Recently in Research Category

Iron Range Report Available Online!

As some of you know, last summer I worked with Adam Pine and five students from UMD's Department of Urban and Regional Studies on a research report about population migration and quality of life in several communities on Minnesota's Iron Range. I'm pleased to announce that it has been completed and posted on the department's website at:
So far the report has been useful for several organizations on the Range and we've been getting very positive feedback from those that have checked it out. Feel free to have a gander when you have an opportunity.

Economic Census Update

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At a recent Market Area Profile workshop in West Central MN, I was presenting results of a retail gap analysis done with 2002 economic census numbers (adjusted for inflation). Although I defended the results based on this dated information to some degree with the notion that consumption patterns do not change greatly over time, really the participants were right in looking for the most up to date information.

Luckily, 2007 Economic Census results were released this summer and provide a great view into the changing consumption patterns of the american public and the relative importance of american industries. You can access a quick look into the economic census results through their "Industry Snapshots":
View image

How has the per capita spending on used cars changed from 2002 to 2007? Are there more newsstands in 2007 than 2002? The answer is "no." Hopefully this goes beyond simple trivia about different industries, but instead becomes a quick resource we can share with those private businesses looking for some basic benchmarks or community members looking for some basic information on what's viable in their community. We'd rather our businesses and communities not invest in today's equivalent of a buggy whip plant, but those industries and store formats which will remain a viable part of today's economy.

Income and Economic Impacts with IMPLAN


Hopefully, everyone is aware that IMPLAN calculates economic impacts based on labor income. Impacts associated with spending by labor are called "indirect" effects in IMPLAN. You can, in theory, create an IMPLAN report by entering a change in labor income.

For example, if the hospital increases wages by $2 million, what is the economic impact in the community? This is all driven off labor income, not jobs or output. Those do not change in this scenario.

The question is, what is the direct effect in IMPLAN? How does IMPLAN treat a labor income change? For example, what about in-commuters? They drive in to work and take their salary home. Do I have to adjust the labor income change for them? Or what about taxes? Does IMPLAN account for a percent that goes to taxes or do I have to adjust labor income for those too?

Here's what I learned:

"Leakages from labor income include payments to social insurance (social security, medicare, unemployment contributions paid by both the employee and the employer) and incommuters, the remainder go to local households. Leakages from household spending include income taxes, savings and imported goods and services. The remainder is purchase of local goods and services and is significantly smaller than the original labor income value.
Also, this first round of local spending is "output", the labor income required to produce this new demand is even smaller.

Remember that retail industry purchases are margined, so only the gross margin is guaranteed to be local, the producer value may or may not be from a local manufacturer." - Posted to IMPLAN user's forum by Doug Olson

My interpretation: IMPLAN accounts for leakages to non-local suppliers and to in-commuters.

It raised a second question for me - how do they calculate the percent going to in-commuters. I found this on the forum (also from Doug):

"Currently commuting flows are based on the REIS residence adjustment, adjusted by national "alien" workforce ratios. These values are net values. The current MRIO only internalizes the interregional industry purchases. We are working to introduce the commuting to the Multi-region model"

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