[This discussion of RIMS II is based on documents prepared by the Connecticut Center for Economic Analysis, University of Connecticut, and the Bureau of Economic Analysis. See also the BEA's Overview of RIMS II]

RIMS was originally developed in the 1970s by the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce, based on the Department of Commerce's input-output table of the national economy. It breaks out almost 500 separate U.S. industries, including airports.

The Federal Aviation Administration has long used RIMS as its standard model of the economic impacts of airports.

RIMS measures the economic impact of an industry by accounting for three elements of potential economic impacts:

Direct impacts include employment, payroll, and revenue generated by services and good sold on the airport.

Indirect impacts are what users and employees of the airport spend off-airport (in the local and regional economy, e.g., in hotels and restaurants) as a result of their using or being employed at the airport.

Induced impacts include the value of goods and services purchased by money generated by direct and indirect impacts throughout the regional economy -- goods and services not associated with the airport and which would otherwise not be available.

RIMS II multipliers are given in three tables.

Total output. These multipliers are used to compute the total impact of a change in demand. They identify the demands placed on a particular region from the future growth of a business activity.

Earnings. These multipliers identify the demands placed on a particular region from the future growth of a business activity. They measure the impacts on earnings (income) and employment.

Employment. These multipliers are used in calculating the total number of jobs created by final changes in demand.

Each aviation business related to an airport is assigned a Standard Industrial Classification (SIC) code. The aviation-related business is identified by a corresponding RIMS II code, which identifies the multiplier factor to be applied to that business. Business activities that are most likely encountered in aviation-related economic studies are listed in the table at the end of this document.

RIMS II uses sales by aviation businesses to estimate the final demand at an airport. The magnitude of a business activity's economic consequences to the airport determine whether the activity is defined as having a direct or indirect impact. The business information gathered at an airport includes:

Magnitude of sales
Size of purchase
Identity of purchase
Number of employees
Size of payroll

Example 1. Earnings impact derived from sales data.

Business = fixed-based operator (from survey)
RIMS II code = 650500 (from table)
Sales = $100,000 (from survey)
RIMS II earnings multiplier for code 650500 = 0.6131

Earnings impact calculation:

$100,000 X 0.6131 = $61,310

Example 2. Earnings impact derived from payroll data.

Business = engine and propeller mfr. (from survey)
RIMS II code = 610700 (from table)
Sales (non provided in survey)
Payroll = $300,000 (from survey)
RIMS II earning multiplier (for code 610700) = 0.7120

Earnings impact calculation:

1. Direct coefficient household multiplier for RIMS code = 0.3676 (from RIMS tables)
2. Dividing RIMS II earning multiplier (0.7120) by direct coefficient household multiplier (0.3676) yields the economic base multiplier, 1.9369.
3. Multiplying payroll ($300,000) times the economic base multiplier (1.9369) yields earnings, $581, 070.

Example 3. Earnings impact derived from employment data.

Business - aerial sprayer (from survey)
RIMS II code = 010100 (from table)
Sales (none provided in survey)
Employees = 3 (estimated by airport manager)
RIMS II earnings multiplier (for code 010100) = 0.5662

Earnings impact calculation:

1. Obtain direct coefficient household multiplier for RIMS code = 0.2619 (from table)
2. Dividing RIMS II earnings multiplier (0.5662) by direct coefficient household multiplier (0.2619) yields the economic base multiplier, 2.1619.
3. Average earnings per job = $15,000 (from SIC number, RIMS II code, and county)
4. Multiplying estimated number of employees (3) times average earnings per job ($15,000) yields payroll, $45,000.
5. Multiplying payroll ($45,000) by economic base multiplier (2.1619) yields earnings, $97,286.