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FINAL REPORT A. TITLE: ECONOMIC IMPACT OF BREAKER & SHELL EGG PRODUCTION IN PENNSYLVANIA B. INVESTIGATORS: R. M.

Baker 409C Keller Building University Park, PA 16802 Tel: 814.865.9919 Fax: 814.865.7532 E–mail: rmb194@psu.edu D. L. Passmore 305D Keller Building University Park, PA 16802 Tel: 814.863.2583 Fax: 413.803.2583 E–mail: dlp@psu.edu P. Patterson 233 Henning Building University Park, PA 16802 Tel: 814.865.3414 Fax: 814.865.5961 E–mail: php1@psu.edu

C. CHECK–OFF PROGRAM: EGG D. DURATION: Funded period: 9/1/2011 – 9/1/2012 (1 year) E. OBJECTIVES: Breaker and shell egg production can multiply their impact on the Commonwealth’s economy by adding value, income, jobs, and taxes. These impacts occur through three processes. First, egg production itself has direct effects on the economy. Producers sell eggs, which creates income for owners and employees, who pay taxes to support public goods and services. Second, egg production has indirect effects through purchases from suppliers in the state, who, in turn, create additional value, income, jobs, and taxes. And, third, additional impacts have induced effects in the region when the egg producers’ workers and workers in the firms that supply the producers purchase goods and services from Commonwealth businesses. Few studies of the economic impact of egg production have been published, although a number of special purpose studies of the impact of various egg production practices and regulatory activity are available.1 Several estimates are published of the share that egg production comprises of states’ economies.2 Several Penn State researchers have published estimates of egg production impact for Pennsylvania3 and for the United States.4
1

For example, research on economic effects of restrictions on egg–laying hen housing by Sumner, D. A., Rosen-Molina, J. T., Matthews, W. A., Mench, J. A., & Richter, K. R. (2008, July). Economic effects of proposed restrictions on egg-laying hen housing in California. Retrieved from http://aic.ucdavis.edu/publications/eggs/executivesummaryeggs.pdf
2

For example, analyses for Iowa by Lawrence, J., Ellis, S., & Otto, D. (2008, January). Economic importance of the Iowa egg industry. Retrieved from http://www.iowaegg.org/uploads/file/Egg%20Industry%20Review%20FV.pdf
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Baker, R. M., Dixon, D. L., & Passmore, D. L. (2010, March). Role of poultry and egg production in the Pennsylvania economy. University Park, Pennsylvania: Penn State Workforce Education and Development Initiative. (see http://ssrn.com/abstract=1574335) –1 –

Information about economic impact is crucial to understanding this highly competitive industry. U.S. breaker and shell eggs compete with other food items for consumer expenditures and, to some extent, with meat as a source of protein. The industry is regulated strongly by a variety of government bodies – with increasing pressure for more regulation (e.g., land and water regulations, discharge of effluent, food safety, animal welfare). Industry revenue is subject to volatile feed costs, fluctuations in consumer egg prices, occurrence of animal disease events, and costs incurred by regulatory factors such as cage size restrictions. Although the industry has benefited from shifting public opinion about the nutritional attributes of eggs (e.g., popularity of high protein/low carbohydrate diets), negative press about animal welfare issues could drive consumer preferences, legislative actions, and regulatory constraints that affect the industry. Documentation of the role of breaker and shell egg production in the economy is an important linchpin in the industry’s competitive strategy. We prepared three products through this project. First, this technical report of our findings is presented. Second, a brief, non–technical report in the Penn State Institute for Research in Training and Development’s5 Economic and Workforce Brief paper series6 is provided through the Social Science Research Network at http://ssrn.com/abstract=2151262. Third, an opinion– editorial essay about the importance of egg production in the Pennsylvania economy will appear in a forthcoming issue of Pennsylvania Business Central, a business newspaper serving 20 western and central Pennsylvania counties. The exact date during Fall 2012 of publication of this opinion–editorial essay is determined is determined by the newspaper editor, but this essay will be available prior to its publication date at http://PBCBriefing.notlong.com. F. MATERIALS AND METHODS An economic input–output model was used to estimate direct, indirect, and induced effects and economic multipliers for Pennsylvania egg production that were quantified through production quantity/product price data assembled from extant government information sources. Economic Model Applied to Estimate Impact A regional macroeconomic model called IMPLAN (Impact for PLanning and ANalysis) was applied to estimate the direct, indirect, and induced impacts of egg production on the Pennsylvania economy. MIG, Inc., from Hudson, Wisconsin, is the sole–source provider of the IMPLAN economic impact modeling system, which consist of software tools and region–specific data to enable in–depth examinations of state, multi–county, county, sub–county, and

4

Baker, R. M., & Passmore, D. L. (2010, March). Role of poultry and egg production in the economy of the United States. University Park, Pennsylvania: Penn State Workforce Education and Development Initiative. (see http://ssrn.com/abstract=1581500)
5

See http://irtd.ed.psu.edu for additional information about Penn State’s Institute for Research in Training and Development.
6

The Economic and Workforce Brief series is published at http://psubrief.notlong.com.

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metropolitan regional economies.7 MIG, Inc. has been developing complex localized databases, conducting IMPLAN training workshops, and distributing IMPLAN software to public and private organizations since 1993. A copy of the IMPLAN software and data package owned by Penn State’s Institute for Research in Training and Development was used in this study. Methods for calculating economic multipliers are well–established and common in the practice of economic impact analysis.8 However, in brief, consider an economy with i producing industries and j purchasing industries, where i = j. Let X9 stand for a matrix of interindustry transactions,10 with elements xij containing the dollar value of goods and services sold by producing industry i to purchasing industry j. Further, let y indicate an i–length vector whose elements display the dollar value of goods and services delivered by producing industry i to fulfill final demands of the economy for personal consumption, government purchases, fixed investments, and net exports. The production sector of the economy is described by X, and y captures the consumption sector of the economy. The total output of the economy by producing industry, contained in i–length vector x, is equal to the sum of production and consumption, or x = X + y. (1)

Define A, a direct requirements matrix with elements aij = xij / xj, showing the proportion of industry j purchases made from industry i. Column j of A contains the production function of purchasing industry j, which is the recipe of inputs of goods and services that industry j requires to produce its output. Equation 1 now is expressed as x = Ax + y. (2)

7

See http://implan.com for additional information about IMPLAN.

8

See, for example, classic work by Miernyk, W. (1965). The elements of input–output analysis. New York: Random House. (full web copy provided by West Virginia University Regional Research Institute at http://www.rri.wvu.edu/WebBook/Miernykweb/new/index.htm) and an encyclopedic volume by Miller, R. E., & Blair. (1994). Input–output analysis: Foundations and extensions. New York: Prentice–Hall. The U.S. Bureau of Economic Analysis is the source of most national and regional data used to calculate regional economic impacts through input– output analysis techniques (see Horowitz, K. J., & Planting, M. A. (2009) Concepts and methods of the U.S. input–output accounts. Washington, DC: Bureau of Economic Analysis, U.S. Department of Commerce.)
9

A note on notation: Matrices are presented in the text as upper case, boldface, capital letters; vectors are noted by lower case boldface letters; and elements of matrices are shown as lower case, italicized letters followed by subscripts indexing, in order, rows and columns with lower case italicized letters.
10

Interindustry transactions – in fact all quantities in X, y, and x – most commonly are accounted for as dollar values rather than as quantities of goods and services, although some energy and resource input–output models are scaled in, for instance, megawatts of electricity or gallons of water.

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Introducing for mathematical convenience an i–by–j identity matrix,11 I, and algebraically rearranging terms in Equation 2, then x = (I – A)-1 y, where (I – A)-1 is called a total requirements matrix showing the additional dollar value of output from industry i needed directly or indirectly to deliver a dollar’s worth of output from industry j to final demand in the economy. The matrix inverse, (I – A)-1, often is described as the Leontief Inverse, in honor of Wassily Leontief, an economist who won the Nobel Memorial Prize in Economic Sciences in 1973 for developing economic input–output analysis theory and methods. Taking the difference between the total requirements matrix and the direct requirements matrix produces an indirect requirements matrix. Indirect requirements are generated from the long string of transactions among industries representing intermediate production that must occur to generate a final product for consumption. The addition of households as an industry in both a row and column in X allows inclusion of the effects of household production and purchasing into the model. These row and column additions augment the total requirements matrix to include not only direct and indirect requirements, but also to show induced effects of household spending on the economy as it stimulates purchases of goods and services. The difference between the total requirements matrices, net of the indirect requirements matrix, including household spending produces an induced requirements matrix. Indirect and induced requirements matrices display how each dollar spent on goods and services delivered to consumers multiplies itself throughout the economy. Ratios between [(direct requirements + indirect requirements) / direct requirements] as well as ratios between [(direct requirements + indirect requirements + induced requirements) / direct requirements] are called Type I and Type II multipliers, respectively. Pre–multiplying the direct, indirect, and induced requirements matrices by, say, total employment parses the impact of delivery of final demand to consumers into direct, indirect, and induced employment components. In a similar manner, multipliers for other economic indicators – such as economic output, value added, income – can be computed. Economic Multipliers Calculated Using an IMPLAN input–output model of the Pennsylvania economy, Type I and Type II multipliers were calculated for the following eight economic indicators of the economic impact of egg production in Pennsylvania:  Total Value added – Labor income and indirect business taxes, which represent the value added to the cost of intermediate goods and services to produce eggs. o Labor Income – Employee compensation and proprietors’ income in the Pennsylvania egg industry.  Employee compensation – Sum of employee wages and salaries and supplements to wages and salaries in the Pennsylvania egg industry. Wages and salaries are

11

An identity matrix is an i–by–j matrix with “1” in the each of the diagonal elements and “0” in off–diagonal elements. –4 –

measured on an accrual, or “when earned” basis, which may be different from the measure of wages and salaries measured on a disbursement, or “when paid” basis. Supplements to wages and salaries include employer contributions for employee pension and insurance funds and of employer contributions for government social insurance.  Proprietors’ income – Current–production income (including income in–kind) of sole proprietorships and partnerships and of tax–exempt cooperatives. Fees of corporate directors are included in income of proprietors, but the imputed net rental income of owner–occupants of all dwellings is included in rental income of persons. Proprietors’ income excludes dividends and monetary interest received by nonfinancial businesses along with rental incomes received by persons not primarily engaged in the real estate business. These incomes are included in dividends, net interest, and rental income of persons, respectively.

o

Indirect business taxes – Sales, excise, and other taxes paid during normal operation of the Pennsylvania egg industry. These payments do not include taxes paid based on net income. “Indirect business tax” is the official term used in the U.S. Bureau of Economic Analysis’ National Income and Product Accounts for sales taxes. These taxes are descibed as indirect sales taxes because the Pennsylvania egg industry has the direct responsibility of paying these taxes to the government sector, but the egg industry really acts as the “collection agency” for the government, collecting the taxes from the household sector. In this way, these taxes are paid indirectly by the household sector. Said in another way, the Pennsylvania egg industry collects the taxes from the household sector for the government sector. The household sector is considered the ultimate payer of the taxes. Other taxes paid by the Pennsylvania egg industry to the government sector are considered direct business taxes. These include such taxes corporate profits taxes, property taxes, and franchise taxes.

  

Employment – Number of part– and full–time jobs, including self–employment, in the Pennsylvania egg industry. Does not include “in–kind work” by family member. Output – The total dollar value of eggs produced in Pennsylvania whether sold directly to producers or consumers. Taxes – The dollar value of various federal, state, and local taxes generated by business activity resulting from the Pennsylvania egg industry.

These eight multipliers are organized hierarchically. For instance, a total value added multiplier is calculated that includes labor income and indirect business taxes. Then, subsets of the total value added multiplier are calculated separately for labor income and indirect business taxes. The labor income multiplier is decomposed further into multipliers for employee compensation and proprietors’ income. Data Production function. Originally, we proposed to identify the production function for the egg industry in Pennsylvania. A production function is the mix of inputs necessary to produce an industry’s output. A production function is well known for Pennsylvania poultry and egg production, but not specifically for egg production alone.

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Our economic modeling colleagues at Regional Economic Models, Inc., also known as REMI,12 in Amherst, Massachusetts, and analysts who work for the Connecticut Department of Economic and Community Development (who faced a similar estimation problem when they completed a major analysis of the impact of avian influenza on Connecticut’s egg industry13) advised use of the poultry and egg production function that already is available to model egg production for two reasons:  Their tests revealed that the production functions for the poultry and egg industries are more likely to be similar than to be different, especially when aggregated over entire economies such as the Pennsylvania economy. The project resources necessary to specify the production function for the egg industry reliably would dwarf the marginal increases in production function validity that would result.

Our colleagues recommended that a measure of total economic output for egg production would be more crucial for our analysis and that imputing this estimate from available data would be more tractable with the resources available for this project than estimating a new production function for the industry. The need to use more general industry production functions that are available as proxies for specific industry production functions that are desirable is a common annoyance in economic impact studies. In input–output modeling, this is called an “aggregation problem” in the sense that egg production industry data is the result of a sort of “rounding up” of all activities in individual egg production facilities that vary in their scale, composition, and operation.14 This aggregation problem might be more acute in agricultural production industries such as the egg industry. Detail about agricultural industries still is becoming refined in U.S. National Income and Product Accounts because the U.S. Bureau of Economic Analysis relatively recently took over the accumulation of agricultural economic data from the U.S. Department of Agriculture. Total economic output. The dollar value of economic output = quantity of units sold  price per unit; that is, total economic output of the Pennsylvania egg production industry is the product of the quantity of eggs produced multiplied by their price. Using this relationship, we estimate that the aggregate output of egg production in Pennsylvania was worth $1,041,497,500 in 2011. Our sources and estimates of quantity and price:

12

See http://www.remi.com for additional information about Regional Economic Models, Inc. (REMI).
13

Regan, W. M., & Prisloe, M. R. (2003). Impact of avian influenza on Connecticut’s egg industry. Hartford, Connecticut: Connecticut Department of Economic and Community Development. Retrieved from http://www.ct.gov/ecd/lib/ecd/cts_egg_industry_eia_6.20.03.pdf
14

A review of the aggregation problem and its treatment is available from Chakraborty, D., & Raa, T. T. (1981). The aggregation problem in input–output analysis: A survey. Artha Vijana, 23(3), 326–344.

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Quantity. o Source. The National Agricultural Statistics Service (NASS) of the U.S. Department of Agriculture (USAID) conducts a monthly census of all known contractors and independent producers who have at least 30,000 table egg layers. Coverage for operations with less than 30,000 table egg layers are estimated each month based on Agricultural Census data and data reported in December. Approximately 520 contractors, independent egg producers, and pullet only operations are contacted each month. Estimates from a census are not subject to sampling error. Errors of omission, duplication, and data reporting, recording, and processing are minimized through strict quality controls during data collection as well as through careful review of reported data for consistency and reasonableness. Estimate. The February 2012 NASS report about chickens and eggs15 estimated that Pennsylvania produced or 7,061,000,000 – or 588 million dozen – table eggs during 2011, which represented 97% of total egg production in Pennsylvania.

o

Price. o Source. The U.S. Bureau of Labor Statistics (BLS) reports monthly U.S. retail prices of table eggs. These prices are part of the BLS’s Consumer Price Index program that produces monthly data on changes in the prices paid by consumers for a representative market basket of goods and services. Estimate. BLS’s most recently revised estimate of the average national retail price of table eggs during 2011 was $1.77 per dozen.16 Prices varied between $1.71 and $1.95 per dozen January through December 2011.

o

G. RESULTS: Economic Multiplier Analysis Contained in the appendix to this report are tabulations of estimates of the economic impacts of egg production in Pennsylvania. Provided in Table K1 are impacts from direct, indirect, and induced effects and multipliers for each $1 million of egg industry output in Pennsylvania. Shown in Table K2 are the state/local tax impacts of Pennsylvania egg industry output for each $1 million of egg industry output in Pennsylvania by source of tax payment. Similar estimates of federal tax impacts are displayed in Table K3. In brief, the data tabulated in Table K1, Table K2, and Table K3 in the appendix indicate that every dollar of egg industry output produced in Pennsylvania multiplies itself throughout the entire Pennsylvania economy in the following amounts:

15

National Agricultural Statistics Service, United States Department of Agriculture. (2012, February). Chickens and eggs: 2011 summary. Retrieved from http://usda01.library.cornell.edu/usda/nass/ChickEgg//2010s/2012/ChickEgg-02-28-2012.txt
16

See Table 3a produced by Economics, Statistics, and Market Information System of the USDA in September 2012 report retrieved from http://www.ers.usda.gov/datafiles/Meat_Price_Spreads/cuts.xls –7 –

$2.70 of total value added o   o $2.25 of labor income $3.43 of employee compensation $1.33 of proprietors’ income $5.00 of indirect business taxes

  

$1.91 of total Pennsylvania–wide economic output $.045 of tax payments to the state of Pennsylvania and local governments $.071 of tax payments to the federal government

Each $1,000,000 of economic output produces 2.4 jobs. Total Industry Impacts Contained in Table K4 are estimates of the impacts in 2011 of $1,041,497,500 of Pennsylvania egg production on total value added, labor income, employee compensation, proprietors’ income, indirect business taxes, jobs, and total economic output. Estimates are displayed in Table K5 of state/local and federal taxes payments as a result of 2011 Pennsylvania egg production. In brief, egg production in Pennsylvania during 2011 was responsible for supporting almost 2,500 jobs in all Pennsylvania industries (including egg production), stimulated almost $2 billion of total economic output in the entire Pennsylvania economy, and resulted in $121.9 million in tax payments directly and indirectly to federal, state, and local governments. More detailed estimates of impact are provided in the appendix to this report. H. DISCUSSION: Estimates of the economic impact tabulated in the appendix demonstrate the importance of Pennsylvania egg production for Pennsylvania economic output, income, jobs, and taxes. From this perspective, the estimates derived in this report will be useful in the development and assessment of policy, strategy, and tactics related to Pennsylvania’s egg production industry. However, some cautions are advised. Most of the data, beyond censuses, used in input–output models such as IMPLAN are treated as though it is fixed and without error, when, instead, much of these data actually are generated by stochastic processes and hold the potential for sampling and non–sampling errors and biases. The estimates in this paper might have a “standard error,” but the models used do not explicitly account for errors in variables. As a result, the point estimates of impact presented in this report do not include error bands to guide questions about statistical significance or interval estimation. The industry aggregation that was necessary for this study requires caution so that the findings of this economic impact study are not overstated or misapplied as though the industry is simple and homogeneous in its processes, products, and prices. Variation within the Pennsylvania egg

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industry means that the estimates derived in this report will not necessarily be a perfect match for all egg production situations that are found within particular regions of Pennsylvania and in the mix of egg types produced. The findings of this study are a “grand average” of all Pennsylvania egg production in 2011. Impact estimates from an input–output model such as IMPLAN are restricted mathematically to be linear over a range of possible changes of an industry’s output. That is, as egg production increases, there are no economies of scale that are identified in the input–output model. Likewise, as production decreases, there are no inefficiencies that are accumulated. As a result of this restriction, the estimates of economic impact provided are best used to assess the impact of relatively small, marginal variations in the egg industry’s output, not, for example, large decreases in production that could occur due to avian disease requiring flock destruction. I. SIGNIFICANCE AND SUMMARY OF WORK: An economic input–output model was used to estimate the direct, indirect, and induced effects and economic multipliers associated with Pennsylvania egg production in 2011 that were quantified through production quantity/product price data assembled from extant government information sources. There are at least two uses for the economic impact estimates provided through this project:  The multipliers tabulated in Table K1, Table K2, and Table K3 can be used to estimate alternative impacts for different levels of production for various egg types and prices. o o First, calculate the total economic output anticipated from a level of production or egg type/price combination by multiplying quantity by price. Then, divide the result of this multiplication by 1,000,000 to yield a number that is, in turn, multiplied by the economic multipliers in Table K1, which show the impact for every $1,000,000 of economic output. So, for instance, if brown eggs were selling for $2.50 per dozen and 1,000,000 dozen were sold, total economic output would be $2,500,000, which divided by 1,000,000 is 2.5. The potential marginal economy–wide employment impact of this level of output would be approximately six new jobs. Similar calculations can be made with tax impacts shown in Table K2 and Table K3.

o

o 

The impact estimates for 2011 contained in Table K4 and Table K5 have policy relevance in themselves. They demonstrate egg production industry activity in Pennsylvania that contributes to the Pennsylvania economy in important ways through the activity of the industry itself, its impact on supplying firms, and the additional economic activity it induces due to spending of income in Pennsylvania by workers in the egg industry and its suppliers. Also, the Pennsylvania egg industry yields substantial tax receipts that are used to purchase of public goods and services that benefit all citizens of the Commonwealth, whether or not they are associated with Pennsylvania’s egg industry.

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J. FUTURE WORK: Future work should take advantage of the ability of input–output models to facilitate counterfactual analysis that could contribute to strategic planning by the Pennsylvania egg production industry. This type of work is important especially because of the disruption and chaos evident in markets due to the recent recession and due to regulatory challenges and market shifts experienced by the industry. A counterfactual analysis involves studying a hypothetical scenario that runs “counter to the facts” of an existing reality. A counterfactual condition entails “What if…?” questions that represent thought experiments about propositions that run counter to the facts. For instance, how would an economy have grown and changed if an activity or event did not occur? The potential impact of the activity or event is the difference between what would have happened with and without the activity or event. For example, researchers used the counterfactual approach to consider strategic decisions, decisive acts, and paths as if they had not been executed in history. For instance, in Ab Urbe Condita Libri,17 Titus Livius Patavinus, a Roman historian, contemplated an alternative 4th century BC that considered, “What would have been the results for Rome if she had been engaged in war with Alexander?” The modern counterfactual approach goes back at least to the 18th century philosopher David Hume,18 and it has been applied productively in a variety of situations by historians, essayists, and novelists. For instance, in 1931 Winston Churchill wrote an essay, “If Lee Had Not Won the Battle of Gettysburg,”19 that took the counterfactual viewpoint of what would have happened if the Confederacy had won the American Civil War.20 In 1962, Philip K. Dick, a novelist in the science fiction genre, published The Man in the High Castle,21 a thought experiment in which Nazi Germany and Imperial Japan won World War II. Pertinent to future policy–pertinent analyses of the Pennsylvania egg production sector are such counterfactuals as:  How would the Pennsylvania economy – and, indeed, the entire U.S. economy – perform without Pennsylvania egg production?

17

See Patanivus, T. L. (1876 edition). Ab urbe condita libri. Digitized by the Internet Archive Project at http://archive.org/stream/aburbeconditali08livygoog#page/n3/mode/2up.
18

Cf. p. 556 in Lewis, D. (1973). Causation. Journal of Philosophy, 70, 556–567.

19

If Churchill’s title seems like a non sequitur, see the explanation his rhetoric at http://www.troynovant.com/Franson/Churchill/If-Lee-Not-Won-Gettysburg.html.
20

Published in a collection of essays taking similar counterfactual approaches in Squire, J. C. (1931). If it had happened otherwise. London: Longman/
21

Dick, P. K. (1962). The man in the high castle. New York: Random House.
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What would happen if general economic conditions varied from historical trends – e.g., level and distribution of disposable income, rate of growth, production costs due to regulation on egg producers, long–term egg consumption shifts, consumer preferences for eggs of different quality and price?

These sorts of counterfactuals can be examined with input–output analysis methods. The typical way to conduct such a counterfactual approach would be to construct two economic scenarios. The first scenario contains an alteration in the economy that would be pertinent to policy and strategy for the Pennsylvania egg industry (e.g., a regulatory policy that could increase egg producers’ production costs). The second scenario involves a “plain vanilla” scenario that assumes that the Pennsylvania economy – and egg production within it – moves along structurally and consistently with historical trends. The difference between the first and the second scenarios is the potential economic impact of the policy specified in the first scenario (e.g., the impact of increased regulatory costs on the egg industry and the entire Pennsylvania economy). The results of such counterfactual analyses are not forecasts of total economic impact. Such analyses isolate the importance only of one narrow group of changes in an economy by showing the gross effect of these changes rather that the effect of changes net of all other potential changes taken together that could affect an economy. A counterfactual specified using input–output methods typically is specified under the assumption of ceteris paribus – that is, with the assumption of “all other things remaining the same” or, as is much more restrictively used in physics and other sciences,22 “if, and only if, all other things are the same and correct.”23 Implementing a counterfactual macroeconomic experiment about egg production under actual economic conditions virtually is impossible for practical or resource reasons. The economic modeling approach provides a reasonable approximation for assessing the value and worth of strategies, risks, and tactics that could affect the Pennsylvania egg production industry.

22

Cartwright, N. (1980). The truth doesn’t explain much. American Philosophical Quarterly, 17(2), 159–163.
23

An alternative view is to consider counterfactuals as ceteris absentibus, a term coined by Joseph [(1980). The many sciences and the one world. Journal of Philosophy, 77, 773–791.] literally meaning “others absent.” –11 –

K. APPENDIX Table K1. Estimated impacts derived from direct, indirect, and induced effects and multipliers for each $1 million of annual egg industry output produced in Pennsylvania1 Effect Impact Total Value Added • Labor Income – Employee Compensation – Proprietors’ Income • Indirect Business Taxes Employment Output
1

Multiplier Induced (3) 0.16 0.09 0.08 0.01 0.02 2.08 0.27 Type I (1+2)÷1 1.90 1.69 2.29 1.22 2.00 1.70 1.64 Type II (1+2+3)÷1 2.70 2.25 3.43 1.33 5.00 2.39 1.91

Direct (1) 0.20 0.16 0.07 0.09 0.01 3.03 1.00

Indirect (2) 0.18 0.11 0.09 0.02 0.02 2.12 0.64

Values in table are dollars benchmarked to 2012, except for employment, which is shown as the number of part– and full–time jobs, including self–employment.

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Table K2. Estimated state/local tax impacts of Pennsylvania egg industry output for each $1 million of annual egg industry output produced in Pennsylvania by source of payment (2012 dollars) Employee Compensation Source of Payment Proprietor Indirect Income Business Tax Households

Description Dividends Social Insurance Tax: Employee Contribution Social Insurance Tax: Employer Contribution Sales Tax

Corporations $2,413

$93

$401

$12,908

Property Tax Motor Vehicle License Other Taxes State and Local NonTaxes Profits Tax

$13,617

$283

$3,983

$894

$1,612

Income Tax

$7,525

Fines – Fees Motor Vehicle License Property Taxes

$1,100

$359

$174

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Description Personal Fees (Fish/Hunt) Total State and Local Tax

Employee Compensation

Source of Payment Proprietor Indirect Income Business Tax Households $170.00

Corporations

$495

$31,686

$9,328

$4,025

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Table K3. Estimated federal tax impacts of Pennsylvania egg industry output for each $1 million of annual egg industry output produced in Pennsylvania by source of payment (2012 dollars) Employee Compensation $14,297 Proprietor Income $7,837 Source of Payment Indirect Business Tax Households

Description Social Insurance Tax: Employee Contribution Social Insurance Tax: Employer Contribution Custom Duty

Corporations

$14,459

$915

Fed NonTaxes

$1,511

Profits Tax

$6,547

Income Tax

$23,966

Total Federal Tax

$28,756

$7,837

$4,392

$23,966

$6,547

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Table K4. Estimated total economic impacts derived from multipliers for $1,041,497,500 of egg industry output produced in Pennsylvania, 2011 Multiplier Type I (1+2)÷1 1.90 1.69 2.29 1.22 2.00 1.70 1.64 Type II (1+2+3)÷1 2.70 2.25 3.43 1.33 5.00 2.39 1.91 Total Impact in 2011 (millions 2012 dollars) Direct + Direct + Indirect + Indirect Induced

Impact Total Value Added • Labor Income – Employee Compensation – Proprietors’ Income • Indirect Business Taxes Employment Output

$1,979 $1,760 $2,385 $1,271 $2,083 1,771 jobs $1,708

$2,812 $2,343 $3,572 $1,385 $5,207 2,489 jobs $1,989

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Table K5. Estimated state/local and federal tax impacts derived $1,041,497,500 of egg industry output produced in Pennsylvania by source of payment, 2011 (in 2012 dollars) Employee Compensation Proprietor Income Source of Payment Indirect Business Tax Households

Government State/Local

Corporations

$515,541

$33,000,890

$9,715,089

$4,192,027

Federal

$29,949,302

$8,162,216

$4,574,257

$24,960,529

$6,818,684

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