Economic Analysis of the US Wooden Pallet & Container Industry

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An Economic Analysis of the U.S. Wooden Pallet and Container Industry A‐4 A.3 Methodology for the State‐Level Analysis The first step in preparing the state-level analysis was to derive shares of production by state for each of the producing industry segments and for the downstream wholesale and retail industries. National level direct production is then allocated to the state level using employment shares taken from the BLS Census of Employment and Wages (CEW) 3 , for both the upstream and the downstream analysis. In order to calculate the indirect and induced impacts of production, we use the IMPLAN system. National industry relationships are converted to a regional level using region- specific information on trade flows, employment, and differences in the ratio of value added to output. This results in an input-output matrix which is more representative of the target state, metro area, or other defined region. When calculating indirect and induced impacts, IMPLAN makes use of Regional Purchase Coefficients (RPC's). These RPC's measure the proportion of activity that is sourced from within the state or region which is the focus of the study. Products sourced from outside the state do not provide any indirect or induced spending impacts. Upon purchasing an IMPLAN package, it is accessed via the web. For this project, we used the packages consisting of State Total Files. As mentioned above, national level direct output is shared to the states using BLS CEW data, to obtain the state-level direct output drivers. IMPLAN is then used to calculate indirect and induced output, employment, value added and earnings. 3 See BLS (2017) for more information on the CEW.

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