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How to Run a Basic Input-Output Scenario
How to Run a Basic Input-Output Scenario
Updated over a week ago

Input-Output (I-O) scenarios are run for "what if?" situations, such as business expansion or a company closing down. The I-O model takes what we know (like the number of jobs being lost or gained), and shows the ripple effects on other industries in the region.In this tutorial, we'll look at the impact of adding 300 jobs to the Petrochemical Manufacturing industry in Houston, TX. This would be applicable if we knew that a certain company was planning on adding 300 jobs, and we'll find out what other impact that would have on the Houston economy.

  1. Start by clicking Input-Output from the homepage

  2. Select Input-Output Scenario

  3. Under “Select a Region” enter the region you’d like to use (by county, city, MSA, state, or nation) and select it from the list. In this example we will use the Houston-The Woodlands-Sugar Land, TX MSA.

    1. IMPORTANT: Input-Output scenarios are extremely dependent on the correct region being used. I-O situations require that a functional economic area be used when modeling changes to an economy. MSAs are typically good proxies for these regions.

  4. Under “Add 6-digit Industries to Scenario” enter the industry you’d like to change. In the video below, we use Petrochemical Engineering (325110).

  5. You’ll see your selected industry appear below, along with a dropdown menu to adjust Jobs, Earnings, or Sales figures. We’ll adjust jobs in this case, so in the box marked “Change” we’ll enter 300. To model job loss, simply add a “-” before the number.

  6. Next, select a model type. In this scenario we are using the Type Lightcast model, which is best used for regional scenarios seeking to capture initial impact and subsequent ripple effects. For more information on the three types of models and what they are used for, read this article.

  7. Click Run.

Now we can see the results of adding 300 jobs in Petrochemical Manufacturing to the Houston MSA. A total change in earnings of over $274M, plus 3,636 total jobs added to the economy, and an average earnings per job of over $71M. These changes are the results of different multipliers, seen beneath the totals.

We can also click Show Job Distribution at the bottom to see more detail on which industries, occupations, or demographics will add those jobs in the region.

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