This volume represents the efforts of many current and former staff members of the Industry Economics Division, working under the direction of Sumiye Okubo, Associate Director for Industry Accounts; Ann M. Lawson, Chief of the Division; Belinda L. Bonds, Chief of the Goods Branch; Karen J. Horowitz, Chief of the Services Branch; and Mark A. Planting, Chief of the Auxiliary Studies Branch. Brian D. Kajutti designed the data processing system and coordinated the computer programming and processing, and John Turner prepared the summary and detailed tables.
Ann Lawson directed the preparation of the volume and authored the summary and detailed series text. Karen Horowitz, with assistance from Belinda Bonds, Tara L. O'Brien, Alexandra E. Karaer, and Charlita R. Fickus, prepared "Appendix C: Measures of Output," "Appendix D: Products Included in Personal Consumption Expenditure Categories," and "Appendix E: Products Included in Producers' Durable Equipment Expenditure Categories."
Other staff contributors from the Industry Economics Division were William A. Allen, Timothy D. Aylor, Alvin D. Blake, Felicia V. Candela, Michael C. Craw, Sergio Delgado, Carole Henry, Thuy Hia, David Huether, Myles J. Levin, Sherlene K. S. Lum, Fritz Mayhew, William McCarthy, Donna McComber, Cheryl Miner, Edward T. Morgan, Brian C. Moyer, Diane E. Nisson, Robert S. Robinowitz, Darlene C. Robinson, Mary L. Roy, Timothy F. Slaper, John Sporing, Robert A. Sylvester, Diane Young, and Robert E. Yuskavage.
Members of the staff of the National Income and Wealth Division under the direction of Leon W Taub, former Chief, and the staff of the Government Division under the direction of Karl D. Galbraith, Chief, contributed to the development of the estimates; major contributors were Brooks B. Robinson, Jeffrey W. Crawford, Pamela A. Kelly, Greg M. Key, Clinton P. McCully, Carol E. Moylan, and David F. Sullivan.
Members of the staff of the International Investment Division under the direction of David R. Belli, Chief, and members of the staff of the Balance of Payments Division under the direction of Christopher L. Bach, Chief, assisted in the preparation of the foreign trade estimates.
Estimates for transportation were prepared with the assistance of Bingsong Fang, Xiaoli Han, and Simon Randrianarivel from the Bureau of Transportation Statistics, U.S. Department of Transportation. Estimates for agriculture were prepared with the assistance of Gerald Schluter and William E. Edmondson from the Economic Research Service, U.S. Department of Agriculture.
Eric B. Manning, under the direction of Douglas R. Fox, Chief of the Current Business Analysis Division, coordinated the production of the publication and provided typesetting. W. Ronnie Foster designed the cover graphic.
A special acknowledgment is made to the staff of the Bureau of the Census, particularly to those in the Agriculture and Financial Statistics Division under the direction of Ewen M. Wilson, Chief; in the Manufacturing and Construction Division under the direction of David Cartwright, former Chief; and in the Services Division under the direction of Carol Ambler, Chief. Without their cooperation and assistance, the publication of the 1992 benchmark input-output accounts on a more timely basis would have been impossible.
This publication presents the 1992 benchmark input-output (I-O) accounts for the U.S. economy. It provides the estimates for both the summary (that is, at the I-O two-digit level) and the detailed (I-O six-digit level) industries and commodities in one publication. It also provides information on the uses of I-O accounts and on the methods underlying them.
The text consists of two parts and six appendixes. The first part of the text combines the text of the article "Benchmark Input-Output Accounts for the U.S. Economy, 1992: Make, Use, and Supplementary Tables," which appeared in the November 1997 issue of the SURVEY OF CURRENT BUSINESS, with that of the article "Benchmark Input-Output Accounts for the U.S. Economy, 1992: Requirements Tables," which appeared in the December 1997 SURVEY. This part describes the preparation of the 1992 I-O accounts and some of the improvements made to the tables, the concepts and methods underlying the U.S. I-O accounts, and how the I-O accounts are used. It also includes supplementary tables that relate the I-O accounts to the national income and product accounts (NIPA's); these tables permit more extensive analysis with the I-O estimates. The second part of the text describes how to read the detailed tables, which appear in the general format that was used for the publication Benchmark Input-Output Accounts of the United States, 1987.
The text also presents the two appendixes that previously appeared in the November 1997 SURVEY. Appendix A provides a concordance between the codes used in the I-O accounts and the 1987 Standard Industrial Classification (SIC) system, and appendix B provides a list of the value-added and final-use components that are included in the I-O accounts. This volume includes four additional appendixes: Appendix C, which describes the measures of output; appendixes D and E, which list the products included in the NIPA personal consumption expenditure (PCE) and producers' durable equipment (PDE) expenditure categories, respectively; and appendix F, which provides the mathematical derivation of the I-O total requirements tables.
The tables presenting the 1992 I-O benchmark estimates are divided into two complementary parts. The first part presents the summary estimates as they were presented in the November and December issues of the SURVEY. The second part presents the corresponding detailed estimates. It provides the I-O estimates for the make and use tables and the estimates of the total output requirements from industries and commodities to meet demand, as well as the 15 largest industries or commodities and their contributions to meeting that demand for a commodity. It also contains detailed estimates for I-O commodity composition of the NIPA PCE and PDE categories.
All estimates developed for the 1992 benchmark I-O study are available on diskette (see the box "Data Availability" on page M–3). For other assistance, contact the Industry Economics Division at (202) 606–5584, or write to the Industry Economics Division, BE–51, Bureau of Economic Analysis, U.S. Department of Commerce, Washington D.C. 20230.
The I-O accounts show the production of commodities (goods and services) by each industry, the use of commodities by each industry, the commodity composition of gross domestic product (GDP), and the industry distribution of value added. These I-O accounts are used in a variety of analytical and statistical contexts, including in studies of interindustry relationships within the economy and as the framework and benchmarks for other statistical accounts.
This publication presents the 1992 benchmark I-O accounts for the U.S. economy./1/ This part of the publication is in two sections. The first section describes the preparation of the 1992 I-O accounts and discusses some of the improvements that have been made. The second section describes the I-O tables, illustrates how they are used, and discusses the concepts and methods underlying the I-O accounts.
The 1992 I-O estimates are presented in this part in summary form; that is, they are aggregated to 97 I-O industries from 498-industry detail. The make (production) of commodities by industries is shown in table 1; the use (consumption) of commodities by industries, in table 2.1; and the components of value added by industries, in table 2.2. The commodity-by-industry direct requirements for a dollar of industry output are shown in table 3.1, and the component detail for the value-added input coefficients in table 3.2. The commodity-by-commodity total requirements, direct and indirect, for a dollar of delivery to final use are shown in table 4. The industry-by-commodity total requirements, direct and indirect, for a dollar of delivery to final use are shown in table 5. These tables are available at the summary and detailed levels on diskette (see the box "Data Availability" on page M–3).
This part also presents supplementary tables that link the I-O accounts to the national income and product accounts (NIPA's)./2/ These tables permit more extensive analyses with the I-O estimates.
In response to user needs—as expressed, for example, by the Interagency Working Group on the Quality of Economic Statistics—the Bureau of Economics Analysis (BEA) implemented a program to speed up the availability of benchmark I-O accounts./3/ This goal was later formalized in BEA's Strategic Plan, which was developed with data users and data suppliers in 1995. The Strategic Plan included making the benchmark I-O accounts available to users within five years of the date of an economic census or within one year after the release of all the data from that census, as part of the goal to develop new and improved measures of output and prices./4/ The 1992 benchmark I-O accounts have met this goal./5/
The benchmark I-O accounts are based primarily on data collected from the economic censuses conducted every five years by the Bureau of the Census. The economic censuses provide comprehensive data—including information on industry and commodity production, materials consumed, and operating expenses—that are not available on a more frequent basis. The 1992 benchmark I-O accounts used data from economic censuses of the following industries: Mining; manufacturing; wholesale trade; retail trade; transportation, communications, and utilities; finance, insurance, and real estate; and services. In addition, the I-O accounts used data from the 1992 Census of Agriculture, the 1992 Census of Construction Industries, and the 1992 Census of Governments.
In preparing the 1992 benchmark I-O accounts, BEA first estimated industry and commodity outputs for the I-O make and use tables. The industry and commodity outputs are represented by the shaded cells in the I-O make table, shown in the upper panel of chart 1, and in the I-O use table, shown in the lower panel. Where there are gaps in coverage by the economic censuses, BEA used data from other sources, such as the U.S. Department of Agriculture, U.S. Department of Energy, U.S. Department of Transportation, U.S. Department of Treasury, Office of Management and Budget, other Government agencies, and private organizations.
Second, BEA prepared estimates of the commodity inputs required by an industry to produce its output. In the use table shown in chart 1, commodity inputs are represented by the upper cells in an industry column. Most of the detailed data available to estimate commodity inputs are obtained from the economic censuses, which included selected purchased services for most industries and materials consumed for manufacturing. When only aggregate data were available, BEA combined that information (for example, purchases of fuel by manufacturing industries) with information on purchases of individual commodities (for example, purchases of petroleum products, natural gas, and coal in the category of purchased fuels) to estimate purchases of specific commodities by an industry (for example, purchases of natural gas by a manufacturing industry).
Third, BEA prepared estimates of value added by all industries. In the I-O accounts, value added consists of three components—compensation of employees, indirect business tax and nontax liability, and "other value added"—which are represented by the lower cells in an industry column of the use table. To estimate compensation of employees and indirect business tax and nontax liability, BEA used data from the NIPA's and from the Bureau of Labor Statistics, Bureau of the Census, Office of Management and Budget, and the U.S. Department of Treasury. BEA then derived other value added as a residual by subtracting total intermediate inputs, compensation of employees, and indirect business tax and nontax liability from total industry output.
Finally, BEA completed the estimates of detailed final-use categories. Most of the estimates of personal consumption expenditures and gross private fixed investment were prepared using the commodity-flow method./6/ For example, using the commodity-flow method, office equipment for private investment was estimated as a residual after government investment was subtracted from the total supply of office equipment. The estimates of inventories held by industries were based primarily on economic census data; these estimates were then distributed to commodities based on information from the 1987 benchmark I-O accounts. The estimates of exports and imports of commodities were based on data from the Bureau of the Census and BEA's U.S. balance of payments accounts. For the estimates of Federal Government and State and local government, total consumption and investment expenditures by type of purchase were obtained from the NIPA's; these estimates were then distributed to I-O commodities based on information from the 1987 benchmark I-O accounts and the 1992 economic censuses.
The 1992 I-O accounts incorporated three types of changes: Definitional and classificational, to more accurately reflect the evolving U.S. economy; methodological, to increase the accuracy and reliability of the estimates; and statistical, to introduce newly available and revised source data.
Major definitional and classificational changes.—The 1992 I-O accounts incorporated the definitional changes that were introduced as part of the comprehensive NIPA revision released in January 1996./7/ Of this type, the change that most affected the I-O accounts was the new treatment of government purchases that distinguishes between government investment and consumption expenditures and that is symmetrical with the treatment of private fixed assets./8/
Additional definitional and classificational changes that were incorporated into the 1992 I-O accounts included the following:
For the 1992 I-O accounts, BEA has also prepared a set of alternative benchmark make and use tables that are more closely based on the Standard Industrial Classification (SIC) system. For more information, see the box "Alternative I-O Tables" below.
Major methodological changes.—The 1992 I-O accounts also incorporated the results of the major methodological changes that were introduced as part of the comprehensive NIPA revision. For example, the improved estimates of purchases of new autos and of investment in nonresidential structures were incorporated into the estimates of final uses, and the new estimates of voluntary contributions to thrift savings plans were incorporated into the estimates of compensation of employees.
For estimates of indirect business tax and nontax liability, the 1992 I-O accounts incorporated the improved industry assignment of commodity taxes that was introduced in the comprehensive revision of gross product originating (GPO) released in August 1996./9/ Of the new assignments, the one with the largest impact is the shift of the Federal excise tax on gasoline and gasohol from petroleum refining in manufacturing to wholesale trade. These taxes are now classified in a more consistent and comprehensive manner than in the previous benchmark accounts.
In addition, the 1992 I-O accounts incorporated improved measures of output and inputs for the transportation industries and improved measures of the freight charges incurred to transport commodities by different modes. These improvements resulted from a review of the methods and source data used to prepare transportation estimates for the I-O accounts by the staff of the Department of Transportation./10/ Where feasible, BEA incorporated suggested improvements from this review into the 1992 I-O accounts.
Major statistical changes.—The 1992 I-O accounts incorporated newly expanded data from the 1992 economic censuses, which covered about 95 new industries and marked the most significant expansion in scope of the census in the past 50 years. These data were collected primarily in the two new economic censuses—Financial, Insurance, and Real Estate and Transportation, Communications, and Utilities. The I-O accounts also incorporated newly expanded data for the expenses of auxiliary establishments and for the expenses of manufacturing, wholesale trade, retail trade, and service industries. These data, together with data from new annual surveys for transportation and for communications, were used to estimate inputs for these industries.
The I-O accounts for the U.S. economy show the production of commodities by each of 498 industries in the make table and the consumption of commodities by these industries in the use table. The use table also shows the commodity composition of gross domestic product (GDP) and the industry distribution of value added.
The I-O accounts show the relationships between all the industries in the economy and all the commodities that these industries produce and use. The estimates of the commodities are shown in producers' prices./11/ When producers' prices are used, transportation costs and wholesale and retail trade margins are treated separately as commodities that are produced and used by industries (see the section "Definitions and conventions for valuation of transactions," beginning on page M–15).
The I-O accounts consist of five basic tables: (1) Make, (2) use, (3) commodity-by-industry direct requirements, (4) commodity-by-commodity total requirements, and (5) industry-by-commodity total requirements./12/
The make table.—The make table (shown as a schematic in the upper panel of chart 1 and with estimates in table 1) shows the value in producers' prices of each commodity produced by each industry. In each row, one "diagonal" cell shows the value of the production of the commodity for which the industry has been designated the "primary" producer; in chart 1, these cells are shaded in the interior of the make table. The entries in the other cells in the row show the values of the production of commodities for which the industry is a "secondary" producer./13/ For example, the industry "newspapers and periodicals" (row 26A in table 1) is the primary producer of the commodity "newspapers and periodicals" (column 26A in table 1). This industry is also a secondary producer of the following commodities: Other printing and publishing (column 26B); scientific and controlling instruments (column 62); advertising (column 73D); and scrap, used and secondhand goods (column 81). The sum of all the entries in the row is the total output of that industry.
The entries in each column of the make table represent the production by both primary and secondary producers of the commodity in the column. For example, computer and data processing services (column 73A) includes the outputs by the primary producer—the industry "computer and data processing services" (row 73A)—and by the following secondary producers: Computer and office equipment (row 51); legal, engineering, accounting, and related services (row 73B); and other business and professional services, except medical (row 73C). The sum of all the entries in the column is the total output of that commodity.
An industry's share of the production of a commodity can be determined from the values in the make table by calculating the entry in a given column as a percentage of the column total. For example, the production of the commodity "scientific and controlling instruments" (column 62) totaled $107.9 billion, of which the industry "scientific and controlling instruments" (row 62) produced $100.5 billion or about 93 percent of the total commodity output.
The estimates of industry and commodity output are based primarily on data from the quinquennial economic censuses conducted by the Bureau of the Census. (Table A shows the principal data sources used to estimate industry and commodity outputs for the 1992 I-O accounts.) Economic census data are used for most industries, but data from other Government agencies and private sources are used for the I-O industries that are not covered by the economic census data, such as education and religious organizations. In addition, data from other Government agencies are used to supplement the economic census data for some industries; for example, data on financial statistics for major private electric utilities from the U.S. Department of Energy are used to supplement the data on electric utilities from the 1992 Census of Transportation, Communications, and Utilities.
BEA makes two adjustments to the economic census data. First, it adds estimates of the output for establishments that are not covered by the economic censuses. This adjustment includes estimates for nonpayroll firms in mining, manufacturing, and wholesale trade and for noncensus-covered industries in agriculture, forestry, and fisheries, in services (such as education and religious organizations), and in transportation (such as railroads). Second, BEA adjusts the data for misreported tax return information, because the Census Bureau data for receipts reflect tax return records in some cases rather than information collected from surveys. Therefore, the tax return data must be adjusted to account for nonfilers and for filers who misreport receipts to the Internal Revenue Service./14/ The largest adjustments are to the data for the services industries in which partnerships and sole proprietorships are more prevalent.
After these adjustments are made, BEA redefines the SIC-based economic census data using the I-O classification system in order to attain greater similarity in the input structures for commodities produced by an I-O industry. For example, restaurants in hotels are redefined to the "eating and drinking places" industry. (See the section "Definitions and conventions for classification.")
The use table.—The data in the use table (shown as a schematic in the lower panel of chart 1) are presented in two parts: Table 2.1 shows the value in producers' prices of each commodity used by each industry or by each final user (represented by the upper left and right quadrants of the use table in chart 1); table 2.2 shows detail on the components of value added and total intermediate inputs that are used by each industry to produce its output (represented by the lower left quadrant of chart 1). In table 2.1, the entry in each row shows the commodity that is used by the industry or final user in the column. For example, the commodity "radio and TV broadcasting services" (row 67) is used by the industries "communications, except radio and TV" (column 66), "radio and TV broadcasting" (column 67), and "advertising" (column 73D) and by persons in "personal consumption expenditures" (column 91).
To facilitate the presentation, the rows and columns of table 2.2 are reversed from those shown in chart 1 as follows: The industries are shown in the rows, and the total intermediate inputs, the components of value added, and the total output for each industry are shown in the columns. For example, for the industry "radio and TV broadcasting" (row 67), compensation of employees was $8.4 billion, indirect business tax and nontax liability was $0.5 billion, and "other value added" was $2.9 billion. Total intermediate inputs was $17.6 billion, which is the sum of the intermediate inputs for the industry shown in table 2.1. The total output for this industry was $29.4 billion.
The column total for industries in table 2.1 equals the industry output in table 2.2. For example, the industry output for the "radio and TV broadcasting" industry (column 67) in table 2.1 equals the total industry output for that industry (row 67) in table 2.2, or $29.4 billion.
In table 2.1, the sum of the intermediate uses of the commodity by industries (upper left quadrant of chart 1) and all sales to final users (upper right quadrant of chart 1) equals total commodity output. The sum of the intermediate inputs consumed by each industry—that is, the raw materials, semifinished products, and services that the industry purchased—and the value added by the industry equals total industry output. In the I-O accounts, GDP can be measured either as the sum of final uses of commodities or as the sum of value added by industries.
The use table shows the variation in the share of commodity output that is sold to final users. In table 2.1, some commodities, such as "apparel" (row 18), were sold almost entirely to final users; therefore, the demand for these commodities is affected primarily by changes in the buying patterns of the final users. Other commodities, such as "industrial and other chemicals" (row 27A), were used almost entirely as intermediate inputs; for these commodities, production is indirectly connected to final uses.
The use table also shows the variation in the usage of commodities by industries. For example, in table 2.1, the commodity "paper and allied products, except containers" (row 24), with a total commodity output of $98.5 billion, was used by most industries. The largest user was "other printing and publishing" (column 26B), which used $16.1 billion, or 16 percent of the total commodity output. In contrast, "metal containers" (row 39), with $13.2 billion of commodity output, were used by only 17 industries. The largest user was the industry "food and kindred products" (column 14), which used $9.4 billion, or 71 percent of the total commodity output.
Finally, the use table shows the variation in the use of total value-added inputs by industries to produce their outputs. For example, in table 2.2, the industry "real estate and royalties" (row 71B) required $412.2 billion of value-added inputs, or 75 percent of its total output; of this total, $48.4 billion was for compensation of employees, $79.7 billion was for indirect business tax and nontax liability, and $284.2 billion was for "other value added." In contrast, the industry "livestock and livestock products" (row 1) required $15.6 billion of total value-added inputs, or 17 percent of its total output; of this total, $4.5 billion was for compensation of employees, $1.3 billion was for indirect business tax and nontax liability, and $9.8 billion was for "other value added."
The estimates of intermediate inputs in the use table are primarily based on data from the economic censuses. Much of these data are for broad expense categories, such as office supplies, that must be allocated to I-O commodities, such as postal services, paper, and envelopes. In cases in which estimates of expenses are not available, BEA uses commodity shipments and other related information. For example, the estimates of the purchases of spark plugs are allocated using the stock of cars, trucks, and buses by industry. (Table B shows the principal sources and methods used to estimate intermediate and value-added inputs for 1992 I-O industries.)
The estimates of final uses of commodities are prepared from source data on purchases or by using the commodity-flow method. For example, the estimates of exports and imports are based on source data from the Census Bureau and BEA's U.S. balance of payments accounts. In the commodity-flow method, which is used mainly for personal consumption expenditures and producers' durable equipment, domestic output is adjusted for exports and imports; trade margins and transportation costs are added to estimate supply in purchasers' value. Then, either a percentage of this supply is attributed to final users, or the supply is adjusted for intermediate purchases and the residual attributed to final users./15/
Two of the components of value added by industry are estimated directly using a variety of data sources (table B). Most of the estimates of compensation of employees by industry are based on census data. The estimates of indirect business tax and nontax liability by industry are prepared in two parts: For excise and general sales taxes, the values are estimated as part of each industry's output; for other indirect business taxes, such as property taxes, estimates are distributed on the basis of a variety of source data, including State government tax collections and highway statistics. The remaining component is shown as "other value added," which is derived as a residual by subtracting the total intermediate inputs, compensation of employees, and indirect business tax and nontax liability from total industry output.
The commodity-by-industry direct requirements table.—The commodity-by-industry direct requirements for a dollar of industry output are presented in two parts: Table 3.1 shows the input coefficients for each commodity that an industry requires to produce a dollar of output; table 3.2 shows component detail for the value-added input coefficients that an industry requires to produce a dollar of output. The input coefficients in both tables are also referred to as "direct requirements coefficients." The sum of the coefficients for total intermediate inputs and for the total value added for each industry is equal to 1.00000.
Tables 3.1 and 3.2 are derived from tables 2.1 and 2.2, respectively, by dividing each industry's commodity or value-added input by that industry's total output. However, table 3.1, unlike table 2.1, does not include the components of final uses or gross domestic product.
In table 3.1, each column shows, for the industry named at the head of the column, the input coefficients for the commodities and for the total value added that an industry directly requires to produce a dollar of output. Each row shows the commodity or the total value added that the industry requires. For example, to produce a dollar of output, the industry "radio and TV broadcasting" (column 67) has direct requirements for 2.1 cents (calculated as 100 cents × 0.02064 from the table) of the commodity "radio and TV broadcasting" (row 67) and 2.8 cents of the commodity "advertising" (row 73D).
In table 3.2, industries are shown in the rows, and the total output, the total intermediate inputs, and the components of value added that are required to produce a dollar of output are shown in the columns. For example, to produce a dollar of output, the industry "radio and TV broadcasting" (row 67) has direct requirements for 40.2 cents of total value added; these requirements consist of 28.6 cents of compensation of employees, 1.8 cents of indirect business tax and nontax liability, and 9.8 cents of "other value added." The industry has direct requirements of 59.8 cents of intermediate inputs, which are shown in detail in column 67 of table 3.1.
The information in table 3.1 can be used with the information in the make table (table 1) to trace the changes in an industry's output, as well as the changes in that industry's total requirements for other industries' outputs that result from a change in final uses of a commodity. For example, tables 1 and 3.1 can be used to trace the direct effects of a $1 billion increase in sales of household appliances to final users on all industries producing household appliances.
In table 1, total output of the commodity "household appliances" (column 54) was $16,833 million. The industry "household appliances" (row 54) produced $16,033 million, or 95.2 percent, of this commodity; the industry "audio, video, and communication equipment" (row 56) produced $268 million, or 1.6 percent, and 18 other industries produced the rest. Based on these proportions, production in the household appliances industry would initially increase $952 million ($1 billion × 0.952) to meet the $1 billion increase in household appliances sold to final users. Production in the audio, video, and communication equipment industry would increase $16 million ($1 billion × 0.016), and production in the 18 other industries would increase $32 million.
table 3.1 can then be used to determine the commodity inputs required by each industry to produce its share of the $1 billion of household appliances sold to final users. The commodities required by the household appliances industry will be traced first. For example, column 54 in table 3.1 shows that the household appliances industry would require, in addition to other commodity inputs, $1.2 million ($952.0 million × 0.00126) of the commodity "household appliances" (row 54); to provide this commodity input, the industry's production would have to increase an additional $1.1 million ($1.2 million × 0.952). Thus, the increase in the production of the household appliances industry would be $953.1 ($952.0 million for final users plus $1.1 million for its own intermediate use). In turn, this production would require $65.1 million ($953.1 million × 0.06835) of primary iron and steel manufacturing (row 37), $83.0 million ($953.1 million × 0.08710) of rubber and miscellaneous plastics products (row 32), and so on down the column. From table 3.2, the value added required by the household appliances industry would total $335.9 million ($953.1 million × 0.35243). Of this total, $200.9 million ($953.1 million × 0.21075) is for compensation of employees, $7.4 million ($953.1 million × 0.00781) is for indirect business tax and nontax liability, and $127.6 million ($953.1 million × 0.13387) is for "other value added."
The information in tables 1 and 3.1 can now be used to trace the continuing repercussions of the $953.1 million of additional output produced by the household appliances industry on the output of other industries. For example, to supply the primary iron and steel required by the household appliances industry, the industry "primary iron and steel manufacturing" (column 37 in table 3.1) requires $12.0 million ($65.1 million × 0.18508) of the commodity "primary iron and steel manufacturing" (row 37 in table 3.1)—of which it produces $11.8 million ($12.0 million × 0.987 derived from table 1) and all other industries produce $0.2 million ($12.0 million × 0.013). Other commodities required by the primary iron and steel manufacturing industry include $1.3 million ($76.9 million × 0.01663) of general industrial machinery and equipment (row 49), $1.4 million ($76.9 million × 0.01762) of coal mining (row 7), and so on. Similarly, all the other industries that produce primary iron and steel manufacturing (column 37 in table 1) as secondary products—such as primary nonferrous metals manufacturing (row 38 in table 1)—would also require commodities to produce their shares of the output of primary iron and steel manufacturing that is required by the household appliances industry.
Similarly, the continuing effects on each industry producing its share of the $1 billion of household appliances sold to final users can be traced, and the increase in production required from each industry can be derived. For each industry that produces household appliances, either as a primary product or as a secondary product, the direct requirements coefficients corresponding to that industry are used from table 3.1. For example, for household appliances as a primary product of the household appliances industry, the direct requirements coefficients from column 54 in table 3.1 are used; for household appliances as a secondary product of the audio, video, and communication equipment industry, the coefficients from column 56 are used.
The commodity-by-commodity total requirements table.—The commodity-by-commodity total requirements table (table 4) shows the inputs of each commodity that are directly and indirectly required to deliver a dollar of the commodity to final users. It combines the information in tables 1 and 3.1 to completely trace and summarize as a multiplier the continuing repercussions of a dollar change in the final use of a specified commodity on total commodity outputs. Each column shows the commodity delivered to final users, and each row shows the total production of the commodity that is required. The coefficients in this table are referred to as "commodity-by-commodity total requirements coefficients." The table is derived from both the make and use tables./16/
In the household appliances example, the total requirements for each commodity can be calculated from the entries in column 54. Providing consumers with $1 billion of household appliances would require $1,001.3 million ($1 billion × 1.00133) of household appliances (row 54) from all industries. Similarly, it would require $15.3 million ($1 billion × 0.01530) of paperboard containers and boxes (row 25), $51.5 million ($1 billion × 0.05153) of plastics and synthetic materials (row 28), and so on.
The total at the bottom of each column in table 4 is the sum of all the changes in commodity outputs that are required to deliver a dollar of a commodity to final users. Because each total change is a dollar multiple of the initial dollar spent for the output of the given commodity, the total change in output is often called the total commodity output multiplier.
These multipliers can be used to estimate the impact of changes in the final uses of commodities on total commodity output. For example, for the household appliances commodity (column 54), the total commodity output multiplier is 2.33419 (the sum of all the entries in the column). The total dollar change in all commodity output that is required for an additional $1 billion of household appliances delivered to final users is $2,334.2 million ($1 billion × 2.33419).
The industry-by-commodity total requirements table.—The industry-by-commodity total requirements table (table 5) shows the input requirements coefficients for the output from each industry that is directly and indirectly required to deliver a dollar of a commodity to final users. Each column shows the commodity delivered to final users, and each row shows the total production that is required from an industry. The coefficients in this table are referred to as "industry-by-commodity total requirements coefficients." The table is derived from both the make and use tables.
The calculations made using this table are similar to those using the commodity-by-commodity total requirements table. For example, to provide final users with an additional $1 billion of household appliances, the household appliances industry (row 54) is required to produce $954.3 million ($1 billion × 0.95433) of industry output; the paperboard containers and boxes industry (row 25) is required to produce $15.5 million ($1 billion × 0.01545) of industry output, the plastics and synthetic materials industry (row 28) is required to produce $45.1 million ($1 billion × 0.04510) of industry output, and so on.
The total at the bottom of each column in table 5 is the sum of all the changes in industry outputs that are required to deliver a dollar of a commodity to final users. Because each total change is a dollar multiple of the initial dollar spent for the output of the given industry, the total change in output is often called the total industry output multiplier.
These multipliers can be used to estimate the impact of changes in the final uses of commodities on total industry output. For example, the total industry output multiplier for the household appliances commodity (column 54) is 2.31873 (the sum of all the entries in the column). The total dollar change in the output of all industries that is required for an additional $1 billion of household appliances delivered to final uses is $2,318.7 million ($1 billion × 2.31873).
Comparison of total multipliers.—The total multipliers in tables 4 and 5 are similar but not identical. The main reason for the difference is that the commodity multipliers in table 4 includes "noncomparable imports," which by definition do not have a domestic industry counterpart and are not included in the total industry output multipliers in table 5.
When using the two total requirements tables, one should be aware that the amount of output required to deliver a dollar of commodity to final users may include both imported commodities and domestically produced commodities. However, both the total commodity output multiplier and the total industry output multiplier represent the output required as if all of the commodity were domestically supplied. Therefore, if a portion of the commodity was imported, the impact on domestic output would be lower than that implied by the multiplier.
The I-O accounts have a variety of uses that range from an analytical tool to study industry production to a framework for benchmarking other economic statistics programs. This section describes the uses of the I-O accounts in studying interindustry relationships in the U.S. economy and in preparing economic statistics. It also describes some of the assumptions that analysts must make when they use I-O accounts as an economic tool for analysis.
Analytical uses.—The I-O accounts are an important analytical tool because they show the interdependence among the producers and consumers in the economy. Using the I-O accounts, analysts can estimate the direct and indirect effects of changes in final uses on industries and commodities.
For example, the I-O accounts can show how an increase in consumer demand for motor vehicles will affect the rest of the economy. It will likely cause an increase in the production of motor vehicles, which could result in increased steel production and which, in turn, could require increases in the production of chemicals, iron ore, limestone, and coal. It could also require an increase in the production of upholstery fabrics, which could require more natural fibers, more synthetic fibers, and more plastics and which, in turn, could require increases in the production of "electric services (utilities)" and "plastics materials and resins." In the I-O accounts, these effects are quantified in the total requirements tables./17/
Similarly, the requirements tables can be used to estimate the effects of a strike or natural disaster on the economy or, supplemented with additional information, to estimate the effects of an increase in demand for U.S. exports on employment. The Federal Emergency Management Agency, the Department of Defense, and the Census Bureau, among others, have used the I-O accounts for such studies.
When the I-O accounts are augmented with regional data from BEA, they can show economic effects by region. For example, the regional I-O accounts can be used to estimate the potential impact of a planned Federal Government shutdown of a military base./18/ When the I-O accounts are augmented with international data, they can be used to estimate the effects of exchange-rate changes on the profitability and activities of manufacturing industries that rely on imported inputs./19/
Analysts using the I-O tables to estimate the effects of changes in final uses on industries and commodities need to be aware of the underlying I-O assumptions. For example, the I-O tables are based on a set of relationships that exist between producers and consumers in a given year; these relationships reflect constant technology and relative prices. The interindustry relationships reflect the average input structure in each industry for that year, but these relationships do not necessarily reflect those of an additional unit of production. Therefore, for analyses that require alternative assumptions, other economic tools may be required.
Statistical uses.—The I-O accounts are used in several ways to prepare economic statistics. For example, the final-use components of personal consumption expenditures and of gross private domestic investment—adjusted to reflect the definitional, classificational, and statistical changes made after the completion of the benchmark I-O accounts—provide the benchmarks for the NIPA's.
The benchmark I-O accounts are also used as a framework to weight and to calculate index numbers for price, volume, and value. For example, the Bureau of Labor Statistics uses data from the I-O accounts as weights in compiling industry price indexes.
The I-O accounts use two classification systems—one for industries and another for commodities—and both systems generally use the same I-O numbers and titles. This section discusses first the I-O industry classification system and then the I-O commodity classification system.
The I-O industry classification system.—This system is based on the Standard Industrial Classification (SIC) system, which classifies establishments into industries on the basis of the primary activities of the establishments. Establishments are defined as economic units that are typically at a single location where business is conducted or where services or industrial operations are performed./20/
The I-O industry classification system differs from the SIC system in three major ways. First, the I-O industry system redefines some secondary production of some SIC industries to other industries. Second, the I-O industry classification system includes "special industries" that are not considered to be industries in the SIC system. Third, because of data limitations, the I-O industry system includes three industries—agriculture, construction, and real estate—that are defined on an activity basis rather than an establishment basis.
Redefinitions result in the shift of output and inputs related to the secondary activities of some establishments to the SIC industries in which they are primary activities. (A primary activity must make up the largest proportion of the establishment's output; all the other activities are secondary.) The I-O industry classification system only redefines the secondary activities of an SIC industry for which the related inputs are very different from those required for the industry's primary activity. For example, both the output and related inputs of restaurants in hotels are moved from the SIC industry "hotels and lodging places" (in which "hotels and lodging" is the primary activity) to the industry "eating and drinking places" (in which "eating and drinking" is the primary activity), because the input structure of "meals and beverages" is very different from that of the industry's primary activity. After the redefinition is completed, the total outputs for both I-O industries—that is, "eating and drinking places" and "hotels and lodging places"—are different from their SIC industry counterparts. However, total outputs for the I-O commodities remain unchanged from their counterparts in the SIC system. The purpose of redefinitions in the I-O analytical framework is to attain a greater degree of homogeneity in the inputs required by an I-O industry to produce its commodities.
The following activities are redefined:
Redefinitions affected most industries, but the total output that was redefined for most industries was small for the 1992 I-O accounts. Redefinitions had a significant effect on the following industries: Automotive repair and services (I-O industry 75) has $138.4 billion in total industry output after $1.0 billion was removed and $48.1 billion was added from wholesale and retail trade; eating and drinking places (I-O industry 74) has $280.7 billion in total output after $1.0 billion was removed and $45.6 billion was added; wholesale trade (I-O industry 69A) has $569.0 billion in total output after $51.0 billion was removed and $31.0 billion was added; and retail trade (I-O 69B) has $522.5 billion in total output after $82.7 billion was removed and $13.9 billion was added.
Special industries are included in the I-O system, but they are not considered industries in the SIC system. In the SIC, government establishments engaged in business-like activities (classified in SIC industry divisions 1–8), such as the U.S. Postal Service and the local water authorities, are classified in the same SIC industry as private establishments. In the I-O system, these establishments are classified in Federal Government enterprises (I-O 78) and State and local government enterprises (I-O 79)./21/
Another special industry created for the I-O accounts, general government (I-O 82), covers all other government establishments and is similar in scope to SIC industry division 9, public administration. The output and value added of this industry are defined as compensation of employees and consumption of fixed capital of general government agencies.
The I-O system also includes a special industry for the inventory valuation adjustment (I-O 85), which is an adjustment needed to eliminate inventory profits or losses from the change in the inventory component of output.
Activity-based industries are necessary for agriculture, construction, and real estate. Agriculture industries are classified by commodity, such as dairy farm products, because the quality of the source data on the production of agriculture commodities is believed to be better than data available by type of establishment or farm.
Construction is classified by type of activity, such as the construction of new highways and streets, rather than by the type of construction contractor, such as heavy construction contractors who pave asphalt roads, for two reasons. First, source data are not available, but more importantly, construction is an atypical activity in that it is performed in almost all industries; most establishments perform maintenance and repairs, and some perform their own new construction. This type of activity is referred to as force-account construction.
To adequately represent construction activities in the U.S. economy, the output associated with all construction activities performed by the nonconstruction industries is redefined to the construction industry. Similarly, the intermediate and value-added inputs for this work are moved to the construction industries.
The real estate industry includes all real estate rental receipts and all imputed rents for owner-occupied housing and for buildings and equipment owned and used by nonprofit institutions primarily serving households. Rental receipts are included in this industry because of a lack of data for individual industries. Imputed rents are included in the I-O accounts to make them consistent with the NIPA's.
The I-O commodity classification system.—In this system, each commodity is assigned the code of the industry in which the commodity is the primary product. This code is then used to group the production of the commodity in the industry in which it is the primary product with its production in other industries in which it is a secondary product. In a few cases, the I-O system reclassifies SIC-defined commodity groups, and a secondary product is created from an SIC-defined primary product. The output of the SIC-defined product is moved to the I-O-defined primary product group; therefore, the output represents the total output of the product, regardless of the classification of the establishments that produce it.
For example, in the SIC system, the primary product of the newspaper industry is defined as newspaper sales and newspaper advertising. In the I-O system, the primary product of the newspaper industry is newspaper sales. The advertising component is considered to be a secondary activity; therefore, advertising receipts or output are moved to the advertising commodity group. The total output for the I-O newspaper industry remains unchanged.
Reclassifications affected a small percentage of commodities, and for most of these commodities, the values were not very large. However, some commodities had significant reclassified sales. For example, the commodity "newspapers and periodicals" (I-O 26A) has $19.9 billion in total commodity output after $35.4 billion was moved to the advertising commodity (I-O 73D).
In several cases, there is no I-O commodity classification that corresponds to an industry classification. If a commodity is the primary product of more than one SIC industry, then the commodity is reclassified and given the I-O commodity number that corresponds to the I-O industry that is the largest producer of the commodity. As a result, the following detailed I-O commodities have no commodity output: Forest products (commodity 2.0701); knit outerwear mills (commodity 18.0201); knit underwear and nightwear mills (commodity 18.0202); knitting mills, not elsewhere classified (n.e.c.) (commodity 18.0203); fertilizers, mixing only (commodity 27.0202); cold-rolled steel sheet, strip, and bars (commodity 37.0104); steel pipe and tubes (commodity 37.0105); secondary nonferrous metals (commodity 38.0600); copper foundries (commodity 38.1200); nonferrous castings, n.e.c. (commodity 38.1300); Federal Government electric utilities (78.0200); State and local government passenger transit (commodity 79.0100); and State and local government electric utilities (commodity 79.0200).
This section describes the underlying definitions and conventions for valuation that are used in preparing the estimates of transactions in commodities. It also describes the valuation used in wholesale trade, retail trade, imports of goods and services, exports of goods and services, and the change in business inventories.
Transactions in commodities are valued at producers' prices in the I-O accounts. These prices exclude wholesale and retail trade margins and transportation costs, but they include excise taxes collected and remitted by producers. Transportation costs and trade margins are shown as separate purchases by the users of the commodities. The sum of the producers' value, transportation costs, and trade margins equals the purchasers' value. Thus, the flows of commodities for resale to and from wholesale trade and retail trade are not shown. If trade were shown as buying and reselling commodities, industrial and final users would make most of their purchases from a single source—trade.
To show the relationship between the production of commodities and their purchase by intermediate and final users, commodities are shown as if they move directly to users. Wholesale and retail trade margins on commodities are shown as purchases by users and are included in the trade rows of use table 2.1 (rows 69A and 69B). Transportation costs are the freight charges paid to move the commodity from the producer to the intermediate user or the final user. All transportation costs are shown as a purchase by users and are included in the transportation rows of the use table (rows 65A-E and 68B).
Wholesale trade has one primary product—distributive services for the sales of goods to retailers, intermediate users, and final users (other than persons). Distributive services provided by wholesalers include merchandise handling, stocking, selling, and billing. Wholesale trade output consists of trade margins and nonmargin output; both exclude the cost of resales. Margin output is included in the purchasers' prices of the goods that are purchased, but not in the producers' prices of those goods. Nonmargin output, which includes all customs duties, is assumed to be purchased by the producer of the goods being sold and is thus reflected in the producers' prices of the goods. Both the margin and nonmargin outputs are included in the wholesale trade row of use table 2.1 (row 69A).
Margin output is calculated in two parts. For merchant wholesalers (establishments that primarily buy and resell products manufactured by other firms) and agents and brokers (when selling goods on their own account), the trade margin is calculated as wholesale sales less the cost of goods sold plus taxes collected by the distributor. For manufacturers' sales branches (wholesale trade establishments that primarily buy and resell goods manufactured by the same firm), it is calculated as operating expenses plus taxes collected by the sales branches./22/
Nonmargin output occurs when the wholesale trade service is purchased separately from the commodity, such as when a wholesaler acts as a broker between buyer and seller. It is calculated in four parts: Operating expenses of manufacturers' sales offices, commissions on goods sold through agents and brokers, taxes collected, and customs duties. Customs duties are considered to be taxes collected by wholesale trade establishments and are included in nonmargin output.
Retail trade has one primary product—distributive services for the sale of goods primarily to persons. Its output includes primarily retail trade margins, which are measured as retail sales less the cost of goods sold plus the taxes collected by retail trade establishments. It also includes some nonmargin output, which consists mostly of mailing and handling charges of retailers. All retail trade margins are included in the retail trade row of use table 2.1 (row 69B).
Retail trade margins apply primarily to purchases by persons. However, some retail trade margins are applied to purchases by business and government—for example, some purchases of personal computers by business. Retail trade margins also are applied to some intermediate purchases by business—for example, office supplies and gasoline.
Imports of goods and services, a component of final uses, are measured by individual commodity at domestic port values. The domestic port value of an imported commodity, which includes customs duties, is considered to be equivalent to the producers' price of a domestically produced commodity. Adjustments to convert the sum total of all commodity imports of goods to foreign port value are included in the imports of transportation and wholesale trade. For example, the imports of the individual commodity apparel (row 18, column 95) in table 2.1 is -$38.5 billion, the value of imports at the port of entry to the United States. This value consists of a foreign port value of -$31.8 billion, vessel charges of -$0.7 billion, air charges of -$0.9 billion, and customs duty of -$5.1 billion. The vessel and air charges are subtracted from the transportation rows (rows 65C and 65D, column 95) to be netted against balance of payments estimates of the total imports of transportation services. The duty is subtracted from the wholesale trade row (row 69A, column 95). The sum of the domestic port values for all commodities less the transportation charges and duty in the transportation and wholesale rows is the foreign port value for all imports.
Imports of services are valued at producers' prices. There are no margins or transport costs associated with services.
Imports also include a special category referred to as "noncomparable imports." Noncomparable imports consist of goods purchased by U.S. residents abroad and of service imports with no domestic counterparts, such as port expenditures by U.S. airlines in other countries. These imports are distributed directly to industries and final users and are shown as noncomparable imports in use table 2.1 (row 80). All other imports are assumed either to be consumed within the U.S. boundaries or to have domestic equivalents.
In past benchmarks, noncomparable imports also included domestically consumed imported goods, such as bananas and coffee, that had no significant domestic counterparts. However, most imported goods now have domestic counterparts, so the 1992 benchmark I-O accounts do not include domestically consumed imports of goods in this category.
Exports of goods and services, a component of final uses, are measured by commodity at producers' prices—the same as other domestically produced commodities. Transportation and trade commodities, which are required to move exports from the producer to the port of exit, are included in the transportation and trade rows of use table 2.1. For example, exports of computer and office equipment are $22.9 billion (row 51, column 94), which represents the value of the computer and office equipment in producers' prices. The transportation costs, $0.2 billion, and the trade margins, $3.7 billion (row 51 and under the column exports of goods and services in table C), required to move the exports of computers and office equipment from producer to the port of exit are included in the rows for transportation (rows 65A-E and 68B) and for trade (rows 69A and 69B) in table 2.1.
Change in business inventories, another component of final uses, is measured by commodity at the book-value change reported by industries in the economic censuses. The inventory valuation adjustment, which is needed to remove inventory profits or losses from total gross domestic product in the I-O accounts, is shown as a single entry in table 2.1 (row 85, column 93). In the 1992 I-O accounts, the inventory valuation adjustment is -$8.0 billion.
Four supplementary tables are also presented in tables C, D, E, and F. Tables C, D, and E are bridges between the I-O accounts and the NIPA's. They present the I-O commodity composition of NIPA final demand in producers' and purchasers' prices. Specifically, table C presents the composition of all NIPA final-demand components; table D, the composition of personal consumption expenditure categories shown in NIPA table 2.4; and table E, the composition of NIPA producers' durable equipment expenditure categories shown in NIPA table 5.8./23/
Table F presents a reconciliation of the I-O estimates of exports and imports with those in the NIPA's. Both exports and imports are adjusted so that total GDP is unchanged. The adjustments are necessary because the NIPA's—unlike the I-O accounts—include the U.S. merchandise that is returned to the United States from other countries in imports and because the NIPA exports include the foreign merchandise that is reexported from the United States to other countries./24/
The detailed tables with I-O estimates at the six-digit I-O level cover 498 industries and commodities, as well as 40 types of final uses. These tables, which begin on page 45, are presented in columnar form with zeros omitted, so that they are easy to use, especially for users who are interested in only a few industries or commodities. This presentation is in contrast to that for the tables showing the summary (I-O two-digit level) I-O estimates, which are typically presented in matrix form, where all estimates can be viewed simultaneously.
The make table for industries (table 1A (rows) of the "Detailed Tables") shows the industries and the commodities that they produced, in millions of dollars at producers' prices, for six-digit industries and commodities./25/ This table presents information that corresponds to that presented in the rows in the summary I-O make table (table 1 of the "Summary Tables").
The information for each industry is contained in three columns. The first column shows the I-O code for the six-digit producing industry. The second column shows the I-O codes for the six-digit commodities that the industry produced. The third column shows the total value of the commodities that the industry produced and then the value of the output of the commodities listed in the second column. For example, the first entry in the table shows, in the first column, the six-digit industry 1.0100, dairy farm products. The second column shows that this industry produced four commodities: 1.0100, dairy farm products; 4.0001, agricultural, forestry, and fishery services; 14.0600, fluid milk; and 76.0206, other amusement and recreation services./26/ The third column shows that the total value of commodities produced by the dairy farm products industry was $20,285 million in producers' prices in 1992. This total consisted of $19,646 million, $86 million, $365 million, and $188 million for the commodities shown in the second column.
The make table for commodities (table 1B (columns) of the "Detailed Tables") shows the commodities and the industries that produced them, in millions of dollars at producers' prices, for six-digit commodities and industries. This table presents information that corresponds to that presented in the columns in the summary I-O make table (table 1 of the "Summary Tables").
The information for each commodity is contained in three columns. The first column shows the I-O code for the six-digit commodity that was produced. The second column shows the I-O codes for the six-digit industries that produced the commodity, either as a primary producer or as a secondary producer. The third column shows the total value of the output of that commodity and then the values of the commodity output produced by the industries listed in the second column. For example, the first entry in the table shows, in the first column, the six-digit commodity 1.0100, dairy farm products. The second column shows that there was only one producing industry, the six-digit industry 1.0100, dairy farm products. The third column shows that the total value of dairy farm products produced by the dairy farm products industry was $19,646 million in producers' prices in 1992.
Similarly, moving down the first column to the first multiple-industry entry, we see that for the commodity 3.0001, forestry products, the total value of output of this commodity was $8,129 million (shown in the third column). This output was produced by three industries (shown in the second column): 1.0302, miscellaneous livestock, which produced $205 million; 2.0701, forest products, $2,047 million; and 3.0001, forestry products, $5,877 million.
The use table for commodities (table 2A (rows) of the "Detailed Tables") shows for each commodity the dollar value used by each industry and final user, in millions of dollars at producers' prices, for six-digit commodities, industries, and final uses. This table presents information that corresponds to that presented in the rows in the summary I-O use table (table 2.1 of the "Summary Tables").
The information for each commodity is contained in three columns. The first column shows the I-O code for the six-digit commodity that was used. The second column shows the I-O codes for the six-digit industries and the final users of the commodity. The third column shows the total value of the commodity that the industries used and then the value of the commodity used by each industry and final user listed in the second column. For example, the first entry in the table shows, in the first column, the six-digit commodity 1.0100, dairy farm products. The second and third columns show that most of the $19,646 million of this commodity was used by six industries, but that some of it was sold to final users (that is, PCE), some went into inventories, and some was exported and imported. For example, $183 million of the commodity was used by 1.0301, the meat animals industry; $87 million by 14.0200, the creamery butter industry; $7,105 million by 14.0300, the natural, processed, and imitation cheese industry; $1,618 million by 14.0400, the dry, condensed, and evaporated dairy products industry; $490 million by 14.0500, the ice cream and frozen desserts industry; $10,027 million by 14.0600, the fluid milk industry; $78 million was sold to 91.0000, PCE; $44 million went to 93.0000, change in business inventories; $42 million went to 94.0000, exports; and $28 million was from 95.0000, imports.
The use table for industries (table 2B (columns) of the "Detailed Tables") shows the industries and the commodities and value added components that they used, in millions of dollars at producers' prices, for six-digit industries and commodities. This table presents information that corresponds to that presented in the columns in the summary I-O use table (tables 2.1 and 2.2 of the "Summary Tables").
The information for each industry is contained in three columns. The first column shows the I-O code for a six-digit industry or final user. The second column shows the I-O codes for the six-digit commodities and value added components that were used. The third column shows the total value of the commodities and value added that the industry used and then the values for each commodity and value added component. For example, the first entry in the table shows, in the first column, the six-digit industry 1.0100, dairy farm products. The second and third columns show that this industry used 80 different commodities and 3 value added components to produce its output. For example, of the $20,285 million in commodities and value added that it used, $48 million was in food grains, 2.0201; $7,878 million in feed grains, 2.0202; $1,001 million in agricultural, forestry, and fishery services, 4.0001; $1,212 million in compensation of employees, 88.0000; and $2,055 million in other value added, 90.0000, which includes components such as consumption of fixed capital, corporate profits, and business transfer payments.
The commodity requirements for each commodity table (table 4A of the "Detailed Tables") shows the six-digit commodities that were required directly and indirectly to deliver a dollar of a commodity to final users. This table presents information that corresponds to that presented in the summary I-O commodity-by-commodity total requirements table (table 4 of the "Summary Tables"); however, this table presents only the 15 largest required commodities and an "all other" category that summarizes the requirements for the remaining commodities./27/ For a majority of the commodities, the largest 15 required account for at least 80 percent of the total requirements. At the maximum, the "all other" category accounts for approximately 33 percent of the total multiplier (for I-O 11.0101, new residential 1-unit-structures, nonfarm). The largest coefficient in any "all other" category is 0.02989 (for I-O 34.0301, leather gloves and mittens, where it accounts for slightly more than 1 percent of the multiplier). The coefficients in this table are referred to as "commodity-by-commodity total requirements coefficients."
The information for each commodity is contained in three columns. The first column shows the I-O code for the six-digit commodity that was delivered to final users. The second column shows the I-O codes for the 15 largest six-digit commodities that were required directly and indirectly to deliver a dollar of this commodity to final users. The third column shows the total commodity output required to deliver a dollar of the commodity listed in the first column to final users, and then the requirements for the 15 commodities and the "all other" group that appear in the second column. For example, the first entry in the table shows, in the first column, the six-digit commodity 1.0100, dairy farm products, that was delivered to final users. The second column shows that among the commodities required to deliver a dollar of this commodity to final users were, for example, 1.0100, dairy farm products; 2.0202, feed grains; and 4.0001, agricultural, forestry, and fishery services. The third column shows that the total commodity output required to deliver a dollar of the commodity dairy farm products was $2.74911. The requirements for dairy farm products were $1.00032; for feed grains, $0.42183; for agricultural, forestry, and fishery services, $0.08312; and for "all other," $0.50560.
The industry output requirements for each commodity table (table 5A of the "Detailed Tables") shows the output required directly and indirectly from each industry to deliver a dollar of a commodity to final users. This table presents information that corresponds to that presented in the summary I-O industry-by-commodity total requirements table (table 5 of the "Summary Tables"); however, this table presents only the 15 largest producing industries and an "all other" group, which summarizes the requirements for the remaining industries that produced output used in the commodity. For a majority of the commodities, the largest 15 required account for at least 80 percent of the total requirements. At the maximum, the "all other" category accounts for approximately 40 percent of the total multiplier (for I-O 14.3202, food preparations, n.e.c.). The largest coefficient in any "all other" category is 0.031253 (for I-O 1.0200, poultry and eggs, where it accounts for slightly more than 1 percent of the multiplier). The coefficients in this table are referred to as "industry-by-commodity total requirements coefficients."
The information for each industry is contained in three columns. The first column shows the I-O code for the six-digit commodity that was delivered to final users. The second column shows the I-O codes for the 15 largest six-digit industries that produced outputs used, directly and indirectly, in the production of the commodity listed in the first column. The third column shows the total industry output multiplier, which is the total amount of industry output required to deliver a dollar of the commodity listed in the first column to final users, and then the requirements for the 15 largest industries and the "all other" group that appear in the second column. For example, the first entry in the table shows, in the first column, the six-digit commodity 1.0100, dairy farm products, which was delivered to final users. The second column shows, for example, that the industries 1.0100, dairy farm products; 2.0202, feed grains; and 2.0600, oil bearing crops, produced outputs used in the production of this commodity. The third column shows that the total industry output required to deliver a dollar of the commodity dairy farm products was $2.74320. Of this, the dairy farm products industry was required to produce $1.00083; feed grains, $0.42383; oil bearing crops, $0.03120; and "all other" industries, $0.51927.
The I-O commodity composition of NIPA PCE table (table D.1 of the "Detailed Tables") shows the six-digit I-O commodity composition of each NIPA PCE category (as listed by line number code in NIPA table 2.4) in millions of dollars valued at producers' prices. The table also provides information by six-digit I-O code for transportation costs and wholesale and retail trade margins for the sum of the commodities within each PCE category. By providing these costs and margins, the table provides a bridge between I-O commodities valued in producers' prices and NIPA PCE valued in purchasers' prices. This table presents information that corresponds to that presented in the summary I-O commodity composition of PCE table (table D, beginning on page M–18).
The information for each PCE category is contained in two columns under each NIPA code number and title. The first column shows the six-digit codes for the I-O commodities, transportation costs, and wholesale and retail trade margins that constituted the NIPA category. The second column shows, as the first entry, the total for the I-O commodity composition of the NIPA PCE category valued in purchasers' prices; this total is composed of the sum of the commodities valued in producers' prices and the transportation costs and trade margins in the category. The second entry is the total for the six-digit I-O commodities valued in producers' prices. This entry is followed by the values for the individual commodities, the total for transportation costs and for wholesale and retail trade margins, and the values for the individual transportation costs and wholesale and retail trade margins for the NIPA category.
For example, the first entry in the table shows the NIPA code 3 and category title "Food purchased for off-premise consumption (n.d.)." As shown in the first column, in 1992 this category consisted of I-O commodities such as 1.0200, poultry and eggs; 2.0202, feed grains; 2.0401, fruits; and transportation costs and trade margins such as 65.0100, railroads and related services, and 69.0100, wholesale trade. The second column shows that the total value of the commodities in the NIPA category, in purchasers' prices, was $413,709 million. The total value of the six-digit commodities in the category, in producers' prices, was $259,465 million, which consisted of $1,866 million for poultry and eggs, $354 million for feed grains, $6,626 million for fruits, and so on down the column. The entry for transportation costs and trade margins shows that they totaled $154,244 million and consisted of $1,208 million for railroads and related services, $43,688 million for wholesale trade, and so on.
The I-O commodity composition of NIPA PDE expenditures table (table E.1 of the "Detailed Tables") shows the six-digit I-O commodity composition of each NIPA PDE category (as listed by line number code in NIPA table 5.8) in millions of dollars valued at producers' prices. The table also provides information by six-digit I-O code for transportation costs and wholesale and retail trade margins for the sum of the commodities within each PDE category. By providing these costs and margins, the table provides a bridge between I-O commodities valued in producers' prices and NIPA PDE valued in purchasers' prices. This table presents information that corresponds to that presented in the summary I-O commodity composition of PDE expenditures table (table E, on page M–24).
The information for each PDE category is contained in two columns under each NIPA code number and title. The first column shows the six-digit codes for the I-O commodities, transportation costs, and wholesale and retail trade margins that constituted the NIPA category. The second column shows, as the first entry, the total for the I-O commodity composition of the NIPA PDE category valued in purchasers' prices; this total is composed of the sum of the commodities valued in producers' prices and the transportation costs and trade margins in the category. The second entry is the total for the six-digit I-O commodities valued in producers' prices. This entry is followed by the values for the individual commodities, the total for transportation costs and for wholesale and retail trade margins, and the values for the individual transportation costs and wholesale and retail trade margins for the NIPA category.
For example, the first entry in the table shows the NIPA code 5 and title "Computers and peripheral equipment." As shown in the first column, in 1992 this category consisted of the I-O commodities 51.0103, electronic computers; 51.0104, computer peripheral equipment; 73.0104, computer and data processing services; and transportation costs and trade margins such as 65.0100, railroads and related services, and 69.0100, wholesale trade. The second column shows that the total value of the commodities in the NIPA category, in purchasers' prices, was $43,580 million. The total value of the six-digit commodities in the category, in producers' prices, was $36,139 million, which consisted of $15,819 million for electronic computers and $16,879 million for computer peripheral equipment, and $3,441 million for computer and data processing services. The entry for transportation costs and trade margins shows that they totaled $7,441 million and consisted of $2 million for railroads and related services, $5,934 million for wholesale trade, and so on.
Footnotes:
1. Earlier benchmark I-O accounts covered 1947, 1958, 1963, 1967, 1972, 1977, 1982, and 1987. The 1987 I-O accounts were presented in the April and May 1994 issues of the SURVEY OF CURRENT BUSINESS.
2. The 1992 I-O estimates will be incorporated into the NIPA's during the next comprehensive NIPA revision. See Leon W Taub and Robert P. Parker, "Preview of Revised NIPA Estimates for 1992 From the 1992 I-O Accounts," SURVEY 77 (December 1997): 11–15.
3. See "Improving the Quality of Economic Statistics: The 1992 Economic Statistics Initiative," SURVEY 71 (March 1991): 4–5.
4. See "Mid-Decade Strategic Review of BEA's Accounts: Maintaining and Improving Their Performance," SURVEY 75 (February 1995): 36–66; "Mid-Decade Strategic Review of BEA's Economic Accounts: An Update," SURVEY 75 (April 1995): 48–56; and "BEA's Mid-Decade Strategic Plan: A Progress Report," SURVEY 76 (June 1996): 52–55.
5. The 1987 benchmark I-O accounts were released in the spring of 1994—seven years after the 1987 economic census and three years after the publication of the 1982 benchmark I-O accounts. To speed up the availability of the 1987 I-O accounts, BEA devised a set of procedures that captured the most important parts of the 1987 economic census data but abbreviated the process of assembling the wide variety of other non-census data needed to complete a full benchmark. The use of these abbreviated procedures to prepare the 1987 benchmark I-O accounts enabled BEA to more quickly turn its resources towards preparing a complete set of benchmark accounts for 1992.
6. See the box "Personal Consumption Expenditures and Producers' Durable Equipment" on page M–5.
7. See "Preview of the Comprehensive Revision of the National Income and Product Accounts: New and Redesigned Tables," SURVEY 75 (October 1995): 30–39. Also see "Improved Estimates of the National and Product Accounts for 1959–95: Results of the Comprehensive Revision," SURVEY 76 (January/February 1996): 1–31.
8. The services of general government fixed assets, measured as depreciation, are now included in government consumption expenditures. However, the use of depreciation as a measure of the value of services of government fixed assets is only a partial measure of the total value. In theory, the service value of an asset should equal the reduction in the value of the asset due to its use during the current period (depreciation) plus a return equal to the current value the asset could earn if invested elsewhere (net return). The consumption of fixed capital by government does not provide an estimate of the full value of the services of government fixed assets, because the net rate of return on these assets is assumed to be zero. See Robert P. Parker and Jack E. Triplett, "Preview of the Comprehensive Revision of the National Income and Product Accounts: Recognition of Government Investment and Incorporation of a New Methodology for Calculating Depreciation," SURVEY 75 (September 1995): 33–41.
9. See Robert E. Yuskavage, "Improved Estimates of Gross Product by Industry, 1959–94," SURVEY 76 (August 1996): 140.
10. The staff of BEA and of the Bureau of Transportation Statistics of the U.S. Department of Transportation have developed a set of transportation satellite accounts for the United States based on the 1992 benchmark I-O accounts. See Bingsong Fang, Xiaoli Han, Ann M. Lawson, and Sherlene K.S. Lum, "U.S. Transportation Satellite Accounts for 1992," SURVEY 78 (April 1998): 16–27.
11. Estimates of purchases of I-O commodities in purchasers' prices can be derived by adding transportation costs and wholesale and retail trade margins to the values in producers' prices. These estimates are shown in table C for all I-O commodities included in NIPA final demand; in table D, for all I-O commodities included in personal consumption expenditure categories; and in table E, for all I-O commodities included in producers' durable equipment categories.
12. In the designation that is used for I-O tables, the content of the rows is referred to first and that of the columns, second. For example, in a "commodity-by-industry" table, the commodities are in the rows, and the industries are in the columns.
13. Primary and secondary products and the classification of industries are discussed further in the section "Definitions and conventions for classification," beginning on page M–14.
14. See Robert P. Parker, "Improved Adjustments for Misreporting of Tax Return Information Used to Estimate the National Income and Product Accounts, 1977," SURVEY 64 (June 1984): 17–25.
15. For more detailed information, see U.S. Department of Commerce, Bureau of Economic Analysis, Personal Consumption Expenditures, Methodology Paper Series MP–6 (Washington, DC: U.S. Government Printing Office, June 1990): 31–34.
16. The final-use multipliers presented, including the commodity-by-commodity total requirements table (table 4) and industry-by-commodity total requirements table (table 5), identify the cumulative effects on total industry and commodity outputs that result from a change in final use. In contrast to conventional macroeconomic multipliers that measure the cumulative impact on final output of a policy change, such as the decline in GDP that results from a reduction in government spending, these final-use multipliers measure the impact of a change in final demand (uses) on gross output (final and intermediate output). Indeed, shifts in the composition of final uses can have a "multiple" impact on industry and commodity output but can have no effect on the level of total GDP.
17. In an open economy, the production effects are likely to be reflected as an increase in both domestic production and imports. To separate the effects on domestic production from those on imports, analysts generally use a special set of I-O tables that includes an import matrix that identifies the intermediate purchases by producers that are obtained from foreign sources.
18. Estimates of regional economic effects derived from BEA's Regional Input-Output Modeling System are based mainly on two data sources: The U.S. benchmark I-O accounts and BEA's county estimates of wage and salary disbursements at the four-digit SIC level. These estimates are available from BEA's Regional Economic Analysis Division. For more information, see U.S. Department of Commerce, Bureau of Economic Analysis, Regional Multipliers: A User Handbook for the Regional Input-Output Modeling System (RIMS II), Third Edition (Washington, DC: U.S. Government Printing Office, 1997).
19. Jose Campa and Linda S. Goldberg, "The Evolving External Orientation of Manufacturing: A Profile of Four Countries," Economic Policy Review 2 (1997): 53–81.
20. Appendix A provides a list of I-O industries and the relationships of these industries to the 1987 SIC codes. For more information on the SIC, see Office of Management and Budget, Statistical Policy Division, Standard Industrial Classification Manual, 1987 (Washington, DC: U.S. Government Printing Office, 1987): 11–18.
21. Establishments defined as government enterprises follow the same classification used in the NIPA's. For more information, see U.S. Department of Commerce, Bureau of Economic Analysis, Government Transactions, Methodology Paper Series MP–5 (Washington, DC: U.S. Government Printing Office, November 1988): 6.
22. Expenses are used because there are no data on cost of goods sold for these wholesale trade establishments.
23. NIPA tables 2.4 and 5.8 are published annually in the SURVEY, most recently in the August 1998 issue.
24. Returned U.S. merchandise consists of domestically produced goods that were exported for processing, or assembly, or both and then returned to the United States. Reexports consist of the commodities that were previously imported into the United States and then exported from the United States in substantially the same condition as when they were imported. A timing adjustment is made for reexports that entered the country in an earlier year. The I-O accounts measure this value as general imports less imports for consumption, and the value is shown as a transaction between noncomparable imports and inventory change.
25. The I-O accounts use two classification systems, one for industries and another for commodities, but both systems generally use the same I-O numbers and titles. For further information, see the section "Definitions and conventions for classification" on page M–14 and "Appendix A: Classification of Industries in the 1992 Benchmark Input-Output Accounts," which begins on page M–32.
26. The other amusement and recreation services commodity consists of receipts that the dairy farm products industry receives for services provided at public golf courses, amusement parks, and the like. The full list of service areas is provided by the related SIC codes shown in appendix A.
27. Multipliers for all commodities are contained on the diskettes offered for sale; see the box "Data Availability" on page M–3.
