Hi.
I'm working on a contribution analysis that includes both industry output and commodity output events. I know IMPLAN has an Industry Contribution Analysis (ICA) event type that can remove backward linkages within the industry I'm modeling. If my project includes a few ICA events, does that mean backward linkages will be constrained for all events in the project, even for the ones that aren’t an industry change? If so, are there any issues with removing backward linkages in commodity events?
Hi Jenn,
First, it is important to understand that those Event Types are used to analyze different types of economic activity. Industry Contribution Analysis (ICA) is a method used to estimate the value of an Industry or group of Industries in a Region, at their current levels of production. Commodity Output Events are most appropriate to use when an analyst knows there is a change in Commodity demand or production but does not know which Industries or Institutions will meet that demand. While we don't in general recommend trying to transform Commodity Output Events into a Contribution version, there are valid reasons why a user may want to restrict the buybacks to an Industry for this Event Type. One of the reasons is to prevent double counting.
An approach we do recommend is using an ICA Event with a standard Industry Event or Industry Impact Analysis (Detailed) Event, so users can utilize their specific values to model an existing Industry (contribution framework). They would need to enter the values they have for the Output Components in the IIA Event and then use an ICA event with an Event Value of $1 (in the same Industry as the IIA Event) in the same group and filter in their results for just the IIA Event. This way, the Indirect and Induced effects in the target Industry will be restricted due to the presence of the ICA Event of $1 in the same Industry and Group as the IIA Event.
Also, it is important to clarify how an ICA Event will affect other Events in a Project. When an ICA Event is added to a Group that also includes other Events, that ICA Event will affect the other Events in the same Group. The ICA Event applies a constraint upon the model by removing feedback linkages (buybacks) to the Industry being analyzed. This means that the Industry selected as the Specification for the ICA Event will not have Indirect or Induced Effects. This is not only true for the ICA Event, but also applies to the other Events in the same Group.
For example, in the image below, there are two Events and both are in the same Group. Industry 492 is selected as the Specification for the ICA Event, so for that Event there won’t be any Indirect or Induced Effects for Industry 492. The same is true for the Commodity Event because it is in the same Group as the ICA Event. There won’t be any Indirect or Induced Effects for Industry 492 for either Event.
Best,
Deminique Heiks
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