Appendix B: Implan
Implan Overview
SDS undertook an economic and fiscal impact analysis based on the anticipated gross impacts of the project using IMPLANalong with a fiscal analysis based on existing tax rates in the project’s region (city, county, state) and at the federal level.Below is a list of terms used in this report.
Implan
IMPLAN is a computer-based input-output modeling system used by over 1,500 federal, state and local agencies, research universities and non-profit organizations. An input-output model is a representation of the flows of economic activity between sectors within a region. The model captures what each business or sector must purchase from every other sector in order to produce a dollar’s worth of goods or services. Using such a model, flows of economic activity associated with any change in spending may be traced either forward (e.g., spending generates employee wages which induce further spending) or backward (e.g., visitor purchases of meals lead restaurants to purchase additional inputs – groceries, utilities,etc.). Multipliers for a region may be derived from an input-output model of the region’s economy. With IMPLAN, one can estimate I-O models of up to 528 sectors for any geographic region. IMPLAN includes procedures for generating multiplier sand estimating impacts by applying final demand changes to the model.
Direct Economic Impact
Direct economic impact represents expenditures made by a project, including the wages and salaries of project employees.For each investment project, a calculation is made of the direct impact of the project during construction and operations.
Note: Once actual numbers from the project are obtained, estimates are replaced with real numbers.
Indirect Economic Impact
A project’s injection of new money into the local economy generates a ripple effect, or multiplier, which creates income and jobs for individuals not directly associated with the project. Indirect impact represents the value of a project’s impaction other businesses, industries and households in the region’s economy. For example, a project may purchase supplies from several companies in the region. Businesses receiving this income spend or invest within the region which leads to increases in income and spending by other businesses and individuals. Indirect impacts are estimated with models developed using IMPLAN data and software.
Induced Economic Impact
Induced economic impact is a ripple effect that is represented by changes in spending from households that are directly or indirectly related to the project. For example, a project employee spending a portion of her salary on an electronic purchase will induce electronic store employees to spend a portion of their salaries on clothing, and so on. Induced impacts are estimated with models developed using IMPLAN data and software.
Economic Output
Economic output represents the total value of production, commonly measured using revenues. Direct, indirect and induced output projections are utilized throughout this report.