# IIA Detailed: What to use as total output figure and should I edit spending?

Analyzing non-profit.  They have seven employees at a cost of \$300,000.  Their total budget is \$3.5 million, yet 60% of that is spent locally.

Inputting I use 7 for employment, \$300,000 for compensation.  However, what do I use for total output (the bottom right hand spot)?  The full \$3.5m or the local amount?  Do I subtract employee comp or leave that in there?

Also, I'm assuming I use total output and not intermediate inputs because the budget is not a true 'cost of goods sold'.

Finally, I have a detailed budget, should I edit the spending to match the % they spent?  Example, they spent 16% on equipment rental, should I change that in the spending patterns?

Hopefully this all makes sense.  Thanks.

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• Official comment

Hello Christian!

For all Industries in IMPLAN, Output equals the value of Industry production, which is equal to sales plus net inventory change. In IMPLAN these are annual production estimates for the year of the dataset in producer prices. The Leontief Production Function tells us that Output=Value Added + Intermediate Input spending. Value Added is comprised of Labor Income(Employee Compensation + Proprietor Income), Taxes on Production and Imports, and Other Property Income(which represents gross operating surplus minus proprietor income). Intermediate Inputs are purchases of non-durable goods and services such as energy, materials, and purchased services that are used for the production of other goods and services, rather than for final consumption.

Being that this is a non-profit, I would imagine there are no Proprietors and thus no Proprietor Income. So for your employee/income figures, I would input that as Wage & Salary Employment and Employee Compensation - while also inputting 0s for Proprietor Employment and Proprietor Income. On your "total budget" value of \$3.5M, is this an operations value(VA+II)? If so, it can be input as Output. If you can classify it as Output, this value would also include the Employee Compensation value of \$300k by definition(so no need to subtract from the \$3.5M). However, if this is the value of intermediate expenditures made by this firm, we would need to classify it as Intermediate Inputs instead. If this is the case, you can leave Output blank and allow IMPLAN to estimate this value based on the EC/II values.

Being that you are saying that only 60% of this budget is spent locally, I feel like you are most likely looking at Intermediate Inputs. If I am correct in this assumption, you can account for this local spending rather simply: Input \$3.5M as the II value, and within the Spending Pattern set the Local Purchase Percentage(LPP) for all Commodities as 60%. Also, if you know that the mix of Commodities within the spending pattern and their associated percentages is different than the mix of Commodities you know the firm to purchase, I would absolutely recommend you make edits where appropriate.

Hope this helps!

Michael Nealy

• Christian,

That would be correct!

Best,

Michael Nealy

• Thank you it does help.
I should have mentioned I did zero out proprietors and proprietors income.  I also zero'd out OPI and TOPI.  I believe you did that in Module 4.

The statement they provided me with a list of expenses associated with producing their event.  Based on your reply, I would agree this is most likely II.  I forgot about the ability to adjust LPP.   I will go that route.

When editing spending patterns, I'm assuming I delete the commodities that are not showing up on their expenses (similar to what you did with the community college example in module 4).   Correct assumption?