On the Use of Input-Output Models for Regional Planning. Martinus Nijhoff Social Sciences Division. The degree of interaction among various economic entities determines the total economic impact. Income impacts are changes in household income resulting from changes in total sales. Employment impacts are jobs added in the economy by firms with increased output or sales.
Total impacts equal the sum of direct, indirect, and induced effects.
The direct effect is always the largest component of the three effects. It is the initial change in the economy. The direct effect in this analysis is farm household spending of income associated with Staley's presence in the Lafayette area market. Indirect effects reflect inter-industry transactions resulting from change in economic activity. Induced effects are those associated with household expenditures of income paid by firms.