Minnesota IMPLAN Group, Inc.

From Wikipedia, the free encyclopedia

Minnesota IMPLAN Group, Inc.
Type Corporation
Founded 1993
Headquarters Stillwater, Minnesota
Industry Economic Information Technology
Products Software and Data for economical impact analysis
Website www.IMPLAN.com

Minnesota IMPLAN Group, Inc. (Commonly referred to as MIG) provides software and data for economic impact analysis using the Input-output model. IMPLAN (IMpact analysis for PLANning) techniques can be used in an attempt to measure the effect on a regional or local economy of a given change in economic activity.[1] It allows the user to build economic models estimating future effects of similar changes on communities. The IMPLAN database contains county, state, and federal economic statistics.[2]

--For a synopsis of IMPLAN and its uses that avoids the economic lingo, see the article "The Number Factory" listed in the links below.

Contents

[edit] Why It Exists

There was a lack of useful and timely information on regional communities creating a demand for economic data collection and reporting systems. There was already effective statistical gathering and reporting techniques for the national economy through the federal government, but those methods did not provide detailed data for local economies.[3]

The 1976 National Forest Management Act required the USDA Forest Service to create 5-year management plans. These plans required alternative land management options, each of which have potential resource outputs (timber, range, mining, recreation) as well as socio-economic effects on local communities resulting from the proposed resource outputs. The Forest Service, in cooperation with FEMA, contributed considerable resources to the creation of FORPLAN (a linear programming model to estimate the land management resource outputs) and IMPLAN to estimate the economic effects on local communities.[4]

[edit] History

IMPLAN Professional Version 2.0
image:Implan_pro_logo.jpg‎
Design by Minnesota IMPLAN Group, Inc.
Initial release 1999
Genre Economic Information Technology
Website http://www.IMPLAN.com

In 1988 the Agricultural Economics Department of the University of Minnesota took responsibility for providing IMPLAN software, data, and technical support for all non Forest Service users on a fee basis.

Minnesota IMPLAN Group, Inc. was founded in 1993 as an outgrowth of the work at the University of Minnesota starting in 1984. This developmental work closely involved the U.S. Forest Service's Land Management Planning Unit in Fort Collins the University of Minnesota. At first, MIG, Inc. focused on database development and provided data that could be used in the Forest Service version of the software. In 1995 MIG, Inc. took on the task of writing a new version of the IMPLAN software from scratch. This new version extended the previous Forest Service version by creating an entirely new modeling system that included creating Social Accounting Matrices (SAMs) – an extension of input-output accounts, and resulting SAM multipliers. IMPLAN Pro 2.0 became available in May of 1999.[4]

[edit] How it Works

Social Accounting- IMPLAN's Social Accounting System describes transactions between producers, intermediate, and final consumers. The Social Accounts also include non-market transactions such as transfer payments between institutions. Examples include government to household transfers for unemployment benefits or household to government transfers in the form of taxes. It is effectively a snapshot picture of the economy and its spending patterns.

Multipliers- "Multipliers are a numeric way of describing the impact of a change. An employment multiplier of 1.8 would suggest that for every 10 employees hired in the given industry, 18 total jobs (in all sectors) would be added to the given economic region."[2]

The Social Accounting System provides the framework for the predictive multiplier model used in economic impact studies. Purchases for final use drive the model. Industries produce goods and services for final demand and purchase goods and services from other producers. These other producers, in turn, purchase goods and services. This buying of goods and services continues until leakages from the region stop the cycle. The multiplier model is derived mathematically from this buying and spending pattern using the Input-output model. There are three types of effects measured with a multiplier: the direct, the indirect, and the induced. The direct effect is the initial change in final demand, the indirect effect is the business to business transactions required to satisfy the direct effect, and the induced effect is driven by the local spending on goods/services by the people working to satisfy the direct and indirect effects.[5]

  1. Direct effects take place only in the industry being immediately affected. If DEMCO lays off 39 employees, the manufacturing industry loses 39 employees.
  2. Indirect effects concern inter-industry transactions. Because DEMCO is closing, they will no longer demand the locally produced supplies they needed to produce their product. This will affect all of their suppliers.
  3. Induced effects measure the effects of the changes in household income. These employees may not eat out or shop as much as they normally would have since they are no longer employed. These changes affect the related industries.[2]

[edit] References

  1. ^ Pearce, David (1989). Modern Economics, Third Edition. pg 189: The Mackmillian Press LTD. 
  2. ^ a b c McIntosh, Chris. The Regional Economy. 
  3. ^ Maki, Wilbur; Richard Lichty (2000). Urban Regional Economics. pg 5, 233: Iowa State University Press. 
  4. ^ a b IMPLAN Model. Retrieved on 2007-06-20.
  5. ^ IMPLAN Pamphlet, 06/04/08

[edit] See also