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A Synopsis of Methodological Variations in Economic Contribution Analyses for Forestry and Forest-Related Industries in the US South


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The forest products sector plays an important role in regional economies in the United States. Although direct economic contribution values are relatively easy to estimate and compare across states, several modeling- and data-related assumptions used in contribution analysis create variations among states that can be difficult to explain. Economic contribution analysts were surveyed to understand variations in methodologies used in conducting economic contribution analysis of the forest products sector. Survey results suggest that although analysts were generally consistent with direct effect sector selection of traditional forest industries (e.g., logging and sawmills) in the IMPLAN sector scheme, several variations were noted in decisions to include or exclude nontraditional forest industries that produce engineered wood products, among others. Likewise, there were subtle differences in opinions on which institutions to include in the social accounting matrix. Some policy-related suggestions were provided for consistent reporting.

Management and Policy Implications This study clearly discloses several assumptions used by analysts in their economic contribution analysis and opens academic discussion on which assumptions best accurately reflect economic contribution analysis. These discussions are important as contribution analysis reveals the economic footprint of the industry, and the information can be used to advocate for industry-friendly federal and state policies. It is possible that as a result of networking among forestry professionals who conduct economic impact or contribution analysis, ad hoc solutions may have led to different approaches used in respective states or subregions within the Southeast and possibly in other regions of the United States. Despite a few caveats noted earlier, our goal was to summarize existing practices among analysts as relates to their model assumptions, matrices selection, data sources, and preferred outreach materials. Many practitioners in the Southeast region use IMPLAN software, and this research provides a starting point for the development of common standards for those estimating and disseminating economic contribution analysis for forestry and forest product industries. To this end, we believe that regional institutions such as Southern Regional Extension Forestry (SREF) and Southern Group of State Foresters (SGSF) will review the study findings and benefit from our primary narratives. Finally, although this research focus was on the southern United States, because most states use IMPLAN for forestry-sector contribution analysis, these results have nationwide implications.
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Keywords: IMPLAN; input-output modeling; multipliers

Document Type: Research Article

Publication date: March 1, 2017

This article was made available online on January 5, 2017 as a Fast Track article with title: "A Synopsis of Methodological Variations in Economic Contribution Analyses for Forestry and Forest-Related Industries in the US South".

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