IMPLANS INDUCED EFFECTS IDENTIFIED THROUGH MULTIPLIER DECOMPOSITION

An analysis of regional multipliers is developed to reveal a structura l flaw in how IMPLAN computes induced effects. This analysis reveals a fixed ratio across sectors between total and Type I employment multip liers, and that IMPLAN's ''Type III'' income multipliers are inversely related to the average wages in the direct and indirect sectors, and that ''Type III'' output multipliers are not affected by wages. A mult iplier decomposition is developed that separates direct and indirect e ffects from the induced and further separates the induced impact into relative wage and regional income retention effects. The decomposition is useful in making comparisons among impact models.