Environmental Impact

Hello William! 

Just to make sure that I am accurately understanding your project setup, you are modeling a decrease in home energy spending as an increase in Household Income (due to savings)?  Please correct me if I am wrong!

Hey Michael,

That's exactly right. 

So if you were to run the project with just that event (Increasing Household Income), the way IMPLAN interprets that is that the Household now has additional income, some of which will be spent. There will be induced output supported in the regional economy from the additional Income that is spent, which will result in additional environmental Impacts from the associated Industries. You may want to consider a net analysis, which would allow you to model both the losses to private Industries that produce those utilities, as well as the additional Household Income associated with the savings. So you would see a "net" emissions change from the negative environmental effect from Industry losses, and the positive effect from the increased Household Income. Note that in this scenario you would be assuming that the utility companies would not continue to produce that Commodity and that the previous local consumption could not be replaced by non-local consumption (exports). Both of those links would be helpful in setting up such a project!  

Hope this helps!

Michael Nealy

Thanks Michael. This was helpful.

One additional question - when examining the induced impact of household savings, is the total dollar savings (input) included in the induced output results?

Happy to hear that William!

So the Event Value (input) for Household Income Events should include all new household income for all residents in their region, including their personal taxes(not payroll tax or in-commuting) and savings. This is because the model will automatically deduct those personal taxes, savings, and imported goods and services from the input value. Whatever is left after deductions is then applied to the multipliers, giving you those induced results. The rate at which taxes, savings, and imports are deducted from the Event Value are dependent on the Household Income level, as well as the Study Region.

To make sure I am understanding correctly, the event value is not included in the induced output. For example, an event value for household income of $1,000 shows an induced output of $1,005. We could then add these value together for total savings + output impact ($2,005)? 

Or is it that the event is totaled at $1,000 and only $5 additional dollars are generated in output?

I hope that makes sense. 

My apologies for not answering your question directly, the answer would be yes - the event value IS included in the induced output. Just not on a 1-1 basis. To add Induced Output from the results + the Event Value would be overstating the Economic Impact. 

Thanks Michael!