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BEA RIMS II Multipliers

The BEA (Bureau of Economic Analysis) developed and maintains a regional economic model that assesses total gross output, value added, earnings and employment. This regional tool provides an accurate macro economical view of a region, state and nation by objectively observing the microeconomic inputs and outputs at the county level. Each county in the United states reports the earnings-by-industry, wages-by-industry and employment-by-industry. The BEA observes this regional data and the relationships between them.

Inputs & Outputs

Understanding inputs an outputs are at the core of the BEA's economic models. Economic input is simply capital received. For example, the operating budget or the money a company spends within an industry could be considered an economic input. If Space X spends one billion dollars in a year of operation, that's an input. The output would be the affect of the input. How many times the dollars spent by Space X flow through the economy from the payments to contractors, employees, equipment, infrastructure and the continued spending by these third parties have an output effect. We call this Economic Impact.

RIMS II Multipliers

The Regional Input-Output Modeling System (RIMS II) is the name of the model that provides us the RIMS II Multipliers since the 1970's. These multipliers are commonly used to assess various projects' potential economic impact which help investors, planners and elected officials make decisions that affect local economies. The multipliers themselves are simply ratios established by the observing the relationships of gross output, value added, earnings (wages) and employment (jobs) across industries.

Units of Measurement

In order to use a multiplier, it's important to understand the units of measurement used to observe these economic relationship. In the U.S. there is over twenty trillion dollars in capital moving through our national economy. It's more feasible for economist calculate in larger units of currency. The RIMS II Model uses 1,000,000 USD as a standard unit of measurement. Using $1, $10, $100, or even $1,000 USD would require mathematical notation ultimately making it more difficult to work with larger numbers.

For Example, the RIMS II Direct Effect  Employment Multiplier for the State of Texas in the industry of Space Vehicle Manufacturing is close to 4 or 4:1 (Four to One). Four is the number of jobs employed and one is the unit of capital required to create the jobs. So for every 1,000,000 USD in economic output from the Space Vehicle Manufacturing, there will be 4 jobs. Inversely, every new 4 jobs in the aerospace industry should require $1,000,000 in economic output from the Space Vehicle Manufacturing.

Economic Impact Multipliers by Industry

RIMS II Multipliers are classified by industry. Common industries for economic development are construction and manufacturing because those are typically industries required for region growth (creation of goods, housing and commercial infrastructure) and typically have a higher multiplier for employment. Meaning, for every one million USD, on average, more jobs are required than other industries. There are 372 detailed industry multipliers in the State of Texas and the highest final demand output multiplier for the entire State of Texas is:

Child Day Care Services

This means that for every $1,000,000 of output in that industry, there are ~34 jobs in child day care services industry. Higher multipliers don't always mean better. From this, you can assume that Child Day Care Services is not a very high paying industry based on how high the number is for every $1 Million USD of economic output.

Types of RIMS II Multipliers

Final Demand and Direct Effect Employment Multipliers are the two types of multipliers provided by the BEA.


Final Demand Output - Total industry output per $1 change in final demand 

Final Demand Value Added - Total value added per $1 change in final demand 

Final Demand Earnings - Total household earnings per $1 change in final demand 

Final Demand Employment - Total number of jobs per $1 million change in final demand 

Direct Effect Earnings - Total household earnings per $1 change in final-demand earnings 

Direct Effect - Employment - Total number of jobs per 1 job change in final-demand jobs