Glossary

Contribution (economic)
The gross change in economic activity associated with an industry, event, or policy in an existing regional economy.

Employee compensation
Comprised of wages, salaries, commissions, and benefits such as health and life insurance, retirement and other forms of cash or non-cash compensation.

Employment
A measure of the number of jobs involved, including fulltime, part-time and seasonal positions. It is not a measure of fulltime equivalents (FTEs).

Exports
Sales of goods to customers outside the region in which they are produced, which represents a net inflow of money to the region. This also applies to sales of services to customers visiting from other regions.

Final Demand
Sales to final consumers, including households, governments, and exports from the region.

Gross Regional Product (GRP)
A measure of total economic activity in a region, or total income generated by all goods and services. It represents the sum of total value added by all industries in that region, and is equivalent to Gross Domestic Product (GDP) for the nation.

IMPLAN
A computer-based input-output modeling system that enables users to create regional economic models and multipliers for any region consisting of one or more counties or states in the United States The current version of the IMPLAN software, version 3, accounts for commodity production and consumption for 536 industry sectors, 10 household income levels, taxes to local/state and federal governments, capital investment, imports and exports, transfer payments, and business inventories. Regional datasets for individual counties or states are purchased separately.

Impact or total impact
The change in total regional economic activity (e.g. output or employment) resulting from a change in final demand, direct industry output, or direct employment, estimated based on regional economic multipliers.

Imports
Purchases of goods and services originating outside of the region of analysis.

Income
The money earned within the region from production and sales. Total income includes labor income such as wages, salaries, employee benefits and business proprietor income, plus other property income.

Tax on Production and Imports
Taxes paid to governments by individuals or businesses for property, excise and sales taxes, but do not include income taxes.

Input-Output (I-O) model and Social Accounting Matrix (SAM)
A representation of the transactions between industry sectors within a regional economy that captures what each sector purchases from every other sector to produce its output of goods or services. Using such a model, flows of economic activity associated with any change in spending may be traced backwards through the supply chain.

Local
Refers to goods and services that are sourced from within the region, which may be defined as a county, multi-county cluster, or state. Non-local refers to economic activity originating outside the region.

Margins
The portion of the purchaser price accruing to the retailer, wholesaler, and producer/manufacturer, in the supply chain. Typically, only the retail margins of many goods purchased by consumers accrue to the local region, as the wholesaler, shipper, and manufacturer often lie outside the local area.

Multipliers
Multipliers capture the total effects, both direct and secondary, in a given region, generally as a ratio of the total change in economic activity in the region relative to the direct change. Multipliers are derived from an input-output model of the regional economy. Multipliers may be expressed as ratios of sales, income, or employment, or as ratios of total income or employment changes relative to direct sales. Multipliers express the degree of interdependency between sectors in a region's economy and therefore vary considerably across regions and sectors. A sector-specific multiplier gives the total changes to the economy associated with a unit change in output or employment in a given sector (i.e. the direct economic effect) being evaluated. Indirect effects multipliers represent the changes in sales, income, or employment within the region in backward-linked industries supplying goods and services to businesses (e.g., increased sales in input supply firms resulting from more industry sales). Induced effects multipliers represent the increased sales within the region from household spending of the income earned in the direct and supporting industries for housing, utilities, food, etc. An imputed multiplier is calculated as the ratio of the total impact divided by direct effect for any given measure (e.g. output, employment).

Other property income
Represents income received from investments, such as corporate dividends, royalties, property rentals, or interest on loans.

Output
The dollar value of a good or service produced or sold, and is equivalent to sales revenues plus changes in business inventories.

Producer prices
Prices paid for goods at the factory or point of production. For manufactured goods the purchaser price equals the producer price plus a retail margin, a wholesale margin, and a transportation margin. For services, the producer and purchaser prices are equivalent.

Proprietor income
Income received by non-incorporated private business owners or self-employed individuals.

Purchaser prices
Prices paid by the final consumer of a good or service.

Region or Regional Economy
The geographic area and the economic activity it contains for which impacts are estimated. It may consist of an individual county, an aggregation of several counties, a state, or an aggregation of states. These aggregations are sometimes defined on the basis of worker commuting patterns.

Sector
An individual industry or group of industries that produce similar products or services, or have similar production processes. Sectors are classified according to the North American Industrial Classification System (NAICS).

Value Added
A broad measure of income, representing the sum of employee compensation, proprietor income, other property income, indirect business taxes and capital consumption (depreciation), that is comparable to Gross Domestic Product. Value added is a commonly used measure of the contribution an industry makes to a regional economy because it avoids double counting of intermediate sales.