Commodity-Output
This article speaks more specially to analyzing capital investments: https://implanhelp.zendesk.com/hc/en-us/articles/360043873053-Analyzing-Capital-InvestmentsYes, completing an analysis on each years' contribution for the 10-years, with an annualized look at employment is an appropriate approach for estimating the 10-year effect.
Best,
Maria
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