EPA-9O8/4-77-OO9
JUNE 1977
DEVELOPING
ECONOMIC  IMPACT
PROJECTION MODEL
FOR THE  FORT UNION
COAL  REGION
   US. ENVIRONMENTAL PROTECTION AGENCY

         REGION VIII

      DENVER . COLORADO 6O295

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DEVELOPING ECONOMIC IMPACT PROJECTION MODELS
       FOR THE FORT UNION COAL REGION
              Report No. 77030
                     By
             Thor A. Hertsgaard
               Randal C. Coon
             F. Larry Leistritz
              Norman L. Dalsted
    Department of Agricultural Economics
        North Dakota State University
                June 30, 1977
             Project 68-01-3507
               Project Officer
             Mr. George Collins
                 Region VIII
       Environmental Protection Agency
           Denver, Colorado 80203

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                        DISCLAIMFR


This report has been reviewed by the Environmental Protection

Aqency, and approved for publication.  Approval does not sionify

that the contents necessarily reflect the views and policies of

the Environmental Protection Aqency, nor does mention of trade

names or commercial products constitute endorsement or recommen-

dation for use.
This document is available to the public through the National
Technical Information Service, Springfield, Virginia  22151.

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                         Table of Contents
                                                                Page
Introduction 	     1
Procedures 	     1
The Model  	     3
Evaluation of the Model.  	     5
  State of North Dakota	     5
  Regions in North Dakota  	    10
  Montana	    21
  Wyoming	    21
Conclusions	    28
Recommendations for Further Work 	    34
Appendix A	    35
Appendix B	    46
List of Tables	    51
List of Figures	    51

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                           INTRODUCTION



       This report describes the results of work under Phase I of a study



to develop, adapt, and integrate models for evaluating the economic effects



of expanded coal mining and conversion in the Northern Great Plains (Fort



Union) Region.  Work under Phase I was designed to determine the usefulness



for describing  interindustry relationships in western North Dakota, south-



eastern Montana, and northeastern Wyoming of input-output coefficients



previously developed for North Dakota.



       Phase  II, if required, would involve modification of the North Dakota



input-output  tables to obtain coefficients which more accurately depict



interindustry relationships in the coal impact areas of eastern Montana and



northeastern  Wyoming.  Such modification likely would involve collection of



expenditures  data for those sectors in Montana and Wyoming that are believed



to be significantly different from their counterparts in North Dakota.



Technical input-output coefficients would be computed for those sectors and



those coefficients would be substituted in the computation of a revised



interdependence coefficients matrix.



       Phase  III will involve the use of the input-output coefficients



evaluated in  Phase II (and/or Phase I) to assess the potential effects of



coal resource development in the Fort Union Region.





                            PROCEDURES



       The general procedures involved application of the interdependence



coefficients  to the final demand vectors for each state and the relevant



regions within the respective states.   Final demand vectors are defined as



production for final  demand by the several  economic sectors in the regions



that result in a flow of funds into the region from the "rest-of-the-world."

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                               - 2 -

These receipts consist of sales of livestock and crops, products of mines,
manufactured products, as well as federal government outlays and tourist
expenditures in the region.
       Multiplication of the interdependence coefficients and the final
demand vector for the respective state or region yielded estimates of the
gross business volumes for each of the economic sectors in the  state or
region.   Data were assembled from secondary sources (Appendix A) to provide
estimates of  sales for final demand by the respective sectors in each of the
regions  and states for the years 1958-1975.  Multiplications of the matrix
of interdependence coefficients by the vector of sales for final demand
yielded  estimates of  total personal income (as well as estimates of gross
business volumes of each of the other sectors) for each of the  years for the
respective  states and regions.  The gross business volume of the household
sector,  except  for minor definitional differences, is equivalent to personal
income.   These  estimates were  compared to those published by the Bureau of
Economic Analysis, U.S. Department of Commerce, at both the state and regional
level.
       Because  of the fact that U.S. Department of Commerce estimates of
personal income for substate  geographic  areas also may be subject to some
degree of error, another independent method was used to disaggregate per-
sonal  income  in each  state to  the regional level.  This method  is described
in Appendix B.  The method involved disaggregation of personal  income from
the state to  the county level  in each state for each year and reaggregation
to the regions  of interest.   These estimates were then compared to those
derived  by  input-output techniques.
       (The reader should  note that comparison of regional personal income
estimates based in input-output analysis with those based on disaggregation
procedures  involved comparisons for 18 years whereas only 12 years of
estimates were available from  the U.S. Department of Commerce.)

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                               - 3 -
                             THE MODEL

       Stadig  was  the first to collect primary data for an input-output

model  in North Dakota, but  initial efforts  to gather large quantities of
                          2           3
data  began  in 1965.  Sand  and Bartch  collected data  in southwestern North

Dakota from a sample of  firms, households,  and governmental units that were

used  to describe  the structure of  the North Dakota economy and to project

the economic impacts of  selected types of development  in the state.  They

derived technical  input-output coefficients and interdependence coefficients

for a  30-sector model of the North Dakota economy.
               4             5
       Lutovsky   and Senechal  subsequently explored procedures for testing

the validity of the coefficients derived by Sand and Bartch.  They concluded

that  the coefficients developed for  southwestern North Dakota also were

valid  for other parts of the state.  However, they recommended that some of

the 30 sectors defined by Sand and Bartch be aggregated into fewer sectors.

Accordingly, data  collected by Sand  and Bartch subsequently have been aggre-

gated  into  a set  of 13 sectors.  Most of the sectors involved were retail
         Stadig,  L.  L.,  Economic  Interrelationships Among Sectors of a Local
Economy  with  Special  Emphasis cm Agriculture:  Lisbon, North Dakota, unpub-
lished M.S. thesis, Department of Agricultural Economics, North Dakota State
University, Fargo,  1964.
       2
         Sand, L.  D.,  Analysis of_ Effects of  Income Changes in  Intersectoral
and^  Intercommunity  Economic  Structure, unpublished M.S. thesis, Department
of Agricultural  Economics, North Dakota State University, Fargo, 1966.
       o
         Bartch,  B.  L.,  Analysis  of  Intersectoral and  Intercommunity Struc-
Uj£g_ jn  Southwestern  North Dakota,  unpublished M.S. thesis, Department of
A~g~rTcultural  Economics, North Dakota State University, Fargo,  1968.

         Lutovksy, R.  F.,  Interindustry Analysis of the North Dakota Economy,
unpublished M.S.  thesis,  Department of Agricultural Economics, North Dakota
State University, Fargo,  1968.

         Senechal, D.  M.,  Analysis of Validity of North Djtkojal.npjjt-0ut.pjrt
Models,  unpublished M.S.  thesis, Department of Agricultural Economics, North
Dakota State University,  Fargo,  1971.

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                               - 4 -

trade sectors,  which were aggregated into a single retail trade sector (Sec-
tor 8).
       The principal intended use for which input-output coefficients
initially were assembled in North Dakota was for projecting the economic
impacts of irrigation development in the state.  However, since the data
were collected, a wide variety of applications has been made.  The major use
of the model recently has been for estimating the economic and social impacts
of coal resource development.
       The original model developed by Sand and Bartch had only one sector
to describe the various mining activities within the state.  This sector
reflected the  characteristics of firms in southwestern North Dakota that
were engaged in sand and gravel mining but did not include such activities
as coal and petroleum mining.  The omission of coal and petroleum mining was
not  a serious  deficiency in  the model as long as the major component of the
state's economic base was agriculture and as long as there were no important
interdependences  of other economic sectors with coal and petroleum mining.
However,  the increasing  importance of mining as a component of the state's
economic  base  and  the prospects for accelerated development of coal conversion
facilities  in  the  state  resulted  in a need for more detailed input-output
data for  the energy sectors.
       Part of the efforts under  Phase I of this project involved collection
of expenditures data in  North Dakota from firms in four additional sectors
related to  energy  production.  These sectors were coal mining, thermal-elec-
tric power  generation,  petroleum  and natural gas extraction, and petroleum
refining.  Technical input-output data were computed for these sectors and
the  results were augmented to those previously available for other sectors.

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                               - 5 -

The augmented matrix of input-output coefficients was the basis for compu-
tation of a set in interdependence coefficients for the 17-sector model of
the North Dakota economy.
       The 17 sectors and the Standard Industrial Classification (SIC) Code
numbers corresponding to each are presented in Table 1.  The interdependence
coefficients that were computed for the 17-sector model are presented in
Table 2.

                      EVALUATION OF THE MODEL
       The input-output interdependence coefficients developed for North
Dakota were evaluated at the state level for North Dakota, Montana, and
Wyoming and also at the regional level for the coal producing regions of
those states.   In each case, final demand vectors were computed for the
state or region, and then were multiplied by the interdependence coeffi-
cients to obtain the level of personal income generated by that level of
export for final demand.  These estimates of personal income were compared
with those published by the U.S. Department of Commerce.
       State level estimates of sales for final demand by the "basic" sec-
tors were based on secondary data sources.  Some difficulty was experienced
in estimating out-of-state sales for some components of final demand and
this tended to be an even greater problem at the regional level.  Where good
data existed at the county level, it was the source for aggregations of
county data into regional totals.

                       State of_ North Dakota
       Final  demand vectors for the state of North Dakota for the years
1958-1975 are presented in Table 3.   Sales of livestock and crops are in
Columns A and B.  Exports of coal and petroleum are in Columns H and J.

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                               -  6  -
TABLE 1.
  EACH
ECONOMIC SECTORS OF INPUT-OUTPUT MODEL AND SIC CODE NUMBERS OF
         Economic Sector
                                      SIC Code1
 1.  Ag., Livestock
 2.  Ag., Crops

 3.  Sand and Gravel Mining

 4.  Contract Construction

 5.  Transportation
 6.  Communication and Utili-
       ties

 7.  Wholesale Trade and Ag.
       Processing

 8.  Retail Trade
  9.   Finance,  Insurance, and
        Real  Estate
 10.   Business  and Personal
        Services
 11.   Professional and Social
        Services
 12.  Households
 13.  Government
 14.  Coal Mining

 15.  Thermal-Electric Power
       Generation
 16.  Petroleum and Natural
       Gas Extraction
 17.  Petroleum Refining
                      Group 013, - Livestock
                      All of Major Group 01 - Agricultural Produc-
                        tion, Except Group 013 - Livestock
                      Major Group 14 - Mining and Quarrying of Non-
                        metallic Metals, Except Fuels
                      Division C - Contract Construction  (Major
                        Groups 15, 16, and 17)
                      All Division E - Transportation, Communica-
                        tions, Electric, Gas, and Sanitary Ser-
                        vices, Except Major Groups 48 and 49.
                      Major Group 48 - Communication and Major
                        Group 49 - Electric, Gas, and Sanitary
                        Services (Except Industry No. 4911)
                      Major Group 50 - Wholesale Trade and Major
                        Group 20 - Food and Kindred Products
                        Manufacturing
                      All of Division F - Wholesale and Retail
                        Trade, Except Major Group 50 - Wholesale
                        Trade
                      Division G - Finance, Insurance, and Real
                        Estate
                      All Division H - Services, Except Major
                        Groups 80, 81, 82, 86, and 89
                      Major Group 80 - Medical and Other Health
                        Services, Major Group 81 - Legal Services,
                        Major Group 82 - Educational Services,
                        Major Group 86 - Nonprofit Membership
                        Organizations, Major Group 89 - Miscel-
                        laneous Services
                      Not Applicable
                      Division I - Government
                      Major Group 12 - Bituminous Coal and Lignite
                        Mining
                      Industry Number 4911 - Electric Companies
                        and Systems
                      Major Group 13 - Crude Petroleum and Natural
                        Gas
                      Major Group-29-- Petroleum Refining and
                        Related Industries
 Executive Office of the President/Bureau of the Budget, Standard Industrial
  Classification Manual, 1967, U.S. Government Printing Office, Washington,—
  u * L »9  i

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TABLE 2.  INTERDEPENDENCE COEFFICIENTS FOR BASIC ECONOMIC SECTORS,  NORTH  DAKOTA
(1)
Agriculture,
Sector Livestock
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Gross
Ag, Livestock
Ag, Crops
Sand & Gravel Mining
Contract Construction
Transportation
Comm. & Utilities
Wholesale Trade & Ag Proc.
Retail Trade
Fin., Ins., & Real Estate
Bus. & Pers. Service
Prof. & Soc. Service
Households
Government
Coal Mining
Elec. Gen.
Petro./N. Gas Extraction
Petro. Refining
Receipts Multiplier
1.21
0.39
0.01
0.07
0.02
0.09
0.57
0.71
0.15
0.06
0.07
1.05
0.10
a
a
a
a
4.49
(2)
Agriculture,
Crops
0.08
1.09
0.01
0.08
0.01
0.08
0.16
0.81
0.17
0.07
0.06
0.96
0.10
a
a
a
a
3.69
(4)
Contract
Con-
struction
0.03
0.01
0.03
1.05
0.01
0.06
0.02
0.41
0.08
0.03
0.04
0.61
0.05
a
a
a
a
2.44
(7) (8)
Wholesale
Trade & Ag Retail
Processing Trade
0.19
0.65
0.01
0.06
0.01
0.08
1.74
0.61
0.13
0.05
0.05
0.79
0.08
a
a
a
a
4.45
0.09
0.03
a
0.03
0.01
0.05
0.05
1.27
0.06
0.02
0.03
0.40
0.04
a
a
a
a
2.09
00)
Business
&
Personal
Service
0.04
0.02
a
0.05
0.01
0.11
0.02
0.45
0.11
1.05
0.05
0.72
0.08
a
a
a
a
2.71
(12)
House-
holds
0.07
0.03
0.01
0.09
0.01
0.11
0.04
0.74
0.17
0.06
0.10
1.55
0.11
a
a
a
a
3.08
(14)
Coal
Mining
0.04
0.03
a
0.05
0.01
0.07
0.06
0.40
0.08
0.03
0.05
0.67
0.05
1.00
a
0.01
0.02
2.57
(15)
Electric
Generating
0.03
0.03
a
0.03
a
0.04
0.08
0.23
0.10
0.02
0.03
0.40
0.04
0.16
1.00
0.01
0.01
2.21
(16)
Petroleum/
Natural
Gas
Extraction
0.02
0.01
a
0.11
0.02
0.05
0.01
0.18
0.04
0.01
0.02
0.32
0.03
a
a
1.10
a
1.92
(17)
Petroleum
Refining
0.01
0.01
a
0.09
0.02
0.04
0.01
0.17 '
0.04
0.01
0.02
0.30
0.03
a
a
0.82
1.00
2.57
aLess than 0.005.

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TABLE 3.  SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, NORTH DAKOTA,  1958-1975  (MILLION  DOLLARS)
Year
1958
1959
1960
1961
196Z
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
(A)
Agriculture,
Livestock
220.3
217.3
175.4
213.9
199.3
207.7
213.3
247.5
271.5
280.9
264.2
265.0
272.5
304.7
367.4
475.9
448.5
452.8
(B)
Agriculture,
Crops
440.3
394.9
390.9
341.7
476.8
543.1
451.2
554.5
609.4
568.4
570.5
641.8
671.0
673.7
975.0
1,795.7
2,072.1
1,555.8
(C)
Contract
Construction
18.3
27.2
32.7
24.0
16.5
17.1
30.2
31.0
23.3
24.4
27.0
35.2
182.1
60.7
72.9
61.6
72.3
82.9
(D)
Wholesale
Trade & Ag
Processing
62.5
57.0
66.1
67.5
62.6
73.0
78.4
78.4
84.2
91.7
101.5
162.0
148.1
162.0
170.0
243.0
304.8
306.6
(E)
Retail
Trade
16.5
18.0
14.9
17.2
18.7
21.7
26.2
33.0
45.0
54.7
69.7
75.8
85.7
93.8
86.3
94.5
92.6
112.5
(F)
Business i
Personal
Service
5.5
6.0
5.0
5.8
6.3
7.2
8.7
11.0
15.0
18.2
23.2
25.3
28.5
31.3
28.8
31.5
30.9
37.5
(G)
5,
Households
187.0
186.5
187.9
237.2
344.2
334.. 5
485.2
361.4
428.6
380.8
447.9
501.5
567.7
605.1
649.0
726.7
806.0
1,046.9
(H)
Coal
Mining
1.1
1.0
1.0
1.3
1.5
1.3
1.5
1.5
1.3
2.1
2.4
2.4
3.2
3.5
3.3
4.1
4.9
7.1
(D
Electric
Generating
—
—
—
---
—
—
—
—
4.4
8.4
12.3
11.7
13.8
17.5
21.4
19.3
22.4
21.6
(0)
Petroleum/
Natural Gas
Extraction
5.4
10.9
14.5
21.0
22.8
23.3
25.9
28.0
29.7
28.0
..34.3
26.2
30.3
32.9
34.6
38.4
76.1
93.1
(K)
Petroleum
Refining Total
13.1
12.9
12.5
12.6
12.5
12.5
12.7
13.4
14.0
14.6
14.7
14.9
15.2
16.0
17.0
19.2
22.8
27.2
970.0
931.7
900.9
942.2
1,161.2
1,241.4
1,333.3
1,359.7 co
1,526.4
1,472.2
1,567.7
1,761.8
2,018.1
1,969.9
2,425.7
3,509.9
3,953.4
3,744.0

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                               - 9 -

Manufactured exports are in Columns D, I, and K.   Estimated outlays  for
tourism are allocated in Columns E and F, while federal  government outlays
for construction is Column C and federal  payrolls is Column G.
       The estimates of personal income obtained by input-output techniques
are presented in the first column of Table 4.  For each year,  the result is
the sum of the products of the sales by the column sector (Table 3)  and the
coefficient in Row 12 of the interdependence coefficients matrix (Table 2)
for that sector.  For example, the $1,022 million of estimated  personal
income in 1958 (Table 4) is equal to ($220.3 million x 1.05) +  ($440.3
million x .96) + ($18.3 million x .61) + ($62.5 million x .79)  + ($16.5
million x .40) + ($5.5 million x .72) + ($187.0 million x 1.55) + ($1.1
million x .67) + ($5.4 million x .32) + ($13.1 million x .30)  = $231.3
million + $422.7 million + $11.2 million + $49.4 million + $6.6 million +
$4.0 million + $289.9 million + $0.7 million + $1.7 million + $4.0 million.
(The data shown in the above example are rounded numbers which  are slightly
different from the unrounded ones from the computer calculations.)
       The results of these calculations for each year were compared with
estimates of personal income in North Dakota that are assembled by the U.S.
Department of Commerce, which appear in the second column of Table 4.  The
last column of the table indicates the difference in the first two columns,
expressed as a percentage of the Department of Commerce estimate.  This
difference is less than 5 percent for 10 of the 18 years and only 6 years
have differences of more than 6 percent.   Of these 6 years, one was 1964
(when the Minuteman construction was occurring) and another was 1970 (when
the ABM construction was in progress).  Input-output analysis overestimated
personal income in those years because reporting of government outlays

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                              - 10 -
TABLE 4.  PERSONAL INCOME,  NORTH DAKOTA, 1958-1975
Year
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975 .
Average Difference
Estimated by
Input-Output
Techniques ($000)
$1,022,420
978,397
942,474
1,011,456
1,285,782
1,353,838
1,521,163
1,470,114
1,662,434
1,572,975
1,684,427
1,890,981
2,117,311
2,156,709
2,592,109
3,674,768
4,104,582
4,013,695

Reported by U.S.
Department of
Commerce ($000)a
$1,027,000
953,000
1,081,000
964,000
1,361,000
1,283,000
1,272,000
1,498,000
1,556,000
1,595,000
1,644,000
1,850,000
1,913,000
2,173,000
2,545,000
3,663,000
3,629,000
3,652,000

Percentage
Difference
-0.5
2.7
-12.8
4.9
-5.5
5.5
19.6
-1.9
6.8
-1.4
2.5
2.2
10.7
-0.7
1.9
0.3
13.1
9.9
5.72
 As  reported by the Bureau of Economic Analysis, U.S. Department of
 .Commerce, in Survey of Current Business, August, 1976.
 Without respect to sign.

 implied that all the expenditures occurred in those years, whereas they
 actually were distributed over more than one year.
       Figure 1 indicates the results of the analysis in graphic form.  The
 solid  line indicates North Dakota personal income reported by the Department
 of Commerce for the years 1958-1975.  The dotted line represents estimates
 for  those years obtained from the input-output model.

                      Regions in North Dakota
       The regions in North Dakota for which exports of coal, electricity,
 or crude or refined petroleum constitute a part of the economic base are
 Regions 1, 2, 7, and 8 (Figure 2).  Final demand vectors for those regions
 for  the years 1958-1975 are presented in Table 5.

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North Dakota Personal
  Income (Billion Dollars)
- 11 -

.0
3.8
3.6
3.4
3.2
3.0
2.3
2.6
2.4
2.2
2.0
1.3
1.6
1.4
1.2
1.0
.8
.6
.4

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           19158   60   62   64   66   68    70    72    74

           Figure 1.  Personal Income in  North Dakota, as Reported by the U.S
             Department of Commerce and Estimated by Input-Output Procedures,
             1958-1975.

-------
                                                                                    Cavalier 019    I Pembina067
Bottineau 009
                      Mountrail 061
                                      Ward 101
          SR

          \^
         McKenzie 053
                                                 Nelson   Grand Forks
                                                     0631         035
                                                                                             Griggs  BSteele
                                                                                                0391    091
                                                                  Kidder043iStutsman  093
                                                                                              Barnes 003  • cass 017
                    Hettinger 041 ~M  °37
                                         LaMoure 045
                                                                                                      Sargent 081
                          MeIntosh 051    Dickey 021
Figure 2.   State Planning Regions  in North Dakota.

-------
TABLE 5.  SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, NORTH DAKOTA REGIONS, 1958-1975  (MILLION DOLLARS)
(A)
Agriculture,
Year Livestock

1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975

1958
1959
1960
1961
1962
1963
1964
1965
1965
1967
1968
1969
1970
1971
1972
1973
1974
1975

10.3
9.8
8.0
10.0
9.2
10.1
10.9
13.1
14.3
14.8
13.9
13.8
15.0
17.9
21.5
26.8
23.4
22.7

24.2
22.9
18.8
23.3
21.5
22.5
23.3
27.2
28.4
29.9
26.2
26.0
28.1
35.5
39.7
49.2
45.2
44.8
(B)
Agriculture,
Crops

16.2
14.4
19.2
10.6
28.4
36.2
24.2
26.5
32.9
28.2
26.4
40.0
38.3
34.1
59.6
115.2
128.0
85.5

46.9
50.1
53.0
23.2
85.4
89.0
74.7
78.2
95.8
65.7
72.5
95.8
94.2
91.7
133.6
311.3
300.8
205.0
(C)
Contract
Construction

.8
1.1
1.4
1.1
.7
.8
1.3
1.4
1.0
1.1
1.2
1.5
.7
.7
2.5
.3
1.1
.9

2.2
3.3
3.9
2.9
2.0
2.1
3.6
3.7
2.8
2.9
3.2
2.1
2.9
5.0
4.2
7.0
5.7
5.4
(D) (E)
Wholesale
Trade & Ag Retail
Processing Trade

2.7
2.3
2.6
2.5
2.2
2.4
2.6
2.6
2.8
3.1
3.3
5.4
4.9
5.4
5.6
8.0
10.1
10.2

7.8
7.4
8.8
9.3
8.9
10.6
11.3
11.3
12.1
13.5
14.7
23.3
21.3
23.3
24.5
34.9
43.8
44.1

.9
1.0
.8
1.0
1.0
1.2
1.5
1.8
2.5
3.0
3.8
4.2
4.7
5.2
4.7
5.2
5.1
6.2

2.5
2.8
2.3
2.7
2.9
3.4
4.0
5.1
6.9
8.4
10.7
11.7
13.2
14.4
13.3
14.6
14.3
17.3
(F) (G) (H) (I)
Business &
Personal Coal Electric
Service Households Mining Generating
Region 1
.3
.3
.3
.3
.3
.4
.5
.6
.8
1.0
1.3
1.4
1.6
1.7
1.6
1.7
1.7
2.1
Region 2
.9
.9
.8
.9
1.0
1.1
1.4
1.7
2.3
2.8
3.6
3.9
4.4
4.8
4.4
4.9
4.8
5.8

5.8 .1
6.4 .1
7.3 .1
7.6 .2
9.5 .2
9.8 .1
12.8 .1
11.0
12.5
12.0
13.7
21.0
18.9
23.0
22.8
25.6
27.3
31.0

31.3
29.1
33.0
39.1
78.9
69.7
124.1
71.0
91.8
68.8
89.0
102.6
129.5
131.4
120.4
146.7
178.0
297.3
(J)
Petroleum/
Natural Gas
Extraction

17.6
20.7
25.5
26.5
30.2
32.7
36.3
37.6
38.8
33.4
33.4
28.2
28.9
31.3
31.3
33.2
72.0
86.4

7.3
12.5
16.8
20.9
21.7
21.6
24.0
25.4
23.6
21.5
21.5
20.0
21.5
24.4
25.8
25.6
47.9
57.8
(K) (L)
Petroleum
Refining Total

4.8
4.7
4.6
4.6
4.6
4.5
4.4
4.6
4.6
4.6
4.6
4.7
5.1
6.1
6.4
7.3
8.6
9.6

__
--
—
—
--
--
—
—
—
—
—
—
—
--
—
—
—
—

59.5
60.8
69.8
64.4
86.3
98.2
94.6
99.2
110.2
101.2
101.6
120.2
118.1
125.4
156.0
223.3
277.3
254.6

123.1
129.0
137.4
122.3
222.3
220.0
266.4
223.6
263.7
213.5
241.4
285.4
315.1
330.5
365.9
594.2
640.5
677.5
                                                                                                                                                       CO
                                                                                                                                                        I
                                                                - continued -

-------
TABLE 5.  SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, NORTH DAKOTA REGIONS, 1958-1975 (MILLION DOLLARS)  (CONTINUED)
(A)
Agriculture,
Year Livestock

1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975

1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975

54.3
53.4
41.6
52.6
47.3
50.7
53.2
62.2
71.6
73.5
72.0
72.5
76.2
83.1
103.4
131.7
119.7
118.6

27.4
27.5
21.3
25.8
23.3
24.7
26.3
30.9
35.2
38.3
38.3
38.6
38.9
43.8
58.2
74.7
70.9
70.0
(B)
Agriculture,
Crops

50.2
31.0
40.7
14.1
63.7
54.9
52.5
60.7
66.5
54.6
61.1
67.0
63.3
64.3
96.7
148.4
156.9
160.0

40.7
24.5
26.0
18.2
33.6
43.2
29.9
35.4
46.6
49.0
36.0
36.7
42.4
42.5
64.9
113.6
161.0
91.1
(C) (D) (E) (F) (G)
Wholesale Business &
Contract Trade & Ag Retail Personal
Construction Processing Trade Service Households

3.4
5.1
6.0
4.5
3.0
3.2
5.6
5.7
4.3
4.5
5.0
6.4
4.7
4.2
4.8
2.1
4.4
13.7

1.0
1.5
1.8
1.3
.9
.9
1.6
1.7
1.3
1.3
1.5
2.2
2.0
4.1
1.4
.4
1.8
1.8

11.7
10.3
11.6
11.6
10.5
11.7
12.6
12.6
13.5
15.0
.16.3
25.9
23.7
25.9
27.2
38.9
48.7
49.0

2.6
2.6
3.2
3.6
3.7
4.6
4.9
4.9
5.3
4.0
6.4
10.2
9.3
10.2
10.7
15.3
19.2
19.3
Region
2.8
3.0
2.5
2.9
3.2
3.7
4.4
5.5
7.6
9.2
11.7
12.8
14.5
15.8
14.6
16.0
15.6
19.0
Region
1.2
1.3
1.1
1.3
1.4
1.6
1.9
2.4
3.3
4.0
5.1
5.5
6.2
6.8
6.3
6.9
6.8
8.2
7
.9
1.0
.8
1.0
1.1
1.2
1.5
1.8
2.5
3.1
3.9
4.3
4.8
5.3
4.9
5.3
5.2
6.3
8
.4
.4
.4
.4
.5
.5
.6
.8
1.1
1.3
1.7
1.8
2.1
2.3
2.1
2.3
2.3
2.7

24.3
27.0
30.7
32.1
40.3
41.3
54.5
46.4
53.1
50.7
57.9
77.3
83.8
97.3
113.1
130.5
141.4
169.2

6.2
7.2
8.2
8.3
8.7
9.5
10.7
11.2
12.1
12.1
13.9
22.3
29.3
23.1
23.9
27.2
29.2
35.7
(H) (I) (0)
Petroleum/
Coal Electric Natural Gas
Mining Generating Extraction

.6
.5
.6
.8
.9
.8
1.1
1.3
1.2
1.8
2.1
2.2
2.9
3.2
2.9
3.7
4.4
5.1

.3
.3
.3
.3
.4
.3
.3
.2
.2
.2
.3
.2
.3
.3
.4
.4
.5
2.0

__
—
	
—
—
--
__
—
4.4
8.4
12.3
11.7
13.8
17.5
21.4
19.3
22.4
21.6

_.
—
—
—
__
_.
__
—
__
__
__
	
_.
__
—
—
—
—

__
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—

.8
.7
1.2
2.3
3.6
4.1
4.0
5.4
8.2
11.0
16.9
14.5
16.9
14.7
15.0
18.1
37.6
45.8
(K) (L)
Petroleum
Refining Total

38.8
38.2
37.1
37.4
37.2
37.1
37.9
40.0
42.0
43.9
44.2
44.8
45.7
47.3
50.2
56.8
67.3
75.4

	
..
._
--
._
—
—
—
—
..
._
—
..
__
—
—
—
—

187.0
169.5
171.6
157.0
207.2
204.6
223.3
236.2
266.7
264.7
286.5
324.9
333.4
363.9
439.2
552.7
586.0
637.9

80.6
66.0
63.5
61.5
76.1
89.4
80.2
92.9
113.3
121.2
120.1
132.0
147,4
147.8
182.9
258.9
329.3
276.6

-------
                              - 15 -
       Interdependence coefficients were multiplied by the final  demand
vectors for each of the regions in each of the years in the manner pre-
viously described for North Dakota.  The resulting estimates of personal
income are shown in the first column for each region in Table 6.   The U.S.
Department of Commerce estimate of personal income for each region and the
percentage difference in the two estimates also are presented in Table 6,
as are the estimates of personal income that were derived by disaggregation
procedures for each region and the difference of those estimates from the
input-output based estimates.
       The average differences between the estimates of personal  income
obtained by input-output techniques and those reported by the U.S. Depart-
ment of Commerce were 23.6, 11.0, 3.8, 18.4 percent, for Regions 1, 2, 7,
and 8, respectively (Table 6).  The average of the average differences for
the four regions was 14.2 percent.  Corresponding differences of input-
output estimates from those obtained by disaggregation techniques for the
four regions were 11.9, 12.6, 7.4, and 14.0 percent, for an overall average
difference of 11.5 percent.
       Figures 3, 4, 5, and 6 provide graphic indication of the levels of
personal income reported by the Department of Commerce for the four regions
relative to the levels estimated by the input-output and by disaggregation
techniques.  Although the estimates based on input-output techniques are
somewhat more volatile than the other two estimates, a consistent pattern
is evident for most years.  The years since 1973 appear to involve more
divergence of estimates than is true for other years.  This likely is due,
at least in part, to the fact that some of the data are preliminary, both for
the final demand vectors and the Department of Commerce estimates of per-
sonal income.  These data often are revised several times during the five-
year period following each year.

-------
 TABLE 6.   ESTIMATES  OF PERSONAL INCOME AND DIFFERENCES  IN  ESTIMATES, BY REGION, NORTH DAKOTA, 1958-1975
Year

1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
Average
Dif.a

1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
Average
Dif.a
1-0
Analysis
Estimate
(Mil. $)

45.0
44.3
50.3
44.7
64.7
74.8
70.5
72.8
83.3
77.4
78.2
102.9
99.0
105.8
134.9
199.9
225.9
195.4



159.6
144.1
148.2
135.8
189.3
187.2
210.9
216.6
245.5
236.8
257.4
302.7
312.7
346.0
425.3
530.3
564.3
618.2


Department
of Commerce
Estimate
(Mil. $)

N/A
70.0
N/A
N/A
83.1
N/A
N/A
76.6
78.8
79.6
78.8
87.6
84.7
82.2
102.5
140.2
130.7
N/A



N/A
135.8
N/A
N/A
179.1
N/A
N/A
231.6
243.0
250.6
259.6
298.5
315.8
346.5
409.0
516.8
515.3
N/A


Difference
(X)
State Region 1

-36.7


-22.1


-5.0
+5.7
-2.8
-0.8
+17.5
+16.9
+28.7
+31.6
+42.6
+72.8


23.6
State Region 7

+6.1


+5.7


-6.5
+1.0
-5.5
-0.8
+1.4
-1.0
-0.1
+4.0
+4.5
+9.5


3.8
Disaggregation
Procedure
Estimate
(Mil. $)

57.5
54.6
59.7
51.8
74.6
70.3
64.6
72.9
74.9
73.0
73.5
88.2
87.2
95.3
119.8
203.6
182.9
172.7



157.5
142.0
163.5
144.2
217.5
196.6
201.2
233.1
239.5
239.9
249.6
277.6
284.8
325.0
377.7
495.2
481.9
530.0


Difference
(X)

-21.7
-18.9
-15.7
-13.7
-13.3
+6.4
+9.1
-0.1
+11.2
+6.0
+6.4
+16.7
+13.5
+11.0
+12.6
-1.8
+23.5
+13.1

11.9

+1.3
+1.5
-9.4
-5.8
-13.0
-4.8
+4.8
-7.1
+2.5
-1.3
+3.1
+9.0
+9.8
+6.5
+12.6
+7.1
+17.1
+16.6

7.4
1-0
Analysis
Estimate
(Mil. $)

130.6
131.0
138.2
124.9
244.4
236.2
310.4
236.6
287.8
226.1
262.8
309.7
355.1
367.9
395.9
628.6
676.1
773.6



81.4
67.8
65.0
62.8
76.0
88.9
80.4
92.2
110.3
116.2
111.2
128.0
145.2
142.5
178.9
252.6
307.7
254.0


Department
of Commerce
Estimate
(Mil. $)

N/A
138.2
N/A
N/A
213.2
N/A
N/A
246.9
255.9
265.9
276.3
297.9
302.3
327.8
373.9
560.8
545.7
N/A



N/A
59.4
N/A
N/A
83.8
N/A
N/A
91.8
95.3
95.5
95.8
114.0
116.0
123.5
151.0
220.0
195.5
N/A


Difference
(X)
State Region 2

-5.2


+14.6


-4.2
+12.5
-15.0
-4.9
+4.0
+17.5
+12.2
+5.9
+12.1
+23.9


11.0
State Region 8

+14.1


-9.3


+0.4
+15.7
+21.7
+16.1
+12.3
+25.2
+15.4
+18.5
+14.8
+57.4


18.4
Disaggregation
Procedure
Estimate
(Mil. $)

151.4
150.2
170.0
152.6
227.3
212.8
216.6
249.8
270.9
274.4
287.6
325.3
339.7
378.8
436.7
642.5
603.9
601.0



74.0
58.9
68.2
56.0
88.5
82.2
75.9
91.3
97.4
101.0
95.8
107.8
107.9
126.7
154.5
234.7
236.3
213.6


Difference
(X)

-13.7
-12.8 -
-18.7
-18.2
+7.5
+11.0
+43.3
-5.3
+6.2
-17.6
-8.6
-4.8
+4.5
-2.9
-9.3
-2.2
+12.0
+28.7

12.6

+10.0
+15.1
-4.7
+12.1
-14.1
+7.6
+5.9
+0.1
+13.2
+15.0
+16.1
+18.7
+34.6
+12.5
+15.8
+7.6
+30.2
+18.9

14.0
                                                                                                                                                       I

                                                                                                                                                      I—»
                                                                                                                                                      01
aWithout respect to sign.

-------
North Dakota State Region 1
  Personal Income (Million Dollars)
                                      - 17 -
850
800
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50

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Personal Income by
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1958    60    62    64    66    68    70    72
                                                      74
    Figure 3.  Personal Income in Region 1, North Dakota, as Reported by U.S.  Depart
      ment of Commerce and as Estimated by Input-Output Procedures and Disaggreqa-
      tion Techniques, 1958-1975.

-------
North Dakota State Region 2
  Personal Income (Million Dollars)
                                     - 18 -
850
800
/bU
700
650
600
550
500
450
400
350
300
250
200
150
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50
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-------
                                   - 19 -
North Dakota State Recnm; 7
  Personal Income (Million Dollars)
850
800
750
700
650
600
550
500
450
400
350
300
250
200
150'
100
50

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U.S. Dept. of Commerce
Income Data*
Personal Income by Input-
Output Techniques
Personal Income by
Disaggregation Techniques
Table for 1958, 1960, 1961,
964, and 1975.







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    1958
60
62    64
66
68    70    72    74
    Figure 5.   Personal  Income in Region 7, North Dakota, as Reported by U.S.
      Department of Commerce and as Estimated by Input-Output Procedures and
      Disaggregation T  :niques, 1958-1975.

-------
                                  - 20 -
North Dakota State Region 8
  Personal  Income (Million Dollars)
850
800
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50


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     Figure  6.   Personal  Income in Region 8, North Dakota, as Reported  by  U.S
       Department of Commerce and as  Estimated by Input-Output Procedures  and
       Disaggregation Techniques, 1958-1975.

-------
                                 - 21  -

                              Montana
       The area  in  Montana  that  was of  particular  interest in this study was
a  nine-county  area  in  southeastern Montana  (Figure 7).  Personal income
estimates were made by input-output techniques  for that region and for the
state  of Montana.   Disaggregation procedures also were used to estimate
personal income  in  the region.   The procedures  used were identical to those
used for North Dakota  and North  Dakota's  regions.  Estimates of final demand
vectors for  the  state  and region for  the  years  1958-1975 are presented in
Table  7.  The  resulting estimates of  personal income  for Montana and south-
eastern Montana  are presented  in Table  8  and in Figures 8 and 9.
       Input-output techniques appear to  have a significant downward bias,
both at the  state  level and at the regional  level.  The state level estimate
obtained by  input-output analysis averages  about 25 percent less than that
reported by  the  U.S. Department  of Commerce and the corresponding difference
for the region is  about 27  percent.   Disaggregation procedures for deriving
estimates of personal  income in  the nine  southeastern Montana counties
provided estimates  that were consistently less  than the Department of Commerce
estimates for  the years prior  to 1973.  However estimates based on disaggrega-
tion procedures  rose rapidly in  recent  years so input-output based estimates
averaged 27  percent below those  obtained  by disaggregation procedures also.
However, both  the state and the  regional  estimates based on input-output
analysis differ  from the Department of  Commerce estimates by a rather consistent
amount in the  respective years.

                              Wyomi ng
       Eight counties  in northeastern Wyoming (Figure 10) were regarded as
a  region that  could be  impacted  by coal  development.  The final demand

-------
                                            MONTANA
Figure 7.   Montana and  Nine-County  Region in Southeastern Montana.

-------
TABLE 7.  SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, MONTANA AND SOUTHEASTERN MONTANA, 1958-1975 (MILLION DOLLARS)
(A)
Agriculture,
Year Livestock
(B)
Agriculture,
Crops
(C)
Contract
Construction
(D)
Wholesale
Trade & Ag
Processing
(E) (F) (G)
Business &
Retail Personal
Trade Service Households
(H) (I) (J) (K) (L)
Petroleum/
Coal Electric Natural Gas Petroleum
Mining Generating Extraction Refining Total
Montana
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
240.5
215.8
222.1
215.2
205.9
185.8
201.8
243.9
289.2
267.2
319.4
352.7
355.9
408.6
495.4
564.0
433.1
420.7
220.4
203.0
200.9
167.1
226.7
244.3
225.1
228.2
282.8
289.9
258.3
261.5
329.3
303.0
431.6
575.1
769.9
667.0
16.9
31.3
30.7
30.9
33.9
42.4
52.0
59.1
51.6
52.6
57.7
75.9
79.3
82.6
254.5
58.0
68.3
128.3
58.1
62.3
63.4
67.3
65.8
67.0
69.7
74.0
79.3
80.6
84.0
91.0
98.2
104.7
109.8
129.9
152.9
175.2
36.8
39.8
44.3
52.2
60.1
68.0
75.9
83.8
91.7
99.6
122.5
135.1
148.5
157.8
173.6
187.0
200.4
213,8
12.3
13.3
14.8
17.4
20.0
22.7
25.3
27.9
30.6
33.2
40.8
45.0
49.5
52.6
57.9
62.2
66.5
70.8
Southeastern
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
52.6
50.2
49.0
43.0
38.1
35.3
42.3
51.7
61.2
55.6
62.4
71.6
80.6
90.3
115.2
122.0
107.1
94.8
36.8
25.2
24.8
20.3
26.5
33.3
31.0
26.3
31.1
35.2
33.9
33.6
38.0
32.6
43.4
58.8
90.0
64.6
3.7
6.8
6.7
6.8
7.5
9.3
11.4
13.0
11.3
11.6
12.3
11.5
17.4
23.4
3.5
20.3
12.5
25.4
18.7
19.9
20.0
20.9
20.1
19.8
20.2
21.1
22.2
22.2
23.1
25.5
28.0
30.4
31.9
37.7
44.3
60.0
7.1
7.6
8.5
10.0
11.5
13.1
14.6
16.1
17.6
19.1
23.5
25.9
28.5
30.3
33.3
35.9
38.5
41.0
2.4
2.6
2.8
3.3
3.8
4.4
4.9
5.4
5.9
6.4
7.8
8.6
9.5
10.1
11.1
11.9
12.8
13.6
218.4
246.6
268.3
365.9
317.2
390.5
342.2
418.2
395.2
493.0
570.8
578.6
625.5
672.4
709.3
823.2
914.3
1,023.3
Montana
34.2
38.6
42.0
57.3
49.7
61.1
53.6
65.5
61.9
77.2
83.2
91.6
96.5
101.5
108.2
128.5
160.5
160.8
1.2
1.0
.7
.6
.5
.4
.3
.4
.6
.3
.5
1.4
5.1
12.1
15.9
29.5
43.0
56.5

1.2
1.0
.7
.6
.5
.4
.3
.4
.6
.3
.5
1.4
5.1
12.1
15.9
29.5
43.0
56.5
36.3
40.1
37.9
35.8
42.1
41.6
47.2
50.8
52.2
58.1
64.7
62.9
69.8
79.7
96.9
108.2
116.0
123.8

17.9
50.2
47.3
45.5
54.1
52.9
62.9
66.0
67.8
75.7
84.6
82.6
91.6
104.9
129.3
143.6
152.4
161.2
840.9
853.2
883.1
952.4
972.2
1,062.7
1,039.5
1,186.3
1,273.2
1,374.5
1,518.7
1,604.1
1,681.8
1,873.5
2,344.9
2,537.1
2,764.4
2,879.4

174.6
202.1
201.8
207.7
211.8
229.6
241.2
265.5
279.6
303.3
331.3
352.3
395.2
435.6
491.8
588.2
661.1
677.9
                                                                                                                                                       IN3
                                                                                                                                                       U)

-------
TABLE 8.  ESTIMATES OF PERSONAL INCOME AND DIFFERENCES IN ESTIMATES,  MONTANA AND MONTANA REGION,
  1958-1975
Year
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
Average
Dlf.

1-0
Analysis
Estimate
(Mil. $)
894.2
910.3
951.1
1,070.4
1,050.0
1,170.8
1,108.6
1,287.5
1,357.1
1,501.0
1,668.4
1,743.2
1,905.5
2,028.8
2,427.3
2,731.2
2,967.7
3,098.6


Montana
Southeast Montana
Dept. of Commerce
Estimate
(Mil. $)
1,354.0
1,345.2
1,382.0
1,369.0
1,580.0
1,588.0
1,595.0
1,724.7
1,872.7
1,924.7
2,033.2
2,203.1
2,442.7
2,539.0
2,914.0
3,460.1
3,643.7
4,054.0


Difference
(*)
-34.0
-32.3
-31.2
-21.8
-33.5
-26.3
-30.5
-25.3
-27.5
-22.0
-17.9
-20.9
-22.0
-21.9
-16.7
-21.1
-18.6
-23.6

24.8
1-0
Analysis
Estimate
(Mil. $)
171.2
176.9
180.0
194.3
186.6
209.4
208.3
235.7
246.1
271.3
293.1
318.4
352.1
380.1
427.6
510.8
588.7
585.2


Dept. of Commerce
Estimate
(Mil. $)
N/A
272.3
N/A
N/A
296.9
N/A
N/A
327.5
352.5
370.0
401.8
423.5
470.5
500.9
567.3
644.6
687.8
N/A


Difference
(*)

-35.0


-37.2


-28.0
-30.2
-26.7
-27.1
-24.8
-25.2
-24.1
-24.6
-20.8
-14.4


26.5
Region

Disaggregation
Procedure
Estimate
(Mil. $)
260.7
262.4
266.5
264.3
288.2
300.1
303.9
325.2
348.2
362.5
386.6
417.9
464.7
490.9
556.5
648.5
713.4
776.3


Difference
(%)
-34.3
-32.6
-32.5
-26.5
-35.3
-30.2
-31.5
-27.5
-29.3
-25.2
-24.2
-23.8
-24.2
-22.6
-23.1
-21.2
-17.5
-24.6

27.0
                                                                                                                 I

                                                                                                                 ro

-------
Montana Personal  Income
  (Billion Dollars)
       4.2
                         -  25  -
       4.0


       3.8


       3.6


       3.4


       3.2


       3.0


       2.8


       2.6


       2.4

       2.2


       2.0


       1.


       1.6


       1.4


       1.2


       1.0


        .8


        .6
   1
   3!
.4


.2
   -;
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                                                    r--
                                                      r:
                                                             __i;_
                                     U.S.  Dept.  of Commerce
                                       Income Data
                                            Personal  Income by Input- L
                                              Output  Techniques       F
1958   60   62   64    66    68    70   72   74

Figure 8.   Personal  Income in  Montana, as Reported by the  U.S.  Depart-
  ment of Commerce and Estimated by Input-Output Procedures,  1958-1975

-------
                                        - 26  -
Southeast Montana Region
  Personal  Income (Million  Dollars)
850


800
       - - -I1
   750


   700


   650


   600


   550


   500


   450


   400


   350


   300


   250


   200


   150


   100


    50
             m
             it T >i
                   U.S.  Dept. of Commerce
                      Income Data*

                   Personal Income  by Input-
                      Output Techniques
      x—x—x  Personal  Income by Disaggrega-TUf
                  tion Techniques
       *Not available for 1958,  1960, 1961,
         1963,  1964, and 1975.
       iii
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1958

Figure
                           1
            60    62     64    66     68     70    72     74

           9.  Personal  Income  in  Southeast Montana as Reported bv U S
                                          by Input-Output Procedure^

-------
                                 WYOMING
Figure  10.  Wyoming  and Eight-County Region in Northeastern Wyoming.

-------
                                - 28 -

vectors that were assembled for that region and for the state of Wyoming are
presented in Table 9.   Procedures for using input-output analysis to estimate
personal income in Wyoming were the same as for North Dakota and Montana.
The same procedures used in disaggregating personal income to the county
level for North Dakota and Montana also were used for Wyoming.  Estimates of
personal income obtained by input-output procedures were expressed as per-
centage differences from Department of Commerce estimates at the state and
regional level (Table 10).  Similar comparisons were made at the regional
level of input-output based estimates and those obtained by disaggregation
procedures.  Input-output estimates of personal income averaged about 15
percent less than Department of Commerce estimates at the state level and 22
percent less at the regional level.  Input-output estimates of regional
personal income averaged 19.5 percent less than those obtained by disaggre-
gation procedures.
       As was true for North Dakota and Montana, the input-output based
personal income estimates for Wyoming (Figure 11) and northeastern Wyoming
(Figure 12) are somewhat more erratic than the other types of estimates.
However, except for the years since 1973, the three types of estimates
parallel each other rather consistently.  As is likely for the other two
states, divergence in recent years may be reduced as preliminary data are
revised by state and federal agencies.

                            CONCLUSIONS
       The results of the work conducted under Phase I of this study indicate
that the input-output coefficients developed for North Dakota provide satis-
factory estimates of personal income in the four western regions of North
Dakota.  The 17 sector model (which includes coefficients collected in

-------
TABLE 9.  SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, WYOMING AND NORTHEASTERN WYOMING, 1958-1975 (MILLION DOLLARS)
           (A)
(8)
(C)
(K)
                                                    (0)       (E)        (F)         (G)        (H)       (I)          (0)
                                                Wholesale           Business &                                 Petroleum/
      Agriculture,   Agriculture,     Contract    Trade &  Ag   Retail   Personal                Coal     Electric   Natural  Gas   Petroleum
Year   Livestock       Crops       Construction  Processing   Trade    Service   Households  Mining  Generating   Extraction   Refining    Total
Wyoming
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
135.4
135.2
129.2
123.6
122.6
128.1
125.0
145.1
174.6
161.4
186.0
199.4
195.6
218.0
281.8
328.6
235.5
250.3
38.7
44.2
37.9
38.5
33.7
44.0
40.7
35.2
44.8
47.0
50.8
50.9
52.8
56.9
74.4
79.9
122.6
101.5
20.2
29.1
26.1
25.8
27.8
38.9
36.5
48.3
38.3
37.3
41.5
38.8
37.3
35.8
44.9
32.9
30.6
96.8
22.9
25.2
26.2
27.0
28.2
24.2
27.3
26.3
28.2
29.1
31.4
34.9
38.4
40.8
42.0
49.3
64.9
71.0
26.3
27.0
28.1
37.8
47.5
57.2
67.0
76.7
86.4
96.1
105.8
115.6
125.3
135.0
144.7
155.9
165.1
177.4
8.9
9.0
9.4
12.6
15.8
19.1
22.3
25.6
28.8
32.0
35.3
38.5
41.8
45.0
48.2
52.0
55.2
59.1
Northeastern
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
52.3
52.5
48.5
47.7
43.5
47.2
46.7
54.2
64.8
57.5
68.6
73.4
73.0
80.9
105.0
126.9
90.8
96.5
4.9
5.4
4.2
3.3
5.6
6.7
5.4
5.1
5.4
6.8
5.3
5.5
5.9
5.8
8.2
10.5
10.4
9.1
7.4
10.6
9.5
9.4
10.2
14.2
13.3
17.6
14.0
13.6
11.8
14.8
13.5
12.9
19.9
12.0
11.4
34.2
10.3
11.1
11.4
11.6
12.0
10.2
11.5
10.9
11.6
12.0
14.1
17.4
21.1
24.5
26.9
31.5
41.6
45.4
8.2
8.4
8.7
11.7
14.7
17.7
20.8
23.8
26.8
29.8
32.8
35.8
38.8
41.9
44.9
48.3
51.2
55.0
2.8
2.8
2.9
3.9
4.9
5.9
6.9
7.9
8.9
9.9
10.9
11.9
13.0
14.0
14.9
16.1
17.1
18.3
155.7
172.6
182.4
172.1
181.8
303.2
237.7
210.7
224.3
250.7
276.4
298.7
306.6
314.5
349.0
568.8
456.8
505.9
Wyoming
36.4
40.3
42.6
110.2
42.5
70.9
55.6
49.2
52.4
58.6
68.5
73.8
72.8
71.7
79.3-
120.6
102.8
126.0
3.0
3.5
3.6
4.7
3.9
4.9
3.9
3.3
4.1
3.3
3.2
3.7
13.1
14.9
21.3
31.7
38.6
45.8

1.5
2.3
2.4
2.8
3.0
3.3
3.7
3.8
4.2
4.3
4.4
4.5
6.6
7.0
8.0
10.6
12.8
14.9
14.2
13.8
13.5
12.0
10.5
9.0
7.5
6.0
8.3
9.9
12.6
14.4
16.2
15.0
22.8
27.9
33.9
38.7

10.2
9.8
9.5
8.4
7.4
6.3
5.3
4.2
5.8
6.8
8.8
10.1
11.3
10.5
15.9
18.6
22.4
25.3
212.2
222.7
234.7
253.6
243.3
245.5
250.1
249.0
243.8
250.3
269.8
300.2
306.0
312.7
352.6
405.6
446.3
488.5

59.6
65.1
69.9
72.7
69.1
73.6
80.8
85.6
86.6
89.4
97.9
117.3
140.1
143.3
162.0
186.8
198.3
211.5
87.0
92.8
95.6
103.8
110.1
109.9
97.4
103.6
106.2
100.6
110.7
117.3
127.7
140.2
158.3
174.4
189.6
202.3

52.0
55.7
57.4
62.3
66.1
65.8
58.4
62.2
63.7
60.4
66.4
70.4
76.6
84.1
95.0
104.6
112.8
122.1
724.5
775.1
786.7
811.5
825.2
984.0
915.4
929.8
987.8
Ii017.7
1,123.5
1,212.4
1,260.8
1,328.8
1,540.0
1,907.0
1,839.1
2,037.3

245.6
264.0
267.0
274.0
279.0
321.8
308.4
324.5
344.2
349.1
339.5
434.9
472.7
496.6
580.0
686.5
671.6
758.3

-------
TABLE 10.  ESTIMATES OF PERSONAL INCOME AND DIFFERENCES  IN  ESTIMATES,  WYOMING AND WYOMING  REGION,
  1958-1975
Year
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
Average
Dif.

1-0
Analysis
Estimate
(Mil. $)
569.2
613.4
620.6
614.6
629.7
844.5
740.1
727.1
790.5
826.6
916.8
985.6
1,015.7
1,069.1
1,244.4
1,676.3
1,487.6
1,635.8


Wyoming
Northeast Wyoming
Dept. of Commerce
Estimate
(Mil. $)
668.0
723.3
744.0
774.0
802.9
819.0
832.0
863.0
898.7
946.5
1,010.9
1,123.8
1,272.9
1,313.0
1,479.6
1,725.7
1,941.4
2,294.0


Difference
(%)
-14.8
-15.2
-16.6
-20.6
-21.6
-3.1
-11.0
-15.7
-12.0
-12.7
-9.3
-12.3
-20.2
-18.6
-15.9
-2.9
-23.4
-28.7

15.3
1-0
Analysis
Estimate
(Mil. $)
173.3
186.0
185.9
184.7
188.5
241.6
218.5
222.5
240.8
246.5
279.9
307.7
321.2
335.1
394.5
498.3
451.4
520.9


Dept. of Commerce
Estimate
(Mil. $)
N/A
257.5
N/A
N/A
276.7
N/A
N/A
297.6
302.4
306.4
341.1
388.1
428.0
434.4
486.0
545.7
606.6
N/A


Difference
(X)

-27.8


-31.9


-25.2
-20.4
-19.5
-17.9
-20.7
-25.0
-22.9
-18.8
-8.7
-25.6


22.0
Region

Disaggregation
Procedure
Estimate
(Mil. $)
216.5
231.2
240.0
249.3
255.6
260.8
261.4
269.8
279.8
289.5
315.2
356.2
407.5
417.6
479.6
572.0
694.4
806.2


Difference
(*)
-20.0
-19.5
-22.5
-25.9
-26.3
-7.4
-16.4
-17.5
-13.9
-14.9
-11.2
-13.6
-21.2
-19.8
-17.7
-12.9
-35.0
-35.4

19.5
                                                                                                                CO
                                                                                                                o

-------
Wyoming Personal Income
  (Billion  Dollars)
                          - 31 -
H. L
4.0
3.8
3.6
3.4
3.2
3.0
2.8
2.6
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
.8
.6
.4
.2
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1958   60   62   64   66   68   70   72
                                             74
  Figure 11.  Personal Income in Wyoming, as Reported by the U.S.  Depart-
    ment of Commerce  and Estimated by  Input-Output Procedures, 1958-1975.

-------
                            - 32 -
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.S. Dept. of Commerce :
Income Data*
ersonal Income by Input-
Output Techniques
arsonal Income by Disaggre- '',
gation Techniques \-
able for 1958, 1960, 1961, r
54, and 1975. t
   1958    60    62    64    66    68    70    72    74

   Figure  12.   Personal  Income in  Northeast Wyoming,  as  Reported by
     the U.S.  Department of  Commerce and Estimated  by Input-Output
     Procedures, 1958-1975.

-------
                                - 33 -

Phase  I for the coal mining, coal fired thermal electric generating, petro-
leum and natural gas extraction, and petroleum refining sectors) provides
personal income estimates that coincide more closely with Department of
Commerce estimates than do  those obtained with the earlier 13 sector model.
It appears that the input-output model can be used for estimating the
potential effects of coal resource development in North Dakota.
       The model does  not perform as well for northeastern Wyoming and
southeastern Montana as in  North Dakota.  It appears to provide estimates
that consistently underestimate personal income in Montana and Wyoming. The
downward bias  of the estimates at the state level for the two states may be
partially due  to the fact that the 17 sector model does not include some
sectors (such  as metalic mining and forestry) for those states.  Some of
the differences between input-output estimates of personal income and
Department of  Commerce estimates for the study regions in the two states
may be due to  an upward bias in Department of Commerce estimates.  However,
procedures employed in this study to disaggregate state level personal
income yielded results that suggest that the upward bias in Department of
Commerce estimates is  not great.
       The fact the input-output model invariably underestimates personal
in Montana and Wyoming implies that the model leaves something to be
desired for describing the  level of economic activity in those states.
However, the model does provide estimates that appear to "track" quite
consistently with Department of Commerce data, but with a predictable
downward bias.  The rather constant downward bias in the historical com-
parison may allow the model to be used for impact analysis of coal resource
development in the two states.   In other words, even though the model

-------
                               - 34 -

underestimates personal  income throughout the historical comparison period,
year-to-year changes estimated by the model compare quite favorably with
those reported by the Department of Commerce.

                 RECOMMENDATIONS FOR FURTHER WORK
       It is not recommended that work be initiated on Phase II at this
time.  The reason is that some additional work similar to that envisioned
for Phase II will be conducted at North Dakota State University later in
1977.  Part of this work includes modifying the input-output technical
coefficients with location coefficients (that reflect industry mix) for
the respective region in the three states.  It is possible that the bias of
the input-output model (which appears to be related to population density
of the regions) may be reduced by this procedure.
       Additional work is also scheduled under an agreement with the North
Dakota Regional Environmental Assessment Program (REAP).  This will involve
expansion and refinement of the REAP Economic-Demographic Model.  The results
of this work will provide measures of the reliability of the model for
projecting personal income, employment, and population (and also other
variables) in each of the eight regions in North Dakota.  Since the inter-
dependence coefficients are an integral component of this model, that work
will contribute information regarding the usefulness of those coefficients
for evaluating impacts of coal resource development in North Dakota, Montana,
and Wyoming.
       If the results of those efforts warrant it, further consideration
can be given to implementation of Phase III of this project.

-------
                               - 35 -
                            APPENDIX A

            PROCEDURES AND DATA SOURCES FOR ESTIMATING
                       FINAL DEMAND VECTORS

       The economic base for North Dakota and eastern Montana and Wyoming

consists almost entirely of receipts of 11 basic sectors.  These sectors

are:  agriculture, livestock; agriculture, crops; construction; wholesale

trade and agricultural processing; retail trade; business and personal

service; households; coal mining; thermal-electric generation; petroleum/

natural gas exploration/extraction; and petroleum refining.  [The Standard

Industrial Classification (SIC) Code description for each of the 17 sectors

involved in the input-output model are presented in Table 1 of the report.]

       The sectors included as final demand vectors in input-output analysis

are referred to as "basic sectors" because they constitute the economic base

of the area.  Sales by these sectors typically are the sources of income

from outside the area that generate gross business volume, not only to the

basic sectors, but to the other trade and service sectors within the local

economy.  These sectors are the ones through which income is injected into

the area as purchases of agricultural, mine, or manufactured products; by

the federal government for construction or for payrolls; and by tourist

expenditures to the retail trade or business and personal service sectors.

       Data were collected for North Dakota, Montana, and Wyoming at the

state and county levels.  County data were necessary because counties then

were grouped together to form regions.  North Dakota State Regions 1, 2, 7,

and 8, nine southeastern Montana counties (Big Horn, Carter, Custer, Fallen,

Musselshell, Powder River, Rosebud, Treasure, and Yellowstone), and eight

counties in northeastern Wyoming (Campbell, Crook, Converse, Johnson,

Natrona, Niobrara, Sheridan, and Weston) were considered in the study.  The

-------
                                  - 36 -
sources of data for the three states  came from identical  or similar sources
and the methodology involved in  calculating the sales for final  demand for
the states were the same.
                    Agriculture. Livestock (Sector 1)
       The data for agriculture, livestock consists of total  receipts from
sales of livestock and livestock products.  These data were published every
year from 1958 to 1975 at the county  and state level  for  Montana,  but only
at the state level for North Dakota2  and Wyoming.   The Montana  Region final
demand vector was obtained by adding  livestock sales  receipts in the nine
counties in the region.  North Dakota and Wyoming livestock final demand
vectors were obtained by allocating state livestock receipts  to  the regions.
This was done by multiplying production at the county level by price for the
major  livestock enterprises.  The Allocator for the region was the share of
state  total product that was accounted for by counties in the study
region.

                    Agriculture, Crops (Sector 2)
       The total receipts and government payments for crops comprised the
agriculture, crops final demand vector.  These data were  published annua.Tly
           4
for Montana  at the county and state  level, but only at the state level for
        Montana Agricultural Statistics. Montana Department of Agriculture
cooperating with U.S. Department of Agriculture, Statistical  Reporting Service,
Helena, Montana, December, 1962, 1964, 1968,  1970,  1974,  and 1976.
       2
        North Dakota Crop and Livestock Statistics, North Dakota State University,
Agricultural Experiment Station, cooperating  with U.S.  Department of Agriculture,
Statistical Reporting Service, Fargo, North Dakota, May,  1960-1976.
        Wyoming Agricultural Statistics, Wyoming Crop and Livestock  Reporting
Service, issued by Wyoming Department of Agriculture, the University of Wyoming,
and U.S. Department of Agriculture, Statistical  Reporting Service,  Cheyenne,
Wyoming, 1960-1976.
       4
        Montana Agricultural Statistics, op.  cit.

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                                   37 -


North  Dakota0  and Wyoming.   The crops total receipts and the government

payments  for each county  in the region were added to obtain the region

final  demand vector  for Montana,  The state crop receipts and government

payments  were  allocated to the regions for North Dakota and Wyoming in the

same method as were  livestock receipts.  The major crop enterprises were

used to allocate total crop receipts to the regions, then government pay-

ments  were allocated  to the regions  in the same proportion that crop receipts

were allocated to each respective region.


                          Construction (Sector 4j

       The construction industry generates dollar volumes basically in the

form of highway construction funded  by federal government revenues.  The

amount of federal expenditures for highway construction for North Dakota,

Montana,  and Wyoming  was  available at the state level for the years 1958-

1968.   The reporting procedure for  these data changed in 1967 and actual

federal expenditures  for  North Dakota,  Montana,  and Wyoming   were avail-

able at county and state  level.  Federal government outlays for construction

in the respective regions for the years 1958-1966 were estimated by allocating

state  totals on the basis of regional shares reported for the years 1967-1975.
        North Dakota Crop and Livestock Statistics, op_. cit.

       6Wyoming Agricultural Statistics, o£. cit.

        U.S. Treasury Department, Annual Report of the Secretary of the
Treasury on the State of the Finances, 1960-1968, U.S. Government Printing
Office, Washington, D.C.
       Q
        U.S. Department of Commerce, Federal Outlays in North Dakota, Office
of Economic Opportunity, National Technical Information Service, Washington,
D.C., 1967-1975.
       g
        U.S. Department of Commerce, Federal Outlays in Montana, Office of
Economic Opportunity, National Technical Information Service, Washington,
D.C., 1967-1975.

         U.S.  Department of Commerce, Federal  Outlays in Wyoming, Office of
Economic Opportunity, National Technical Information Service, Washington,
D.C.. 1967-1975.

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                                  38 -
          Wholesale Trade  and Agricultural  Processing (Sector 7_)
       Gross output of the wholesale and agricultural processing  sector
consists principally of the value of miscellaneous manufacturing,  much of
which is food processing.   Also included are rather insignificant levels of
wholesaling activities, if that activity exceeds  that of the benchmark
region (Region 8 in North  Dakota).   Several  sources provided the  data for
these estates.11'12'13-U'15

                             Retail  (Sector 8)
       Final demand vectors for the  retail  trade  sector consist of three
fourths of the dollar volumes of tourism expenditures in the area.   (The
other one-fourth is assumed to be to the Business and Personal  Service
Sector.)  North Dakota tourism receipts  are estimated and published annually
at the state level.    The business  volume  for  tourism was allocated to the
regions on the basis of the region's share  of state population.   The assump-
tion was that areas with higher populations are more likely to  possess the
services necessary to maintain a tourist trade.
         New Health—North Dakota, Greater North Dakota Association, North
Dakota State Chamber of Commerce,  North Dakota,  1958-1975.
       12
         U.S. Department of Commerce,  Bureau of  Economic Analysis,  Personal
Income by Place of[Residence.  Montana,  Wyoming,  Washington,  D.C.,  1976.
       13
         U.S. Department of Commerce,  Census of  Business:  Wholesale Trade,
North Dakota. U.S. Government Printing  Office, Washington, D.C.,  1958,  1963,
1967, and 1972.
       14
         U.S. Department of Commerce,  Census of  Business:  Wholesale Trade,
Montana. U.S. Government Printing  Office,  Washington,  D.C.,  1958,  1963,  1967,
and 1972.
         U.S. Department of Commerce,  Census of  Business:  Wholesale Trade.
Wyoming, U.S. Government Printing  Office,  Washington,  D.C.,  1958,  1963,  1967,
and 1972.
         New Wealth—North Dakota, £p_.  cit.

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                                   -  39  -




        The  Travel  Promotion  Unit of  the Montana Department of Highways made



 tourism estimates  for  1967 to  1972 for  the state based on such items as gas



 tax  receipts, motel  receipts,  and  number of cars counted by car counters.



 Straight-line interpolation  of the 1967 to 1972 data was used to estimate



 Montana tourism for  the  1973 to 1975 period.  Using straight-line inter-



 polation backward  from the 1967 to 1972 data would have resulted in a very



 small  dollar amount  of tourism expenditures for 1958.  Because of the



 similarities  of Montana  with North Dakota  and Wyoming, such as geographic



 attractions and respective locations, a percentage increase in tourism similar



 to that of  North Dakota  and  Wyoming  for 1958 to 1966 was used for that time



 period in Montana.   The  business volume of tourism allocated to the region



 in Montana was  on  the  basis  of proportion of the state's population in that



 region,  which involved the same assumption as was made for North Dakota.



        Data on  tourism in Wyoming were  very limited.  The volume of tourism


                                                                         18
 was  estimated for  the  state  in a 1961 study at the University of Wyoming.



 No other estimates were  made until 1971 when the Family Research Institute


                                19
 estimated tourism  in the state.    Straight-line interpolation was used to



 make estimates  of  tourism for  years  not provided by the two studies.  The



 business  volume of tourism allocated to the region in Wyoming was based on



 the proportion  of state  population in the region.
       17Montana Travel  Industry, Montana Department of Highways, Travel

Promotion Unit, 1967-1972, Billings, Montana.



       18Lund, Richard E., Study on Tourism  in Wyoming, University of Wyoming,

Laramie,  1971.

       19
         Family Research  Institute estimated based on  1971 data for article

in Better Homes and Gardens Magazine,  1972 edition.

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                                  - 40 -
                 Business and Personal  Service (Sector ]0)
       After the dollar volume generated by tourism has been calculated and
allocated to retail  trade, the remaining tourist expenditures (25 percent)
are treated as final demand to the business and personal service sector.

                           Households (Sector 12)
        ie~Tederal government generates basic income to the household sector
through payrolls and transfer payments.  Federal  aid to states and individuals
is published annually for North Dakota, Montana,  and Wyoming for 1968 to
1967.20  Defense expenditures, veteran's benefits, Old Age and Survivors'
Insurance payments, Workmen's Compensation, and the federal payroll are also
                         21
included as basic income.    The household sector final demand vectors for
North Dakota, Montana, and Wyoming were calculated by adding total grants
(less highway construction), defense expenditures (except for construction),
veteran's benefits, Old Age and Survivors' Insurance, Workmen's Compensation,
and federal payrolls.
       Total federal expenditures in the states were available on a county
basis for 1967 to. 1975 for North Dakota,22 Montana,23 and Wyoming.24  The
final demand vector for 1967 to 1975 Was calculated as follows:  farm
payments (included as income in Sector 2), construction outlays, and loans
were subtracted from the total federal expenditures to obtain final demand
vectors at county and state level.   The percentage the region was of the
       20
         U_._S.  Treasury Department, op.  cit.
       21
         U.S.  Department of Commerce, Bureau of Economic Analysis, Personal
Income by Place of Residence, Montana.  Wyoming, Washington, D.C., 1976"!	
       22
         U.S.  Department of Commerce, Federal  Outlays ]n_ North Dakota, op. cit.
       23                                                            '   ' 	'
         U.S.  Department of Commerce, Federal  Outlays i^ Montana^, op. cit.
       24                                                           ' 	'
         U.S.  Department of Commerce, Federal  Outlays jj^ WyotTm^ o£. cit.

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                                   - 41 -


state  for  1967  to  1975 was  used  to  allocate  the  household final demand vector

to  the regions  for the years  1958 to  1966.


                          Coal Mining  (Sector  14)

        The total receipts from sales  of  coal nonlocally comprised the coal

mining final  demand vector.   The production  and  value per ton were available

by  mine for North  Dakota  for  the years  1958  to 1975.25  All coal mined in SR 2

was assumed to  be  used domestically while in SR  8 all the coal from the Gascoyne

mine was assumed to be exported.  Coal mined in  SR 1 and SR 7 was assumed

to  be  exported  in  the same  proportion as all North Dakota coal.

        Production  and average value per  ton  of coal was available by county
                                 27
for Montana for the study years.    All  coal mined in the region was assumed

to  be  sold outside the region.

        Wyoming  coal  production and average value per ton was available for
                                   28
the study  period on a county  basis.    Coal  exported from Wyoming was assumed
                                                                   29
to  be  total coal production less coal used for electric generation.
       25
         North Dakota State Mine  Inspector, North Dakota Annual Coal Mine
Report, Workmen's Compensation Department, Bismarck, North Dakota, 1958 to
1975.
       ?fi
         West, James G., unpublished memorandum to the National Energy
Considerations Work Group of Northern Great Plains Resources Program, U.S.
Department of the Interior, Washington, D.C., 1973.

       27Minera1s Yearbook, Volumes I and  II, Metals, Minerals, and Fuels.
U.S. Department of the Interior,  Bureau of Mines, U.S. Government Printing
Office, Washington, D.C., 1958-1973.

       28Ibid.

       29Federal Power Commission, Steam-Electric Plant Construction Cost
and Annual Production Expenses, 22nd Annual Supplement - 1969.

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                                  -  42  -


                 Thermal-Electrical  Generation (Sector 1_5)

       Sales of electricity outside  the local  region generated by burning

coal constituted the thermal-electrical generation final  demand vector.

North Dakota thermal-electrical  production was available  for 1966 to 1975.

No coal fired electricity was available for export prior  to 1966 in North

Dakota.  All thermal electricity available for export in  North Dakota was

produced in SR 7.  Values were assigned to exported electricity to arrive
                                               31
at the electric generation final demand vector.

       Montana was assumed to have no thermal  electricity available for export

because of its limited electrical  generation facilities and is a net importer
               32
of electricity.
                                                                     33  34
       Wyoming electrical production was  available on a  limited basis  '

for the study years.  The proportion of electricity exported was assigned

a value and considered to be  the thermal  electric  generation final  demand
                   35
vector for Wyoming.
         Annual  Report of the North  Dakota  Public  Service  Commission t£ the
Governor and Secretary of State,  75th,  76th,  77th,  78th, 79th,  80th, 81st,
82nd, 83rd, 84th,  85th Annual,  Public Service Commission,  Bismarck,  North
Dakota, June, 1966,  1968, 1970, 1972, 1973,  1975.

         Owen, WaJley, Public Service Commission,  Bismarck,  North  Dakota,
interview estimates  were made on  basis  of published reports  by  major
electricity producing companies.
       30
         Montana Dakota Utilities,  telephone  conversation, Bismarck, North
Dakota, February,  1976.

       33
         Wyoming Energy Consumption, Minerals.  Fuels,  Electric  Generation.
and Agricultural Sectors, Bickert,  Browne,  Coddington,  and Associates,  Inc.,
Denver, Colorado,  June, 1975.

       34
         Steam-Electric Plant Factors-1972.  National  Coal  Association,
Washington, D.C.,  1972.

         Walker, David, Engineering  Division, Wyoming Public Service Commission,
Cheyenne, Wyoming, telephone interview.

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                                 - 43 -


         Petroleum/Natural Gas Exploration/Extraction (Sector J_6)

       Export sales of petroleum and natural gas from the local region con-

stituted the final demand vector for Sector 16.  North Dakota crude oil pro-

duction was available by county for all years in the study period.36  Values

of the crude oil were assigned and export locations were determined to arrive

at the final demand vectors for the regions and North Dakota.  North Dakota

is a net importer of natural gas so no final demand vector was calculated

for it.

       Montana crude oil production was available for the years 1958 to 1975

by oil field.    Prices were assigned to the crude petroleum38 and origin of
                39
exports was used   so the final demand vector could be calculated.  Natural

gas production data also were available for Montana.40  Prices were assigned
                  41
to the natural gas   and export locations determined.  Montana was a net

importer of natural gas (from Canada and Wyoming) so no  export sales were assumed,
         Wilborne, Jack, North Dakota Geological Survey Data, University of
North Dakota Campus, Grand Forks, North Dakota.

         Oil and Gas Conservation Commission of the State of Montana,
Statement of Crude Oil Production and Valuation, all Montana Fields, Oil,
and Gas Conservation Commission, Helena, Montana, 1958-1975.

       38United States Average Wholesale Prices of Crude Oil and Petroleum,
Products in Eight Refining Markets, Prospective Regional Markets for CoaJ
Conversion Plant Products Projected ^o 1980 and 1985. prepared for Office
of Coal Research, U.S. Department of the Interior, by Energy Division,
Foster Associates, Inc., Washington, D.C., September 16, 1974.

       39Lawson, Jim, Cenex Petroleum Refining, Glendive, Montana, telephone
interview; Mr. Peterson, Continental Oil Company, Montana,  telephone interview.

       40Montana Gas Production Data, Oil and  Gas Conservation Commission,
Helena, Montana, 1958-1974.

       41United States Average Wholesale Prices of Crude Oil and Petroleum,
op. cit.

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                                 - 44 -


       Wyoming crude oil    and natural  gas   production data were available
                                                                         44
by year for each oil and  gas field.   Values were assigned to the products

and export amounts and locations were determined   to arrive at the petroleum/

natural gas by location/extraction final demand vector for Wyoming.


                      Petroleum Refining (Sector 17)

       Export sales of refined petroleum products were calculated for the

petroleum refining final  demand vector.  North Dakota data were not readily

available but interviews  provided data as to total petroleum products, export

destinations, and a refined product breakdown.46' 4 '     Values were

assigned to the exported  refined products to estimate the final demand vector
                                                  49
for the petroleum refining sector in North Dakota.
       42
         Oil Production--Wyoming, by Producers and Fields,  Wyoming Oil  and
Gas Conservation Commission, Casper, Wyoming, 1958-1974.

       43
         Gas Production—Wyoming, by Producers and Fields,  Wyoming Oil  and
Gas Conservation Commission, Casper, Wyoming, 1958-1974.

       44
         United States Average Wholesale Prices of Crude  Oil  and Petroleum,
         Wyoming Energy Consumption, Minerals, Fuels, Electric Generation,
op. cit.

       45

and Agricultural  Sectors,  ojx  cjt.

       46
         Feeny, Joe,  Amoco Oil  Company,  Mandan,  North  Dakota,  telephone
interview, he gave estimates  on total  production,  exports,  and breakdown
of refined products for 1958  to 1974.

       47
         Public Relations  Department,  Westland Oil  Company,  Williston,  North
Dakota, telephone interview,  he gave  estimates of  production,  exports,  and
breakdown of refined  products  for 1958 to  1974.

       48
         Mr. Thomas,  Northland  Oil  Company,  Dickinson,  North Dakota,  telephone
interview, he gave estimates  of production,  exports, and  breakdown of
refined products  for  1958  to  1974.

       49
         United States Average Wholesale Prices  of Crude  Oil and Petroleum,
op. cit.

-------
                                 - 45 -

       Montana data were available on petroleum refining by refinery for

the years 1958-1975.    Prices were assigned to refined products51 and
                                       CO
export amounts and locations determined   so the petroleum refining final

demand vector could be calculated.

       Wyoming data on crude petroleum oil refined were available for the

years 1958-1975.    Values were assigned to the refined products54 and
                                       r r  EC
estimates of amounts exported were made  '    so the final demand vector

could be calculated for the petroleum refining sector.
         Oil and Gas Conservation Commission of the State of Montana, Barrels
of Crude Oil Refined in Montana, Oil and Gas Conservation Commission, Helena,
Montana.
       51
         United States Average Wholesale Prices of Crude Oil and Petroleum,
op. cit.
       52
         Lawson, Jim, Cenex Petroleum Refining, op. cit.
       CO
         Minerals Yearbook, Volume III, U.S. Department of the Interior,
Bureau of Mines, U.S. Government Printing Office, Washington, D.C., 1958-
1973.
         United States Average Wholesale Prices of Crude Oil and Petroleum,
op. cit.
       55Goodier, John, Chief, Mineral Development. Department of Economic  Planni
   and Development, Cheyenne, Wyoming, telephone interview, February,  1976.

       56Wyoming Energy Consumption. Minerals, Fuels,  Electric Generation,  and_
   Agricultural Sectors. OJD. cit.

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                               - 46 -

                            APPENDIX B
                 DISAGGREGATION OF PERSONAL INCOME
       Personal income is perhaps the best criterion for determining the
accuracy with which an input-output model  measures the level of economic
activity of the state or state region.  Personal income reported by the
United States Department of Commerce may be compared to that estimated
by the input-output model at the state and substate level.  However, the
personal incomes that are reported for the substate levels of aggregation
may be subject to significant errors of estimate.  Therefore, an alternative
procedure  was used to provide additional  estimates of personal income at
the substate level.  This procedure was developed prior to estimated levels
being published for substate areas.
       The United States Department of Commerce annually publishes data
                                                                     2
delineating total state personal income as the sum of six components.
These disaggregation techniques allocate each of the six components of per-
sonal income to its industrial and geographic origin.  The allocator used
reflects economic activity similar to that which would generate a specific
component of personal income.  Separate allocation techniques were used
for each of the six components:  wage and salary payments, proprietor's
income, property income, other labor income, transfer payments, and
individual contributions for social insurance.
        Senechal, D. M., Analysis of Validity of North^ Dakota_ Jjipj-
Models, unpublished M.S. thesis, Department of Agricultural Economics, North
Dakota State University, Fargo, 1971.
       2
        U.S. Department of Commerce, Bureau of Economic Analysis, Personal
Income by Place of Residence, intermediate table, Montana, North Dakota, and
Wyoming, 1976.

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                                  - 47  -
                         Wage and Salary Payments

       The allocator used to calculate each industry's wage and salary

payments among the counties was the portion of state total  reported wage

and salary payments which occurred in a county.  The data used to formulate

these allocators were based on United States Department of Commerce census

data.  These census publications were published only at intervals so

straight-line interpolation was used to provide allocators  for the intervening

years.  Information for calculating agricultural  crops and livestock allocators

was available for 1959, 1964, 1969, and 1974.3  Data for wholesale, retail,

and service sectors were available for 1958, 1963, 1967, and 1972.4' 5' 6

Wage and salary payments are not reported for mining, manufacturing, trans-

portation, construction, communications, and public utilities, finance-

insurance-real estate, and government sectors.   State totals of wage and

salary payments in these sectors were allocated to the county level on the

basis of employment (weighted by average retail wage in the county) in each

sector in the respective counties in 1960 and 1970.
        3U S   Department  of  Commerce,  Census^ of Agriculture, Montana, North
Dakota, and Wyoming,  1959,  1964,  1969, and  1974, Washington, D.C.

        4U S   Department  of  Commerce,  Census, of Business,:  Wholesale Trade,
Montana, North  Dakota, and  Wyoming, 1958, 1963, 1967, and 1972, Washington, D.C.

        5U S   Department  of  Commerce,  Census of Business:  Retail Trade,
Montana, North  Dakota, and  Wyoming, 15587T963, 1967, and 1972, WisTmTgton,
D.C.

        6U.S.  Department  of  Commerce,  Census of Business:  Selected Services,
Montana, North  Dakota, and  Wyoming, 1958, 1963, 1967, and 1972, Washington, D.C,

        7U S.  Department  of  Commerce,  Census of Population,  Montana, North
Dakota, and Wyoming,  1960 and 1970, Bureau  of the  Census, Washington,  D.C.

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                               - 48 -

       The annual  average wage in retailing was  obtained for each county
by dividing total  county retail  wages by the number of employees earning
these wages.   Retail  wages were  used because they represent the most general
coverage of any wage average and because retail  wages provide an indication
of differences among counties in wages and income.

                        Other Labor Income
       Other labor income is composed of Workmen's  Compensation payments,
employee benefits, military reserve pay, and several  minor items.  The
state total for other labor income was allocated to each county in the
same proportion as the total of wages and salaries  received within the
county.
                        Proprietor's Income
       Proprietor's income measures the net receipts  of all nonincorporated
enterprises, including net income of farmers, professional persons, and
others in a self-employed status.  A percentage  ratio expressing the relation-
ship of a sector's total county sales to total  state  sales was computed.
The data needed for these computations were available for each year for both
                              o
crop and livestock production.   County allocators  for proprietor's income
       o
        Montana Agricultural  Statistics,  Montana Department of Agriculture
cooperating with U.S. Department of Agriculture, Statistical  Reporting Ser-
vice, Helena, Montana, December, 1962,  1964,  1968,  1970,  1974, and 1976.
       North Dakota Crop and  Livestock  Statistics,  North  Dakota State
University, Agricultural Experiment Station,  cooperating  with U.S. Depart-
ment of Agriculture, Statistical Reporting Service, Fargo, North Dakota
May, 1960-1976.
       Wyoming Agricultural  Statistics, Wyoming Crop and  Livestock Reporting
Service, issued by Wyoming Department of Agriculture, the University of
Wyoming, and U.S.  Department  of Agricultural  Statistical  Reporting Service
Cheyenne, Wyoming, 1960-1976.                                              '

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                                 - 49 -


for the census years were calculated for wholesale, retail, and service

sectors. '   '     The wage and salary allocators for mining were used for

mining proprietorship allocators in each county.  The same relationship was

assumed to exist between wage and salary disbursements in mining and proprietor-

ship income from mining in all counties.  Straight-line interpolation again

provided allocations for noncensus years.

       Total county proprietor's income was computed for the agriculture-

crops, agriculture-livestock, wholesale, retail, and service sectors.  The

sum of county proprietor's income originating in these sectors was the

basis for formation of allocators for manufacturing, transportion, construc-

tion, communications and public utilities, and finance-insurance-real estate

sectors.  The county allocator for each of these five sectors was the ratio

of county proprietor's income in the five reported sectors to state total

proprietor's income originating in their sectors.  The assumption was that
                                                   •
income occurring to the unreported sectors would be proportional to the

level of activity in the reported sectors.  The government sector has no

proprietor's income.



                              Property  Income

       Property income includes income  received from dividends, rent, and

interest.  The Department of  Commerce does not categorize  property income

by industrial source, but only by rent,  interest,  and dividends.  Allocation

of property income was accomplished by  the use of  the same relationships

which were assumed for the disaggregation of proprietor's  income.
        g
        U.S.  Department  of  Commerce,  Censuslof  Business:   Wholesale Trade,
 op.  rrt.

        U.S.  Department  of  Commerce,  Census  of  Business:   Retail Trade,


        U.S.  Department  of  Commerce,  Census  of  Business:   Selected  Services,
 OR.  cvt.

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                                 - 50 -
                             Transfer Payments
       Transfer payments consist generally of disbursements from government
or business to individuals for which no services are rendered in that
specific time period.   The federal  government is the largest source of
transfer payments.  The largest individual source of transfer payments is
social security benefits.   Data on  social  security benefits were available
                                1 p
for the years 1967 through 1975.    The county proportion of the state total
was used as the allocator.  The 1967 allocator was assumed to hold for the
years 1958-1966.
               Individual  Contributions for Socia1 Insurance
       Contributions made  by individuals under the various social  insurance
programs are excluded from personal  income by treating them as an  explicit
deduction item.  The total state deduction for this category was subtracted
from each county's personal income  in the  same proportion that personal
income from the other five components was  received.
        U.S. Department of Commerce,  Federal  Outlays  in  Montana,  North
Dakota, and Wyoming. Office of Economic Opportunity,  National  Technical
Information Service, Washington,  D.C.,  1967-1975.

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                              - 51 -
                            LIST OF TABLES
Table No.                                                           Page

   1.    ECONOMIC SECTORS OF INPUT-OUTPUT MODEL AND SIC CODE
         NUMBERS OF EACH	     6

   2.    INTERDEPENDENCE COEFFICIENTS FOR BASIC ECONOMIC SECTORS,
         NORTH DAKOTA	     7

   3.    SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, NORTH DAKOTA,
         1958-1975 (MILLION DOLLARS) 	     8

   4.    PERSONAL INCOME, NORTH DAKOTA, 1958-1975  	    10

   5.    SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, NORTH DAKOTA
         REGIONS, 1958-1975 (MILLION DOLLARS)  	    13

   6.    ESTIMATES OF PERSONAL INCOME AND DIFFERENCES IN ESTIMATES,
         BY REGION, NORTH DAKOTA, 1958-1975  	    16

   7.    SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, MONTANA AND
         SOUTHEASTERN MONTANA, 1958-1975 (MILLION DOLLARS) ....    23

   8.    ESTIMATES OF PERSONAL INCOME AND DIFFERENCES IN ESTIMATES,
         MONTANA AND MONTANA REGION, 1958-1975 	    24

   9.    SALES FOR FINAL DEMAND, BY ECONOMIC SECTOR, WYOMING AND
         NORTHEASTERN WYOMING, 1958-1975 (MILLION DOLLARS) ....    29

  10.    ESTIMATES OF PERSONAL INCOME AND DIFFERENCES IN ESTIMATES,
         WYOMING AND WYOMING REGION, 1958-1975 	    30
                            LIST OF FIGURES
Figure No.                                                          Page

   1.    Personal Income in North Dakota, As Reported by the U.S.
         Department of Commerce and Estimated by Input-Output
         Procedures, 1958-1975 	    11

   2.    State Planning Regions in North Dakota  	    12

   3.    Personal Income in Region 1, North Dakota, as Reported by
         U.S. Department of Commerce and as Estimated by Input-
         Output Procedures and Disaggregation Techniques, 1958-
         1975	    17

   4.    Personal Income in Region 2, North Dakota, as Reported by
         U.S. Department of Commerce and as Estimated by Input-
         Output Procedures and Disaggregation Techniques, 1958-
         1975	    18

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                                -  52 -
                      LIST OF FIGURES (CONTINUED)
Figure No.                                                           Page

   5.     Personal  Income in Region 7, North Dakota,  as Reported
         by U.S.  Department of Commerce and as Estimated by Input-
         Output Procedures and Disaggregation Techniques, 1958-
         1975	   19

   6.     Personal  Income  in Region 8, North Dakota,  as Reported
         by U.S.  Department of Commerce and as Estimated by Input-
         Output Procedures and Disaggregation Techniques, 1958-
         1975	   20

   7.     Montana  and Nine-County Region in Southeastern Montana  .   22

   8.     Personal  Income in Montana,  as Reported by  the U.S.
         Department  of Commerce and Estimated by Input-Output
         Procedures, 1958-1975 	   25

   9.     Personal  Income in Southeast Montana as Reported by  U.S.
         Department  of Commerce and as Estimated by  Input-Output
         Procedures  and Disaggregation Techniques, 1958-1975  ...   26

  10.     Wyoming  and Eight-County Region in Northeastern Wyoming .   27

  11.     Personal  Income in Wyoming,  as Reported by  the U.S.
         Department  of Commerce and Estimated by Input-Output Pro-
         cedures,  1958-1975	   31

  12.     Personal  Income in Northeast Wyoming, as Reported by the
         U.S. Department of Commerce  and Estimated by Input-Output
         Procedures, 1958-1975 	   32

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                                  TECHNICAL REPORT DATA
                           (Please read Instructions on the reverse before completing)
I  H I- p o n i  NO.

  EPA-908/4-77-009
1. MILL AND SUBTITLE

  Developinq Economic  Impact  Projection
  Models for the Fort  Union Coal  Region
                                           3. RECIPIENT'S ACCESSION NO


                                           5. REPORT DATE

                                              June  1977
                                           6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
           Thor A. Hertsqaard
           Randal C. Coon
                     F. Larry Leistritz
                     Norman L. Dalsted
                                                          8. PERFORMING ORGANIZATION REPORT NO
No. 77030
9. PERFORMING ORGANIZATION NAME AND ADDRESS

  Department of Aqricultural  Economics
  North Dakota State  University
  Farqo, North Dakota    58102
                                                          10. PROGRAM ELEMENT NO.
                                           11. CONTRACT/GRANT NO.


                                              68-01-3507
12. SPONSORING AGENCY NAME AND ADDRESS

  U.S.  Environmental  Protection  Aqency
  1860 Lincoln Street
  Denver, Colorado    80295
                                           13. TYPE OF REPORT AND PERIOD COVERED

                                              Final	
                                           14. SPONSORING AGENCY CODE
                                                             EPA
15. SUPPLEMENTARY NOTES
16.ABSTRACT y^ reDOr't -js  ^e  initial  phase of a study to develop, adapt, and intearate
 models for evaluating the economic  effects of expanded coal mining and conversion in
 the Northern Great Plains (Fort  Union)  Reqion.   Work under Phase I was desiqned to
 determine the usefulness  for  describinq interindustry relationships in western North
 Dakota, southeastern Montana,  and northeastern  Wyoming of input-output coefficients
 previously developed for  North Dakota.   The 17  sector model (which includes coeffi-
 cients collected in Phase I for  the coal  mining, coal fired thermal electric generat-
 ing,  petroleum and natural gas extraction, and  petroleum refining sectors) provides
 personal  income estimates that coincide more closely with Department of Commerce
 estimates than do those obtained with the earlier 13 sector model.  It appears that
 the input-output model can be  used  for  estimating the potential effects of coal
 resource  development in North  Dakota.
      The  model does not perform  as  well  for northeastern Wyoming and southeastern
 Montana as in North Dakota.  The fact the input-output model  invariably underestimates
 personal  income in Montana and Wyoming  implies  that the model  leaves something to be
 described for describing  the level  of economic  activity in those states.  However, the
 model  does provide estimates that appear  to "track" quite consistently with Department
 of Commerce data, but with a predictable  downward bias.   The  rather constant downward
 bias  in the historical comparison may allow the model to be used for impact analysis of
   O.
develop
17.
                               KEY WORDS AND DOCUMENT ANALYSIS
                  DESCRIPTORS
 Economic  Models
 Economic  Sectors
 Population
 Employment
 Personal  Income
 Gross  Business  Volume
 Final  Demand  Vectors
        Interindustry  Rela-
          tionships
        Input-Output Coeffi-
          cients
        Coal Mining
           Coal Conversions
                                             b.IDENTIFIERS/OPEN ENDED TERMS
                                                           COSATI Held/Group
13. DISTRIBUTION STATEMENT

 Unlimited  Distribution
                               19. SECURITY CLASS (This Report)
                                  Unclassified
                52
                               20. SECURITY CLASS (This page)
                                                         22 PRICE
EPA Form 2220-1 (9-73)

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