A comparison of two input-output approaches for investigating regional economic impacts of the forest products industry in the Pacific Northwest and the South

An input-output analysis using IMPLAN was employed to examine forest-based industry contributions to regional economies of the South and Pacific Northwest regions of the United States and to illustrate differences between the standard “per dollar” approach of input-output modeling and a “per unit of output” approach. The total regional impact of the forest-based industry on the South’s economy is approximately five times that of the industry in the Pacific Northwest. The industry’s impact as a percentage of the regional economy is substantially higher in the Pacific Northwest. Output, employment, personal income, and value-added multipliers were computed to depict marginal economic impacts due to changes in output on a per dollar basis. With the exception of employment, the industry in the South has higher multipliers than the industry in the Pacific Northwest. The incremental impacts per million board feet (MMBF) of timber delivered by each region’s logging sector to forest-based industries were computed. Incremental impacts to the Pacific Northwest economy per MMBF change in the amount of timber delivered are greater than in the South. Comparing regional economic impacts employing standard multiplier analysis can be misleading because of regional differences in input and output values. Examining incremental contributions to regional economies from per unit changes in forest-based industry demand for timber on a per MMBF basis more accurately illustrates the effects of changes in national timber harvest policy.

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