The dominant characteristic of Itasca County and, indeed, most areas in
northeastern Minnesota is change. Population has declined over the past
decade in an apparent response to declining employment opportunities for
old and young alike. Employment also has shifted from such basic industries
as mining and agriculture to manufacturing and services.
County planners, including businessmen and public officials, need improved
tools for measuring the consequences of change in the economy and
society if they are to control and respond to these changes effectively. One
such tool is an input-output framework that describes the interdependence
of activities within the county and the rest of the world. A 39 by 39 sector
input-output model of the Itasca County economy of 1966 was constructed,
and multipliers useful for estimating shortrun impacts of possible changes
were developed from it.
In this analysis, forestry-related sectors such as timber production, sawmilling,
and timber operators were given special consideration, since such
established activities apparently have room to grow in Itasca County and
thereby may represent some opportunities for development. Of added interest
is the fact that forestry-related activities in the county have high local
community impact multipliers, largely because they result in high local
respending of income ratios.
Three basic classes of change are described and examples are developed
to illustrate the use of the Itasca County input-output results in measuring
the effects of change. The examples include a simple change in sales level
as illustrated by timber stumpage sales changes, a change in industry structure
with reference to the Itasca County resort sector, and the addition of
a new business or sector to the local economy illustrated by the construction
of a new chip-and-saw mill in the county. Several other kinds of examples
also are developed to help explain the uses and limitations of input-output
analysis. All of the cases are drawn in varying degrees from real-life concerns
in northeastern Minnesota.
Finally, by means of additional illustrations, guides for using the inputoutput
results are provided. The illustrations point out that high multipliers
are not in themselves clear signals for local development. Sales potential
also must be evaluated to make effective use of input-output analysis. By
illustrating the consequences of land use alternatives, two additional guides
are underscored: First, relative uncertainties about alternatives must be
considered, and second, income distribution effects as well as level of effect
must be taken into account.
Hughes, Jay M..
Forestry in Itasca County's Economy- An Input-Output Analysis.
Minnesota Agricultural Experiment Station.
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