Posts Tagged 'RIMS II'

BEA Tool Allows Businesses to Estimate the Economic Impact of Disasters

When a disaster strikes, understanding the economic impact on the affected community is a key to developing a recoveryrims-cover-final plan. BEA’s regional input-output modeling, RIMS II, provides disaster recovery officials a tool to model the impact on an affected community.

For instance, if a hurricane forces the temporary closure of oil refineries, fisheries or ports in a region, the disruption could affect the overall regional economy. RIMS II provides local officials with a cost-effective way to estimate that impact on the overall regional economy.

RIMS II is already widely used in both the public and private sectors for estimating the economic impact of an event, construction project, or other change in a local economy. In the public sector, for example, state and local government officials use BEA’s regional modeling system to estimate the regional impacts of military base closings. State transportation departments use it to estimate the regional impacts of airport construction and expansion. In the private sector,  business people, analysts and consultants use BEA’s regional model to estimate the regional impacts of a variety of projects, such as the development of shopping malls and sports stadiums.

To effectively use BEA’s regional modeling system, users must provide detailed information on the initial changes in output, earnings, or employment in each region and industry affected by a disaster. For instance, a disruption may lead to a lengthy layoff of 1,500 workers at a local port. The multipliers can then be used to estimate the total impact of the disaster on regional output, earnings and employment.

Earlier this year, BEA announced some changes to the regional input-output modeling system.  The updated model will continue to produce regional “multipliers” that can be used in economic impact studies to estimate the total economic impact of a project on a region and will still be updated with new regional information on an annual basis.  The main difference is the underlying national information used in the model will be updated on a less frequent basis.  The important regional information used in the model will still be updated on an annual basis.

This is just one way BEA’s products support a key pillar of the Department of Commerce’s strategic plan. That is – ensuring “communities and businesses have the necessary information, products and services to prepare for and prosper in a changing environment.”

BEA to Release Modified Regional Input-Output Model in 2015

The Bureau of Economic Analysis plans to release in 2015 a modified economic model to replace the original Regional Input-Output Modeling System (RIMS II).  Cost savings will be realized because the modified model will be updated less frequently.

Much like RIMS II, the modified model will produce regional “multipliers” that can be used in economic impact studies to estimate the total economic impact of a project on a region.

However, the modified model will be updated with new input-output (I-O) data only for benchmark years.  That is — years ending in two and seven.  The modified model will become available to customers in 2015 and incorporate 2007 benchmark I-O data and 2012 regional economic data.

Last year, as a result of budget sequestration and reduced funding levels, BEA discontinued updates to RIMS II.  Orders for RIMS II multipliers, however, have continued to be accepted because the cost of fulfilling these orders is covered by a nominal processing fee.

After investigating ways to continue to meet the analytical needs of our customers but do so at a lower cost to BEA, the bureau decided to make a modified economic model available. Until the modified model is available in 2015, customers may continue to buy RIMS II multipliers.

New Guide Helps Regional Developers, Planners Navigate RIMS II

People who conduct or examine local or regional economic impact studies will want to read a new handbook that offers some dos and don’ts on using the Bureau of Economic Analysis (BEA) Regional Input-Output Modeling System (RIMS II).

RIMS II, a regional economic model, is most frequently used by investors, regional planners, and government officials to gauge the economy-wide impact of a change in economic activity on a local community or a particular region of the country.

The new user’s guide, titled “RIMS II: An Essential Tool for Regional Developers and Planners,” has many useful features, including:
• Nearly a dozen case studies illustrating important concepts and applications of RIMS II multipliers
• Step-by-step instructions on how to appropriately use RIMS II multipliers for many different applications
• Techniques and suggestions to overcome limitations due to missing information

One case study details a university in Austin, Texas, that decides to offer a new graduate studies program. This new program is expected to generate an additional $10 million in payments to the university and draw students from all over the country.

Using the multipliers produced by RIMS II, the new program is expected to result in $21.9 million in new sales in Austin, including the $10 million received by the university. The remaining $11.9 million in sales comes from new purchases the university is expected to make and from new university workers spending more. For example, sales are expected to grow by $97,400 for professional and technical services and $87,800 for information services.

The RIMS II model is tailored to each customer’s needs, and its multipliers are available from BEA for a small processing fee. The new user’s guide is available on the RIMS II Web site.

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