Using the Regional Input-Output Modeling System (RIMS II) Ian Mead, Ph.D. C2ER Annual Conference Oklahoma City June 7, 2012

Overview ▪ Recent developments  Increased use of RIMS II  More diverse set of customers ▪ Improved guidance  Recent working papers  RIMS II User’s Guide 2

User’s Guide: Goals ▪ Highlight model’s assumptions ▪ Encourage:  Use of knowledge on local economy  Viewing results in relation to other studies  Transparency  Robustness checks 3

User’s Guide: Development ▪ Request customer feedback ▪ Review existing impact studies ▪ Develop “in-house” analyses ▪ Analyze sensitivity of results 4

User’s Guide: Features ▪ Focus on most important decisions ▪ Step-by-step instructions ▪ Realistic examples ▪ Margin notes 5

User’s Guide: Content ▪ Relation to other tools ▪ Model’s assumptions ▪ Basic application ▪ Special topics 6

Special topics ▪ Purchases  Retail sales  Investment  Government ▪ Decomposing impacts ▪ Industries  Tourism  Construction 7

Tourism ▪ Need detailed industry information ▪ Need retail margins ▪ Concerns with short-term events 8

New advertising campaign ▪ Final-demand change  $21.5 million in new tourist spending ▪ Final-demand industries  Lodging, meals, entertainment, etc. ▪ Final-demand region  Branson, Missouri, µSA 9

Tourist purchases Industry Local purchases Accommodations7,000 Food services and drinking places5,750 Entertainment4,750 Performing arts, spectator sports, museums, zoos, and parks3,500 Amusements, gambling and recreation1,250 Retail trade3,250 Apparel, leather, and allied products2,500 Motor vehicle fuels, lubricants, fluids750 Administrative and support services375 Other transportation and support activities375 Total21,500 10

Retail margins Commodity Local retail sales U.S. share Local retail margin Apparel, leather, and allied products2, Motor vehicle fuel Total3,250….1,144 11

Earning impacts Industry Local purchases Earnings multiplier Earnings impact Accommodations7, ,780 Food services and drinking places5, ,363 Entertainment4, Performing arts, spectator sports, museums, zoos, and parks 3, ,249 Amusements, gambling, and recreation1, Retail trade1, Apparel, leather, and allied products1, Motor vehicle fuels, lubricants, fluids Administrative and support services Other transportation and support activities Total19,394….8, Margins

Construction ▪ Recommend bill-of-goods method  Broad range of activities  Specialized, non-local labor ▪ Special considerations  Subcontracting: Separate out labor costs  Banking services: About 2 percent of loan value 13

Highway construction ▪ Final-demand change  $100 million contract ▪ Final-demand industry  Construction ▪ Final-demand region  Greensboro, North Carolina, MSA 14

Intermediate inputs IndustryPurchases Stone mining7,000 Petroleum refineries10,000 Asphalt paving7,500 Ready-mix concrete750 Banking services2,000 Machinery repair and maintenance4,000 Total31,250 15

Local supply conditions Industry Prod- uction Truck transport- ation Whole- sale trade Retail trade Stone miningYes No Petroleum refineriesNo YesNo Asphalt pavingYesNo Ready-mix concreteYesNo Banking servicesYes……… Machinery repair and maintenanceYes……… 16

Retail margin: Stone mining CategoryU.S. costU.S. share Local output Producer value1, ,020 Truck transportation1, ,576 Other transportation Wholesale margin Retail margin Purchaser value2,

Output impact 18 Industry Local purchases Output multiplier Output impact Stone mining4, ,838 Asphalt paving7, ,793 Ready-mix concrete ,119 Banking services2, ,580 Machinery repair and maintenance4, ,273 Truck transportation2, ,016 Wholesale trade Subtotal21, ,401 Final demand change ,000 Total21, ,401 Gravel Special fuel Production cost

Thank you Ian Mead, Ph.D. Chief, Regional Product Division Bureau of Economic Analysis Phone: