InputOutput Analysis Basics and Using the IMPLAN Model

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Input-Output Analysis Basics and Using the
IMPLAN Model

• www.implan.com/index.htm

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An Input-Output Primer

• Focuses on inter-industry transactions
• Two suppliers intermediate and primary (labor)
• Two purchasers intermediate and final
• Composed of
• Transaction table
• Direct requirements table
• Total requirements table

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TransactionTable
0.21 of auto
0.14 of auto
1 of additional
industry
industry
spending on
spending on
spending on
auto production
other local
plastics re-
initiates
industries re-
enters
spending on
enters
Plastics
0.14
0.05
Electricity
0.01
Chemicals
0.09
Autos
0.05
Instruments
0.11
Rubber
0.07
Other Local
0.21
Industries
0.04
0.17
Local Employees
0.02
0.04
0.25
Leakage
0.02
0.04
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TransactionTable
Start
Other Local
Plastics
Electricity
Chemicals
Autos
Instruments
Rubber
Industries
0.21 of auto
0.14 of auto
1 of additional
industry
industry
spending on
spending on
spending on
auto production
other local
plastics re-
initiates
industries re-
enters
spending on
enters
Plastics
0.14
0.05
Electricity
0.01
Chemicals
0.09
Autos
0.05
Instruments
0.11
Rubber
0.07
Other Local
0.21
Industries
0.04
0.17
Local Employees
0.02
0.04
0.25
Leakage
0.03
0.04
5
TransactionTable
Start
Other Local
Plastics
Electricity
Chemicals
Autos
Instruments
Rubber
Industries
0.21 of auto
0.14 of auto
1 of additional
industry
industry
spending on
spending on
spending on
auto production
other local
plastics re-
initiates
industries re-
enters
spending on
enters
Plastics
0.14
0.05
Electricity
0.01
Chemicals
0.09
Autos
0.05
Instruments
0.11
Rubber
0.07
Other Local
0.21
Industries
0.04
0.17
Local Employees
0.02
0.04
0.25
Leakage
0.03
0.07
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Transaction Table Sample
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Direct Requirements Table

• Derived from the transaction table
• Shows inputs required from each supplier by each
  intermediate purchaser.
• Direct coefficients each input purchase in a
  column of the transaction table divided by total
  purchases (column sum).

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Transaction Table Sample
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Direct Requirements Table
Each column is the industrys production function
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Total Requirements Table

• Spending Rounds
• Derived from the direct requirements table and
  shows the total purchases of direct and indirect
  inputs required throughout the economy per unit
  of output sold to final purchasers by each
  intermediate supplier.

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Total Requirements Table
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Impacts Broken Down

• Direct impacts the initial injection of new
  economic activity, i.e., a new mfg plant locates
  in a state.
• Indirect impacts the sum of inter-industry
  purchases through all the rounds of purchasing
• Induced impacts the sum of all impacts
  associated with employee expenditures

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Multiplier

• Output multiplier
• Income multiplier
• Employment multiplier

Direct Indirect Induced Direct