IMPLAN's Weakest Link: Production Functions or Regional Purchase Coefficients?

Regional purchase coefficients (RPCs) are often seen as the weakest link in input-output modeling systems such as IMPLAN. In IMPLAN the RPCs are estimated either by the supply-demand pool (SDP) method, which ignores cross-hauling, or by econometric methods, based on 1977 data. Yet, how much difference do the RPCs make relative to the production functions, which reflect national and not local conditions? This study uses a case study of the swine industry in Martin County, Minnesota to explore this question. While this is a limited test, the results suggest that the production function changes are much more important than the changes due to regional purchase coefficients.