Jobs

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A job in IMPLAN = the annual average of monthly jobs in that industry (this is the same definition used by the BLS and BEA). Thus, 1 job lasting 12 months = 2 jobs lasting 6 months each = 3 jobs lasting 4 months each. A job can be either full-time or part-time.  Similarly, a job that lasts one quarter of the year would be 0.25 jobs.  Note that a person can hold more than one job, so the job count is not necessarily the same as the count of employed persons.

Information on converting between IMPLAN jobs and Full-Time Equivalents can be found in the 536 FTE & Employee Compensation Conversion Tables found in our downloads section. Download 2017 Version

Find other conversion tables here: https://implanhelp.zendesk.com/hc/en-us/articles/115002997573-536-Sectoring-Scheme

 

Please note also that Full-Time Equivalent by BLS definitions is 35+ hours.

http://www.bls.gov/opub/ils/pdf/opbils05.pdf

 

BLS also has this definition in their Glossary, but definitions depend on the survey (notice the two definitions of Full-time)

http://www.bls.gov/bls/glossary.htm#F

Labor Income

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Labor Income is the sum of Employee Compensation (wages and benefits) and Proprietor Income.

 
 

How Zip Code Files are Estimated

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We only create data for those zip codes for which we have one of the following: land area from the latest Decennial Census, population or household count from the latest American Community Survey (ACS), railroad employment from the latest Railroad Retirement Board report, or Census ZBP employment.  Having at least one of those allows us to distribute part of the county’s data to the zip code. 

Our main source of data for generating zip code files comes from the Bureau of Census County Business Patterns (CBP) program, as they release 6-digit NAICs employment data at the zip code level. Rather than employment counts, the CBP data provides information on the number of firms in each of 14 firm size classes (e.g., 1-4 employees, 4-9 employees, 10-19 employees, etc.) for each 6-digit NAICs sector. This allows the CBP to avoid disclosing the exact number of employees at a single firm.

To create our data, we take the mid-point of each of the size classes and multiply this by the number of firms in that size class (e.g. if there are 6 firms reporting under a single NAICS code for 4-9 employees, we get an estimate of ~39 employees for that NAICS code and class). By summing the estimated number of employees within a 6-digit NAICS specification, and aggregating the NAICS code employment values into their appropriate IMPLAN sector, we create an estimate of the employment for that sector at a zip code level. We also add together employment data for the all zip codes represented in a larger region (county or counties) to aid in distribution of non-employment IMPLAN data to individual zip code regions.

After aggregating the 6-digit NAICs data to the 536 IMPLAN Sectors, we can create ratios for distributing the county(ies) level IMPLAN data to the desired zip-code regions. The ratio is derived by dividing the specified zip code employment by the county’s zip code employment for each IMPLAN Sector.

Employment ratios are used to distribute all industry data (Employment, Output, Employee Compensation, Proprietor Income, Other Property Type Income and Tax on Production and Imports) into their respective zip code regions.

Census of population data is also available at the zip code level. The ratio of a zip codes population compared to the county’s population for the 2000 Census is applied to the county’s current population to provide an estimate of the zip code area’s current population.

Industry Sectors that CBP Does Not Cover

Proxies are used to distribute industry sectors that CBP does not cover to ZIP Code regions. These sectors, and the proxies used to separate the zip code employment from the county(ies) are shown below:

  • Agricultural Sectors: These are estimated from current Census of Agriculture- county level farming is distributed to zip codes based on the Census number of farms by zip code.
  • Railroad: These are estimated based on trucking and warehousing distribution employment as a proxy.
  • Religious organizations: Population is used as the proxy for determining these employment values.
  • Government, except education: Total employment for the zip code is used to distribute county level government employment.
  • State & local education: Population is used.
  • Construction: Employment for NAICS 22 is used for this proxy.

Final Demand Proxies to Distribute Zip Code Regions

Final demands also need to be estimated. Below are listed the proxy values used to distribute the county(ies) final demands to a zip code area.

  • PCE (9 classes): From latest Census American Community Survey by zip code data. This data contains the number of households by income class. E.g. if the zip code area has 10% of highest income households it gets 10% of the highest PCE final demand.
  • Fed Military & Non-military: overall Employment
  • State & Local Education & non-education: overall Employment
  • Federal Sales: overall Employment
  • State & Local Gov Sales: overall Employment
  • Investment: Employment by Industry
  • Foreign Export: Employment by Industry
  • Change in Inventory: Employment by Industry

Productivity Data

Because of the limitations of the data, productivity data for the zip code area is the same as for the county(ies) containing the zip code area. The following examples are included as part of the productivity data:

  • Output per Worker
  • Earnings per Worker
  • Value Added to Output ratio

Understanding the data in your IMPLAN Zip code files

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When working with Zip Code level data, there are several factors to consider. This article, while not exhaustive, lists the main items to keep in mind when using Zip Code data for your geographical study region.

MRIO, Aggregation and Leakages

  1. Multi-Regional analysis is not yet possible with zip code files. While you have received trade flow data files with your data purchase, the current version of the IMPLAN Version 3 software can only estimate zip code effects with the Econometric estimation of imports (RPCs).
  2. Zip code files, like other IMPLAN files, can be combined to create a region or used independently. Please keep in mind that while an individual zip code file will create Multipliers and have impacts, these impacts will be minimal. This is because zip codes may have no population and/or little to no employment (see notes 5 and 6). Also, many individual zip codes are not large enough to allow for local sourcing of materials needed for the indirect effect or to provide adequate services to create significant induced effect leading to much of the potential impact being lost in leakages (as in note 3).
  3. Zip code regions may represent very small economic regions and consequently, be extremely open to leakages. These leakages, even to nearby regions (in some instances this could literally be across the street) are lost from the modeled region resulting in very small indirect and induced effects. Please take into consideration where indirect purchases will be located and where employees may be spending their labor income when customizing zip code regions for analysis.
  4. Many of the issues in notes 2 & 3 may be addressed once zip code files/zip code regions are able to be analyzed with the Multi-Regional modeling technique. Multi-Regional analysis will allow for purchases to be made between Study Area regions (the zip code(s) and the linked regions) by tracking trade between these regions, potentially capturing many of the lost impacts. MRIO, however, is not yet available for zip code files.

Zip Codes Not Represented

  1. Not all zip codes listed by the U.S. Postal Service may be represented in the zip code package you receive. The USPS can open/close post offices or reorganize routes on an on-going basis, thereby changing zip-code demographics. Because of this, the County Business Patterns and Census demographic zip code representation may not be current.
  2. Depending on the year, roughly 4% of zip-codes have neither County Business Patterns (CBP) employment nor Census (demographic) data. If your region includes any of these zip codes, they will not be available in the package you purchase, as there is inadequate information to create Multipliers for these regions.
  3. Depending on the year, there will be roughly 8,000 zip-code files for which there is only CBP data with no demographic data. Most of these are P.O. boxes and “unique” point codes. They serve business but do not represent residential population. With no household representation, all employment would be considered in-commuting and have no local induced effect.
  4. Conversely, there are also some zip-code files with only demographic data and no CBP data. While CBP data does not exist for these zip-codes, they may still contain employment in some sectors since CBP data do not cover all IMPLAN sectors. Population is used as a distributor for most of these non-covered sectors. Farm counts by zip-code from the 2012 Census of Agriculture are used to distribute agricultural industry data in these cases.
  5. There will be cases where you may find an industry exists in an actual zip code region but does not show up in the zip code data (or even the county data). This occurs because of unreported sectors in the CBP and inconsistencies in data between CBP and BLS covered wages and employment. When this issue occurs, you will need to Customize your IMPLAN data to add the industry to the Study Area. CBP data are primarily obtained from administrative records supplied by the IRS, Social Security, and other sources. CBP is tabulated on an establishment basis, and each business location is tabulated only once according to the primary business activity. The industry classifications of establishments in the CBP are self-reported in the vast majority of cases. BLS CEW data are obtained from quarterly tax reports submitted to State Employment Security Agencies.

Inventory valuation adjustment (IVA)

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The difference between the cost of inventory withdrawals as valued at acquisition cost and the cost of withdrawals as valued at replacement cost. The IVA adjusts inventories from the change in book value reported by most businesses to the definition of inventories used in the NIPAs and industry accounts—that is, the change in physical volume valued at the average prices for the time period. The IVA is subtracted from corporate profits and nonfarm proprietors’ income to remove inventory profits or losses from the income reported by businesses. (Up through the 1997 benchmark, the IVA in the I-O accounts has differed from the IVA in the NIPAs by the amount of the LIFO-reserve adjustment.) (BEA)

How Island Area Data Sets Vary from the Rest of the US

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Data sets for Island Areas are not nearly as comprehensive nor timely compared to the US. Nor are Island Areas included in the US NIPA accounts, so there are no overall controls as there are for the US states and counties.

The Five US Island Areas are:

  1. American Samoa: AS
  2. Commonwealth of Northern Marianas Islands: MP
  3. Guam: GU
  4. Puerto Rico: PR
  5. Virgin Islands: VI

BLS Covered employment and wages (CEW) is only available for PR and VI.

Census County Business Patterns cover all five island areas and are the main source for employment and income data.

For Agricultural sectors, the Census collects “Outlying” areas – which includes the 5 island areas. The 5-year census for outlying areas is published several years after the corresponding Census for the US.

Military employment comes from the Department of Defense: https://www.dmdc.osd.mil/appj/dwp/dwp_reports.jsp.

GDP data is available in BEA news releases for US territories. The data is for overall GDP and is not sector specific, but it does provide controls. An example of such a report is can be found at this link.

There is some miscellaneous data collected from local government sources. Guam probably has the best government statistics collection, but data is still sparse.

Ratios and updates to the current data year are derived from US relationships and CEW data for Puerto Rico and Virgin Islands (as proxies).

Inventory

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Stocks of goods held by the firm over a period of time. In the I-O accounts, inventory includes (1) products purchased for resale, generally held by wholesalers and retailers, (2) materials and supplies for use in the production of goods for sale or in the provision of a service, (3) products that are partly processed and that require further processing prior to sale (work in process), and (4) finished goods held for sale. (BEA)

Understanding Multipliers

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INTRODUCTION:

Multipliers are the basis of how an I-O Analysis System such as IMPLAN makes estimations of the potential impacts of economic changes. Expressed as a rate of change, a Multiplier describes how for a given change in a particular Industry a resultant change will occur in the overall economy (e.g. for every dollar spent in the economy an additional $0.25 of economic activity is generated locally, implying a Multiplier of 1.25).

This article describes what a Multiplier means, the basis of how we can determine that an additional $0.25 will occur locally, and introduces the idea of aggregating Industries if you are trying to find the impact across a broad spectrum of production rather than a specific Sector.

 

DETAILED INFORMATION:

Multipliers exist in the IMPLAN Model to describe rates of changes for several different variables. The descriptions below apply to Type SAM and Type I Multipliers, which are unitless values.

  1. Output – Output is the base Multiplier from which all other Multipliers are derived. The Output Multiplier describes the total Output generated as a result of 1 dollar of Output in the target industry. Thus if an Output Multiplier is 2.25, that means that for every dollar of production in this Industry $2.25 of activity is generated in the local economy: the original dollar and an additional $1.25.
  2. Employment – Employment Multipliers describe the total jobs generated as a result of 1 job in the target industry. Thus if an Employment Multiplier is 2.33, that means that every Direct Job creates 2.33 jobs in the total economy: the original job and 1.33 additional jobs.
  3. Labor Income – Labor Income Multipliers describes the dollars of Labor Income generated as a result of one dollar of Labor Income in the target Industry. A Labor Income Multiplier of 2.2 indicates that for every dollar of Direct Labor Income in this Industry another $1.20 of Labor Income is generated in the local economy.
  4. Value Added – Value Added Multipliers describe the total dollars of Value Added generated as a result of one dollar of Value Added in the target Industry. A Value Added Multiplier of 2.3 indicates that for every dollar of Direct Value Added in this Industry another $1.30 of Value Added is generated in the local economy.

You can also compare Sectors’ Multipliers across regions. You will find that Multipliers are generally larger the larger the Study Area is. This is the result of a typical pattern that describes that larger regions will have less leakage to imports. Thus for accurate comparisons, it is most appropriate to compare states to states and counties to counties. 

TYPE I VS. TYPE SAM MULTIPLIERS: 

Type I and Type SAM Multipliers differ in their definition of “total” impact

  1. Type I – Looks only at business to business purchases and does not include the effects of local Household spending. This Multiplier is calculated as:
    (Direct + Indirect Effects) / Direct Effect.

    1. Since the denominator for the multiplier is always 1.00, the Type I Multiplier will equal the Direct Effect + the Indirect Effect
    2. Thus, the Type I Multiplier for Employment describes the direct and supply chain jobs within the study region resulting from one direct job.
  2. Type SAM – In addition to the Type I Multiplier, the Type SAM Multiplier includes the impact of Household spending and is the more common Multiplier. It is calculated as:
    (Direct + Indirect + Induced Effects) / Direct Effect.

    1. For example, the Type SAM Multiplier for Output describes the total output created in the study region resulting from one dollar of direct output.
    2. It also includes other non-industrial transactions, such as institution savings, payment of social security taxes, and commuting.

 

EFFECTS VS. MULTIPLIERS:

When the dollars or jobs associated to all the rounds of local purchasing are summed, the resultant values are the Effects. The Multiplier Effects come in 4 types:

    1. Direct Effect 
      1. For Output, these effects are either 1.00 or 0.00. For every dollar spent in an Industry, if the Industry exists in the region, there is a dollars worth of activity in the local economy. If the Industry doesn’t exist in the region, the effect is 0.00.
      2. For Employment, the Effect represents the number of jobs per $1,000,000 of production in the Industry.
      3. Labor Income Effects represent the Labor Income dollars per $1,000,000 of production in the Industry.
      4. Value Added Effects represent the Total Value Added and various Value Added subset dollars per $1,000,000 of production in the Industry.
    2. Indirect Effects
      1. For Output, the Effect represents the sum of local business to business purchases per dollar of Output.
      2. For Employment, the Effect represents the number of jobs per $1,000,000 of business to business purchases by all resultant rounds of local Industry purchases.
      3. Labor Income Effect represents the value of Labor Income dollars per $1,000,000 of business to business purchases by all resultant rounds of local Industry purchases.
      4. Value Added Effect represents the of Value Added dollars per $1,000,000 of business to business purchases by all resultant rounds of local Industry purchases.
    3. Induced Effects
      1. For Output, the Effect represents the sum of local Household purchases per dollar of Output, based on Labor Income payments made by the target Industry and the local Industries from which they purchase.
      2. For Employment, the Effect represents the number of jobs supported in local Industries per $1,000,000 of Direct spending in the target Industry as a result of Household purchases derived from Labor Income payments throughout all rounds of the impact.
      3. Labor Income Effect represents the value of Labor Income dollars per $1,000,000 of Direct spending in the target Industry in local Industries as a result of Household purchases derived from Labor Income payments throughout all rounds of the impact.
      4. Value Added Effect represents the Value Added dollars per $1,000,000 of Direct spending in the target Industry in local Industries as a result of Household purchases derived from Labor Income payments throughout all rounds of the impact.
    4. Total Effects are the sum of the Direct, Indirect, and Induced Effects. For Output, this value is the same as the SAM Multiplier.

 

HOW MULTIPLIERS ARE CREATED:

While the complex process of creating the Social Accounting Matrix is not described here, the results of those calculations are a complete transactions table showing what every Industry needs to purchase in order to make its products and the value of every Industry’s labor payments (Labor Income), taxes (Taxes on Production & Imports), and profits (Other Property Type Income) and what each Household income group buys.

We also know how much of each commodity is produced locally, which Industries or Institutions produce it in the local economy, and how much of the production is attributed to each producer.

The combination of these two factors allows the software to determine, based on the entered or estimated value of Industry Sales, how much of each commodity will be required to meet the change in production of the target Industry (Gross Absorption) and how much can be obtained from local vendors (Regional Absorption). After multiple rounds of purchases are accomplished and all the spending not attributed to local vendors is lost from the system, the resulting values spent locally on each commodity can be summed to show the total purchasing requirements for that commodity from the local economy in dollars and cents. These results can be viewed in the Detailed Multipliers sheet.

 

AVERAGE OUTPUT MULTIPLIER RANGE: 

Typically we expect Output Multiplier ranges to follow this general pattern:

  1. at a county level an Output Multiplier is between 1-2.
  2. at a state level an Output Multiplier is 2-3 and
  3. at a national level the expected range is 2-7.

However, individual regions may vary greatly depending on their concentrations of activity. 

 

AGGREGATE MULTIPLIERS: 

Multiplier specificity is a key to accuracy within an analysis. The more dissaggregate an Industry specification is the more accurate the results of the analysis will be, as the Multiplier for each Industry reflects:

    1. the target Industry’s specific purchasing pattern,
    2. its specific relationships for Labor Income / Worker
    3. its specific relationships for Output per Worker
    4. its specific relationships for Other Property Type Income / Output
    5. its specific relationships for Taxes on Production & Imports / Output

However, there are times when it may be necessary to aggregate Industries together in order to perform an analysis. Please read more about Aggregation Bias and Aggregating Industries if you are unable to attach your dollar value to a specific Industry Sector in IMPLAN.

 

USAGE:

Unless you have a significant background in using Multipliers in analysis, we highly recommend letting IMPLAN do the analysis for you or using the existing multipliers to help you tell your story.

If you are looking to use IMPLAN Multipliers in a different tool, this requires a custom license. We would be happy to work with you to create a license that meets your needs. Please give us a call at 800-507-9426.

Intermediate Expenditures

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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. These inputs are sometimes referred to as current-account expenditures. They do not include any capital-account purchases nor do they include the inputs from the primary factors of production (capital and labor) that are components of value added. (BEA)

Summary Description of Elements of the IxC Social Accounting Matrix

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Industry Column

  • Payments to the commodity row represent the use of locally-produced commodities (both goods and services) by local industries, without any information as to which industries or institutions were involved in the production of said commodities. These commodity purchases come from all industries and institutions that produce that commodity, according to the market share matrix – i.e., the primary producing industry, any industries that produce the commodity as a secondary by-product, and any institutions that produce that commodity (government, inventory, etc.).  Use of imported goods and services show up in the industry columns’ payments to the trade rows. 
  • Payments to the factors (EC, PI, OPI, and TOPI) represent factor income (payments to employees, interest, profits, taxes, etc.)
  • Payments to the trade rows represent gross import of goods and services for intermediate use by industry.
  • There will be no payments to government; in the IxC SAM, the purchase of inputs produced by the government are included in the payments to the commodity row.
  • There will be no payments to inventory; in the IxC SAM, the purchase of inputs taken out of Inventory are included in the payments to the commodity row.
  • There will be no payments to capital row (see explanation in Capital column section below)
  • Column total = Total Industry Output (TIO).

Commodity Column

The Commodity column shows the value of production by the producing row that is consumed locally. Production not consumed locally (exports) appears in the trade columns’ payments to the industry rows and producing institutional rows.  

  • Payments to Institutions represent institutions selling commodities (e.g., sales of timber by the U.S. Forest Service, sales of grain from crop price support programs, inventory sales, and household production of Scrap).  
  • Payments to the capital row represent Scrap and Used and secondhand goods (i.e., the decommissioning and “recycling” of structures and equipment). These payments reflect the fact that capital is a source of the commodities, for example, when a building is torn down and sold for parts.
  • The column total does not equal total commodity output (TCO) because some commodity output is accounted for in the trade columns’ payments to the producing institutions’ rows.
  • Payments to the inventory row represent the sum of net inventory deletions for domestic use for those commodities for which there were net deletions from inventory.

 

Employee Compensation Column

Employee compensation in IMPLAN is the total payroll cost of the employee paid by the employer.  This includes wage and salary compensation, all benefits (e.g., health insurance, retirement), and both employee- and employer-paid social insurance taxes.

  • Payments to the household rows include:
    • Wages and salaries paid to local residents, net of social insurance taxes
    • Benefits and other non-wage compensation
  • Payments to Government include:
    • Federal wage accruals less surplus. This occurs at the end of the accounting period if there are wages that workers have earned but not received.
    • Employee contributions to social insurance
    • Employer contributions to social insurance
  • Payment to private enterprise: If employees earned more than they were paid for the accounting period, the households have not yet received the compensation – the money is still being held by the company and is reported here.
  • Payments to domestic trade represent gross compensation of non-local domestic workers. If the value is 0, then no in-commuters work in this region.  
  • Payments to foreign trade represent gross compensation of foreign workers. It includes estimates of foreign professional workers and undocumented migratory workers employed temporarily in the U.S. 

 

Proprietor Income Column

  • Payments to Household rows represent self-employed income not including social insurance payments.
  • Payments to Government include proprietor payments of social insurance tax. Note that in the definition, for proprietors, employee and employer are the same.
  • There are no payments to trade as, by definition, all proprietors are local.

 

Other Property Income Column

  • Payments to Households include:
    • Rental income with a capital consumption allowance (CCA) and a capital consumption adjustment (CCAdj). This is payment to households primarily for rental properties from the real estate and owner-occupied dwelling sectors.  CCA is a bookkeeping calculation of depreciation.  CCAdj is the difference between tax depreciation (tax return based capital consumption allowances) and real depreciation (capital consumption based on replacement cost).
    • Net business transfer payments to persons (e.g., corporate gifts to individuals and charities, medical malpractice payments, non-catastrophic insurance settlements for normal losses beyond expected values). Note that settlements for catastrophic losses are considered capital transfers rather than current business transfers and therefore are not included in a current-accounts SAM.
    • Net interest from industries (interest paid by industries to households less interest paid by households to industry). Interest paid by industries to households includes savings interest, bond interest, pension payments, and life insurance interest. Interest paid by households to industry consists primarily of payments for mortgage and loans (these are counted as interest paid by businesses since homeownership is treated like a business in the NIPA accounts).
  • Payments to Enterprises are corporate profits.
  • Payments to capital include:
    • Consumption of fixed capital, i.e., depreciation with a capital consumption adjustment.
    • The region’s share of the NIPA statistical discrepancy, the discrepancy in GDP when measured by the income approach versus the production approach.
  • Payments to Government include:
    • Current transfer payments from business to government consist of deposit insurance premiums, fines, fees such as regulatory and inspection fees, settlements received from tobacco companies, donations, and net insurance settlements paid to governments as policyholders. [1]
    • Net income for government enterprises (i.e., government enterprise surplus less government enterprise subsidy).
    • Rents and royalties.
  • Payments to trade include:
    • Net business transfers to foreign sources; if negative, it implies a net payment from foreign sources to local businesses. The primary component is net insurance settlements.
    • Income payments representing net payments on assets (e.g., interest and dividends) paid to the rest of the world.
    • In the case of payments to domestic trade, there is no NIPA data corresponding to these elements at the U.S. level. So, at the sub-national level, it is a balance to ensure that the OPI column sum (OPI payments) equals the OPI row sum (OPI receipts). It therefore is a balance between the region and the rest of the U.S., and includes both net business transfers and net income payments.  If one sums this value for all states, it will be zero.

 

TOPI (Taxes on Production and Imports Net of Subsidies) Column

  • Payments to Federal government include excise taxes and customs duty. Excise taxes include gasoline, alcoholic beverages, tobacco, diesel fuel, air transport, crude oil windfall profits tax, among others.
  • Payments to State and Local government include sales tax, property tax, motor vehicle license tax, severance tax, and other taxes. The property tax paid by TOPI includes payments from both households and businesses. Since home-ownership is treated as an industry, payment of real estate property taxes comes from the owner-occupied dwelling sector’s TOPI. Non-taxes consist of business licenses.

Household Columns

  • Payments to the commodity rows include final demands for locally-produced commodities.
  • Payments to the household rows include personal interest payments include all interest payments by persons, not just inter-household payments for things like personal notes, contracts for deed, and other inter-household loans.  The SAM represents them all as inter-household payments since all interest income ultimately ends up in a household account. 
  • Payments to Federal government include:
    • Personal taxes, the primary component of which is Federal income tax [2]. With earned income credits and repayment of withheld income in a following year, lower-income household groups may receive more than they pay yielding a negative value in this cell.
    • Personal transfers, which include fines and donations to government.
    • Purchases of commodities produced by the administrative Federal government are not included here; rather, they are included in the payments to the commodity rows.
  • Payments to State and Local government includes:
    • Personal taxes, the primary component of which is federal income tax.
    • Personal property taxes. These do not include home property taxes but rather property taxes for other high-value items like cars and boats [3]. 
    • Purchases of commodities produced by the administrative State and Local Government are not included here; rather, they are included in the payments to the commodity rows.
    • Personal motor vehicle license fees.
    • Personal transfers, which includes fines and donations to government.
  • There are no payments to inventory; the purchase of goods taken out of inventory are included in the payments to the commodity rows.
  • Payments to the capital row represent net savings.
  • Payments to the trade rows include:
    • Purchases of imported goods and services.
    • Transfers to rest-of-world households (e.g., personal remittance payments).

Government Columns

  • Payments to the commodity rows include purchase of locally-produced goods and services, as well as payments to labor and consumption of fixed capital via the government payroll sectors. This payroll is then transferred to EC and OPI via those payroll sectors.
  • Payments to the household rows include:
    • Net interest (on bonds and securities)
    • Social benefits (e.g., social security, veterans’ benefits, food stamps, student aid, etc.)
  • Payments between government accounts represent intergovernmental transfers, which are how Federal Defense, Federal Investment, State and Local Education, and State and Local Investment are funded. For example, State and Local Education is funded via intergovernmental transfer payments from State and Local Non-Education, and Federal Defense is funded via intergovernmental transfer payments from Federal Non-Defense.  Such transfer payments are reflected in the SAM.   
  • Federal payments to State and Local government include grants-in-aid (e.g., highway funds for interstates).
  • Payments to capital represent net savings.
  • Payments to domestic trade include domestic imports of goods and services.
  • Payments to foreign trade include:
    • Foreign aid
    • Foreign imports of goods and services

 

Private Enterprise Column

The private enterprise institution represents incorporated businesses (not proprietorships).  It receives income in the form of returns to capital and depreciation allowances.  Enterprise income consists entirely of corporate profits.

  • Payments to Households represent dividends
  • Payments to Government include:
    • Corporate profit taxes
    • Dividends (from retirement and other investment accounts).
  • Payments to capital represent retained earnings, which can be saved for future investment, share buy-backs, dividend payments, etc. Note that this is not an indication of how much industry investment occurred that year because not all of this amount is necessarily invested in that same year and, conversely, more than this amount could be invested in the same year via borrowing.
  • Payments to foreign trade represent corporate profit tax paid abroad.

 

Capital Column

  • Payments to commodities represent purchases of regionally-produced capital goods (in I-O models, investment is outside the USE matrix; that is, investment is treated as a final demand).
  • In the IxC SAM, payments to institution rows represent net dis-savings (borrowing) by the institution. This can be borrowing from past income (e.g., drawing down retirement accounts) or borrowing from hoped-for future income (e.g., building up debt). Payments from an institution column to the capital row represent net savings by the institution (which can be paying into a savings account or paying down debt). 
  • Payments to the commodity rows include total investment in locally-produced capital goods by all industries. The data do not exist in IMPLAN to separate out the amount of investment by a specific industry.
  • Payments to trade include:
    • Imports of capital goods.
    • Net savings from outside of the region. This is a “balance of trade”.
      • In a national model, if more money leaves the country via imports than comes into the country via exports, then the U.S. is, on a net basis, borrowing money from the rest of the world and there will be a payment from the capital column to the foreign trade row. If it is the reverse, there will be a payment from the foreign trade column to the capital row. 
      • In a sub-national model, the same is true of payments between capital and domestic trade.
    • Net capital transfers from abroad.
  • Payments to inventory represent economy-wide net inventory change in the form of the capital column’s payment to inventory (if there were net additions) or the inventory column’s payment to capital (if there were net deletions).

 

Inventory Column

  • Payments to the Commodity row represent the sum of the inventory additions from domestic sources for those commodities for which there were net additions to Inventory. If all commodities made net deletions from inventory, the payment from Inventory to Commodity will be 0 and the payment from Inventory to Capital would be that total net deletion value.   If any commodity makes a net addition to inventory, there will be a positive payment from Inventory to Commodity. 
  • Payments to the trade rows represent the sum of the additions to inventory of intermediate inputs from sources outside the region, for those commodities for which there were net additions to Inventory.
  • Payments to capital represent economy-wide net inventory change: the Inventory column’s payment to Capital (if there were net deletions) or the Capital column’s payment to Inventory (if there were net additions).

 

Domestic Trade Column

  • Payments to the industry rows represent the domestic export of goods and services.
  • Payments to the household rows include:
    • Gross compensation paid to local workers by non-local regional companies (i.e., gross out-commuting).
    • Domestic export of goods and services produced by households.
  • Payments to the other institution rows represent the export of goods and services produced by government, capital, and inventory.
  • Payments to capital include:
    • Export of goods and services produced by capital, which consists of Scrap and Used and secondhand goods.
    • Net savings (i.e., investment) from the rest of the U.S. (net domestic balance of trade).  If working with a U.S. model, any value in this cell should be very small and is a residual of the SAM balancing process.

 

Foreign Trade Column

  • While strictly speaking all purchases of commodities in an IxC SAM should be recorded as payments to the commodity rows, in the current version of IMPLAN the foreign trade column makes commodity purchases directly from the producing industry or institution. Thus, payments to the industry rows represent the foreign export of goods and services produced by industries in the region.
  • Payments to the household rows include:
    • Gross compensation paid to regional workers by extra-regional companies (i.e., gross out-commuting)
    • Foreign export of goods and services produced by households.
  • Payments to government and inventory represent the foreign export of goods and services produced by government and inventory.
  • Payments to capital include:
    • Export of goods and services produced by capital, which consists of Scrap and Used and secondhand goods.
    • Net savings (i.e., investment) from the rest of the rest of the world (net foreign balance of trade).
  • Payments to capital represent net foreign savings (net foreign balance of trade).
  • Payments to Trade are trans-shipments (imports to re-export).

 

Summary Description of Elements of the IxI Social Accounting Matrix

Interpretation of the IxI SAM is nearly identical to that of the IxC SAM except that commodity production has been re-assigned from the commodity rows to the rows of the producing Industries and Institutions.  Thus, payments to the industry rows will include not just exports but also local use, and payments to institutions will include not just transfer payments but also the purchase of goods and services produced by those institutions.  The capital institution, for example, will see additional payments to itself that are not present in the IxC SAM.  The capital institution produces Scrap and Used and secondhand goods, which, when purchased by an industry, is represented in the IxI SAM as a payment from that industry to the capital row; these payments represent the purchase of Scrap and Used and secondhand goods, not capital investment.  There are no payments to capital in IMPLAN that represent capital investment.

 

 

Written April 5, 2014

 

[1] http://www.bea.gov/national/pdf/mp5.pdf

[2] Personal current taxes are payments, net of refunds, made by persons that are not chargeable to business expense. Personal current taxes consist of taxes on income, including realized net capital gains, taxes on personal property (not for homes but other high-value items like boats and cars), payments for motor vehicle licenses, and several miscellaneous taxes, licenses (e.g., hunting and fishing licenses), and fees. Social Security and Medicare taxes are excluded from personal current taxes.  They are treated as an employer (or employee or self-employed) contribution for government Social Insurance.  Personal current taxes also exclude taxes on real property, sales taxes, and certain penalty taxes. Taxes on real property paid by persons, except those primarily engaged in the real estate business, are treated as a business expense that is deducted from both gross monetary rental income and gross imputed rental income in the derivation of net rental income. Real property taxes paid by persons primarily engaged in the real estate business are also treated as a business expense and are deducted in the derivation of proprietors’ income. Sales taxes are included in personal consumption expenditures. Penalty taxes such as the penalty tax on early IRA withdrawals are treated as a personal current transfer payment to government (source: BEA’s Local Area Personal Income and Employment Methodology, April 2012).

[3] Since home-ownership is treated as an industry, payment of real estate property taxes comes out of the owner-occupied dwelling sector’s TOPI.