Direct Effect (I-O)

In an impact scenario in the Input-Output model, the effect of the user’s input change. This is the first round of changes. Using the analogy of tossing a rock into a pond as the initial, user-input change, the direct effect is the first ripple. The industry impacted by the user in the scenario will in turn impact other industries, demanding more goods or services from the industries in its supply chain. This is the direct effect.

See also Initial, Indirect, and Induced Effects.

Source: Emsi’s model, incorporating data from the Bureau of Economic Analysis (BEA).