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Modeling impact with partial labor data

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James Barrett

Hi- I'm modeling a project that covers multiple industry impacts. For one of them we know that the project will require a certain number of specific employee types at a known employment cost, but we don't know about the rest. For example, a $10 million construction project that will have 4 specific employees handling a technical part of the project at a cost of $1m, all of which is employee compensation. All the intermediate inputs etc are included in the other $9m. 

I can't model it as a $10m construction project withe employment set to 4, because it will ignore the rest of the (non-technical) employees. I was thinking of modeling it as a $9 construction project with an addition $1m of labor income and adding the 4 technical employees to the direct labor count, but then the $1m of pay gets excluded from direct Value Added, Output, etc. I thought of modeling it as a $9 construction project with an additional $1m engineering expenditure with labor set to 4, and labor income set to $1m, but then the model generates additional output and indirect impacts on the assumption that they are necessary to support the engineering project, which is not the case.

 

Is there a way to model a situation like this and capturing all of the impacts correctly? Thanks 

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    Michael Nealy

    Hello James!

     

    One way to account for this would be to run two separate Industry Impact Analysis (Detailed) Events:

    Event 1: Specify the $9M Output for the rest of the construction costs less the specific Employment, Employee Compensation, and Output. IMPLAN would estimate the split across the components of this $9M of Output.

    Event 2: Specify the $1M Employee Compensation and four Wage & Salary Employees, setting Output = Employee Compensation = $1M. IMPLAN will apply the total $1M Output value to Employee Compensation/Labor Income, thus generating only Direct and Induced Effects (as there are no Intermediate Inputs). This could be modeled in the specific Industry that you know these Employees are a part of, such as architects/engineers.  

    The Results in this case (with no filters applied) would reflect the total $10M in Direct Output for the Project, and include both the Direct specialized Employment as well as the other Direct Employment. However, one thing to note is that because construction Industry Output includes both hard and soft costs, these specialized Employees could actually be a part of Intermediate Inputs reflected in the Industry Spending Pattern.

     

    Hope this helps. Let me know if you have any additional questions.

     

    Happy Holidays!

    Michael Nealy 

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    James Barrett

    Thanks Michael. I tried that earlier with a standard Industry Impact, and it was giving me positive indirect effects and negative direct OPI, which was not what I was looking for. But when I did it with a detailed industry impact, the indirect effects went to zero as expected. Thanks a ton!

     

    -Jim

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