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    Hi Zafer,

    The definitions for Direct, Indirect, and Induced are not always as clear for households as they are when discussing Industry changes. We often suggest users forego the Direct, Indirect, and Induced terminology and storyboard their reports when discussing household income impacts. Example, "X change in local household income resulted in y change to local value added."


    Regarding the difference between a labor income change and a household income change:

    A labor income change represents income earned as compensation. The input value options include employee compensation and proprietor income. When the analysis is run, the model accounts for net in-commuting (if any) and payroll taxes (employee and employer paid) and distributes income across the different household categories. The model then accounts for household taxes and savings (if any) and the remaining income is applied to household-category specific spending patterns.


    A household income change is the same as the above but starts at the household income step (user selects a specific household category). It is possible to combine multiple household income change activities in one scenario. Note that while payroll taxes are accounted for in the labor income change, they are not accounted for in a household income change. If your value is a labor income value (i.e., employee compensation or proprietor income), then you will need to manually remove payroll taxes before using a household income change activity, otherwise impacts are overstated.


    Use cases vary by need, but typically a labor income change is used in cases where the user has a component of labor income (employee compensation and/or proprietor income) and does not have the information or need to manually split the income by household category. This is commonly the case during an analysis by parts (ABP).


    As with the labor income change, household income change use cases also vary, but they are commonly used to measure the effects of increased or decreased household incomes that are not directly tied to a change in production (e.g., new retirees moving into a region).


    Either a labor income change or a household income change can be used for federal employee payroll, but the household income change would require knowing or estimating the distribution of the income across the household categories. Additionally, there are administrative payroll sectors in IMPLAN that can be used for government payroll events.


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