|
|
|
ASSUMPTION
TECHNIQUE
The Assumption
Technique is the simplest and most easily performed
economic base analysis technique. Recalling that our goal
is to allocate all local employment to basic or non-basic
sectors, the assumption technique literally
"assumes" that certain industries are
inherently basic sector jobs and others are non-basic
sector jobs.
When utilizing this
technique, it is common practice to assume that ALL
manufacturing, mining, agriculture, and federal and state
governments are basic sector activities because (it
is assumed) they rely largely upon non-local conditions.
In contrast, all other industries are assumed to be
non-basic, or entirely dependent upon local conditions.
From these very
rudimentary assumptions, estimates as to the Total Basic
and Total Non-Basic Employment for an area can be made.
Then, using the formula for the Base
Multiplier presented on the
Economic Base Page, a multiplier can be calculated for
your local area.
Example of Assumption Technique
The
"assumptions" of the Assumption
Technique
The
simplicity of this technique
The King
County Example
Targeting
your assumptions to your specific case
Possible
limitations of this technique (see the discussion
questions)
"Although
inadequate as a general basic sector estimation
procedure, the assumption technique is
appropriate for segments of the economy that
clearly serve local and non-local markets."
(Klosterman, p.128)
Often
planners must use very basic assumptions in their
analytical techniques. These assumptions must be
utilized very carefully and only after careful
consideration of the current case.
Again, one of
the core purposes of the Economic Base Technique
is to determine those economic sectors that are
export-based versus those based upon local
conditions. In this case we have used a set of
very basic assumptions to do this.
This general
technique can be and should be modified in cases
where other assumptions can be defended as
correct. For example, at finer levels of detail
within the SIC Code, certain services (like
hotels or perhaps employment in the production of
motion pictures) might be better identified as
Basic Sector employment. In short, the analyst
should willingly, but carefully deviate from the
basic assumptions of this technique when it is
clearly called for by local conditions.
What are the
key assumptions of this technique?
Why do we
assume certain industries are basic and others
are non-basic? What is the logic behind these
choices?
Do you see
any problems with using the Assumption Technique?
What limitations does this technique impose on
the results?
Klosterman, Richard
E. 1990. Community and Analysis Planning Techniques.
Rowmand and Littlefield Publishers, Inc. Savage,
Maryland. See Chapter 10.
Klosterman, Richard
E., Richard K. Brail, and Earl G. Bossard. 1993. Spreadsheet
Models for Urban and Regional Analysis. See Chapter
XX.
King County's Employment and Payroll Data (1994) by all SIC Codes
from the US Census Bureau.
|