31-07-2012, 09:52 AM
Input-Output Analysis
Input-Output Analysis.ppt (Size: 505 KB / Downloads: 111)
Input-Output Models
An input/output table quantifies the transactions between sectors in an economy.
It’s a “snap-shot” of the economy for a one-year period.
By understanding these linkages, we are able to predict how a change in one sector will affect the other sectors.
Multipliers can be estimated.
Predictive Use of Input-Output Analysis
Impacts are tracked throughout the economy
Multipliers are derived from regional economic accounts
Only local transactions are used to create the multiplier effect
Multipliers
Multipliers measure total change
throughout the economy
from a one unit change
for a given sector.
Multipliers
Direct effects represent direct or initial spending
Type I - Direct and indirect effects include the direct spending plus the indirect spending or businesses buying and selling to each other
Type II - Direct, indirect and induced effects include direct and indirect plus household spending earned from direct and indirect effects
Multiplier Cautions (Very Important)
Multipliers are NOT interchangeable
(i.e. employment and value added multipliers are very different, thus you can’t use one for the other)
Not transferable to other study areas or across different time periods
No differentiation between full-time and part-time jobs
Results less certain for new types of economic activity
They do tend to overstate the impact of change
Take caution for multipliers larger than 3
IMPLAN Software
A talented person could probably figure out relationships for a 6 sector economy
An economy with more than 500 sectors is another story
IMPLAN software does the work for us and calculates multipliers
IMPLAN is relatively expensive, hence the need for a partnership with the University
Model Limitations
Based on a set of assumptions that might restrict the model. Other modeling techniques can be used to provide a range of impacts, not one single number
Economic impacts should only be part of the discussion. We should not ignore the following:
Quality of Life
Environmental Impacts
Social and Cultural History
Equity Impacts
THIS IS WHY COMMUNITY INVOLVEMENT IS VITAL