Preview of the comprehensive revision of the annual industry accounts: integrating the annual input-output accounts and the gross-domestic-product-by-industry accounts.

Moyer, Brian C. ; Planting, Mark A. ; Fahim-Nader, Mahnaz 等

IN JUNE, the Bureau of Economic Analysis (BEA) will release the initial results of its comprehensive revision of the annual industry accounts. The centerpiece of this revision is the integration of the annual input-output (I-O) accounts and the gross-domestic-product-(GDP)-by-industry accounts for 1998-2002. For the first time, the annual I-O accounts and the GDP-by-industry accounts will be released concurrently and will present consistent measures of gross output, intermediate inputs, and value added by industry.

Integration can be achieved through a variety of methods. For example, many countries produce integrated annual I-O accounts and GDP-by-industry accounts by assuming that the industry ratios of intermediate inputs to gross output do not change from the most recent set of benchmark I-O accounts; these ratios are then used to estimate a time series of value added by industry from annual source data on gross output by industry. BEA has taken a different approach in developing an integration methodology because of the richness of the source data that are available in the United States; for example, the Bureau of the Census, the Bureau of Labor Statistics, and the Internal Revenue Service provide data that can be used to estimate value added by industry. However, the quality of these source data varies by data series and by industry; as a result, BEA has developed an integration methodology that ranks the available source data by quality and estimates a balanced set of annual I-O accounts and GDP-by-industry accounts that incorporate a weighted average of these source data on the basis of their relative quality. In this manner, BEA's integrated annual I-O accounts and GDP-by-industry accounts will provide a more consistent and a more accurate set of estimates.

This integration is the most recent improvement in a series of improvements to the industry accounts. As outlined in its strategic plan, BEA continues to make significant improvements to its industry accounts. These improvements include the following: Resuming the publication of the annual I-O accounts; accelerating the release of the annual I-O accounts to within 3 years after the end of the reference year; expanding the GDP-by-industry accounts to include gross output and intermediate inputs for all industries; developing an accelerated set of GDP-by-industry accounts that are available with a lag of just 4 months after the end of the reference year; and continuing to work closely with the Bureau of the Census on new initiatives to improve the quality and the timeliness of the source data used to prepare the industry accounts. With these improvements, general improvements to the quality of industry source data, and improvements to data-processing systems, BEA is now ready to integrate the annual I-O accounts and the GDP-by-industry accounts. (1)

This comprehensive revision undertakes the integration of the annual I-O accounts and the GDP-by-industry accounts, but BEA's long-run goal is the "full" integration of all the industry accounts, including the benchmark I-O accounts, and the integration of the industry accounts with the national income and product accounts (NIPAs). (2) Integration with the NIPAs will allow the industry accounts to provide annual feedback to the NIPAs that could potentially improve the commodity composition of GDR Full integration is expected in the 2008-2010 timeframe when the necessary data on intermediate inputs by industry will be available from the 2002 Economic Census and from the annual surveys that are currently being collected and tabulated by the Bureau of the Census.

This article presents the integration methodology that is being used for 1998-2002 and for future updates. An article in the June issue of the SURVEY OF CURRENT BUSINESS will describe the results of the comprehensive revision to the annual industry accounts, including the conversion to the 1997 North American Industry Classification System (NAICS) back to 1998 and the release of the accelerated GDP-by-industry estimates for 2003. (3)

Highlights of the integration methodology are as follows.

* It allows BEA to incorporate the most timely and highest quality source data into both the annual I-O accounts and the GDP-by-industry accounts.

* The annual I-O accounts and the GDP-by-industry accounts will be released concurrently for 1998-2002, and for the first time, both sets of accounts will present fully consistent measures of gross output, intermediate inputs, and value added by industry.

* The quality of the annual industry accounts will be improved because the accounts will be prepared within a balanced I-O framework; that is, all the components of the accounts will be in agreement within a balanced row-and-column framework.

* The release of the annual I-O accounts will be accelerated by 2 years in a sequence of two steps that will be completed by the fall of 2004, when they will be released 1 year after the end of the reference year.

* For the first time, the 1998-2002 annual I-O accounts will be a consistent time series; they will be more useful for analyses of trends over time.

This article is presented in two parts. The first part presents the rationale for integration. The second part describes the integration methodology.

The Rationale for Integration

BEA prepares two sets of industry accounts: The I-O accounts, which consists of the benchmark I-O accounts and the annual I-O accounts, and the GDP-by-industry accounts. Both the I-O accounts and the GDP-by-industry accounts present measures of gross output, intermediate inputs, and value added by industry; however, these measures have not been consistent across the two sets of accounts, because of the use of different methodologies and different source data. The goal of the integration is to eliminate these inconsistencies and to improve the accuracy of both sets of accounts.

In this part, the methodologies used to prepare each set of accounts are reviewed, the relative strengths of each methodology are discussed, and the benefits of integrating the annual I-O accounts and the GDP-by-industry accounts are described.

I-O accounts methodology

The benchmark I-O accounts are prepared every 5 years and are based on data from the quinquennial economic censuses. These accounts present a detailed picture of how industries interact to provide inputs to, and use output from, each other to produce the Nation's GDP. (4) The annual I-O accounts update the most recent benchmark I-O accounts. The annual I-O accounts are more timely than the benchmark I-O accounts, but they are generally less detailed because they rely on annual survey data. (5) At present, the I-O accounts are prepared only in current dollars. (6)

Both the benchmark and the annual I-O accounts are prepared within a balanced row-and-column framework that is presented in two tables: A "make" table and a "use" table. The make table shows the commodities that are produced by each industry, and the use table shows the commodities that are used in industry production and that are consumed by final users. In the use table, the columns consist of industries and final uses (chart 1). The column total for an industry is its gross output (consisting of sales or receipts, other operating income, commodity taxes, and inventory change). The rows in the use table consist of commodities and value added. The commodities are the goods and services that are produced by industries or imported and that are consumed either by industries in the production process or by final users. The commodities consumed by industries in the production process are referred to as intermediate inputs (consisting of energy, materials, and purchased services). Value added in the I-O accounts is computed as a residual--that is, as gross output less intermediate inputs by industry. In concept, this residual, which represents the sum of the costs incurred and the incomes earned in production, consists of compensation of employees, gross operating surplus, and taxes on production and imports, less subsidies. (7) GDP equals valued added summed over all industries, and it also equals final uses summed over all commodities.

At BEA, the I-O accounts have traditionally served two major purposes, both of which have focused on information about the use of commodities. First, the accounts provide the NIPAs with best-level estimates for the commodities that compose GDP in a benchmark year. Second, they provide the NIPAs with information on the split between intermediate inputs and final uses of commodities for the years after a benchmark year, which is critical for GDP determination. GDP measures final uses, while most source data commingle intermediate-use and final-use information. Because of their importance in determining the levels of GDP in the NIPAs, the I-O accounts have traditionally focused more on the commodity composition of the economy and less on the measures of value added by industry.

GDP-by-industry accounts methodology

In contrast to the I-O accounts, the GDP-by-industry accounts have traditionally focused on the industry composition of the economy and the measures of value added by industry; therefore, the GDP-by-industry accounts are ideally suited for analysis of industry shares of GDP and contributions to GDP growth. The GDP-by-industry accounts provide time series estimates of gross output, of intermediate inputs, and of value added by industry and the corresponding price and quantity indexes? Gross output by industry in these accounts is computed by taking best-level estimates from the most recent set of benchmark I-O accounts and by using the annual survey data as extrapolators.

The measures of value added by industry are derived from the industry distributions of the components of gross domestic income (GDI) from the NIPAs. The GDI-based measures of value added by industry represent the sum of the costs incurred and the incomes earned in production and are estimated as the sum of the industry distributions of compensation of employees, gross operating surplus, and taxes on production and imports, less subsidies. These industry distributions incorporate additional annual survey data and source data from annual tax returns and administrative records. In the GDP-by-industry accounts, intermediate inputs by industry are measured as a residual--that is, gross output less value added by industry. Finally, gross output and intermediate inputs by industry are deflated using detailed price indexes to produce price indexes and quantity indexes of gross output, of intermediate inputs, and of value added by industry.

Relative strengths of each methodology

The primary strength of the I-O accounts methodology is the balanced row-and-column framework in which the detailed estimates of gross output and intermediate inputs by industry are prepared; this framework allows for a simultaneous look at both the industry composition and the commodity composition of the economy. The primary strength of the GDP-by-industry accounts methodology is the direct approach to estimating a time series of value added by industry from high quality source data.

The strength of a balanced framework is demonstrated in chart 1. A balanced use table ensures that the industry estimates of the I-O accounts (the column totals) are in balance with the commodity estimates of the I-O accounts (the row totals). This framework tracks all of the detailed input and output flows in the economy and guarantees that each commodity that is produced is either consumed by industries as an intermediate input or is consumed by final users. An imbalance in the use table--for example, too little, or too much, supply of a commodity after intermediate inputs by industry and final uses have been accounted for--may indicate a problem with the measures of gross output or intermediate inputs by industry, so a balanced framework provides a "consistency check" for the data in the use table. The I-O accounts are prepared within a balanced framework, but currently, there is no comparable procedure to balance industries and commodities in the GDP-by-industry accounts.

The strength of the GDP-by-industry methodology is that the estimates of value added by industry are derived directly from high quality source data, so these measures generally provide better estimates of value added for industries for which the I-O estimates of value added are considered weak. Several factors affect the quality of the GDP-by-industry estimates on an industry-by-industry basis. For example, gross operating surplus, one component of value added by industry, includes several items--such as corporate profits before tax, corporate net interest, and corporate capital consumption allowances--that are based on corporate tax return data from the Internal Revenue Service (IRS). Because the consolidated tax return data of an enterprise may account for activities in several industries, BEA must convert these enterprise-based, or company-based, data to an establishment, or plant, basis. The conversion can introduce errors because it is based on the employment of establishments that is cross-classified by enterprises and because it is based on relationships from an economic census year that are likely to change over time.

In addition, proprietors' income, another component of gross operating surplus, can introduce errors because the industry distributions of proprietors' income are based on incomplete source data. Industries with large shares of value added that are accounted for by proprietors' income are regarded as having estimates of value-added that are of lower quality. (9)

The GDP-by-industry value-added measures may be of a higher or lower quality than the value-added measure in the benchmark I-O accounts, depending on industry-specific information. For an industry with high quality data on gross output and intermediate inputs, the measure of value added in the benchmark I-O accounts may be better than the GDP-by-industry measure, particularly when the amount of enterprise-establishment adjustment for the industry is significant or when the share of proprietors' income in the industry is significant. Alternatively, for an industry with little enterprise-establishment adjustment and a small share of proprietors' income, the GDP-by-industry measure may be considerably better than the benchmark I-O measure, particularly if the coverage of gross output and intermediate inputs in the quinquennial economic census is low. For the 1997 benchmark I-O accounts, less than half of the economy-wide intermediate inputs were covered by the economic census; for many industries, this low coverage results in a lower quality measure of value added in the benchmark I-O accounts.

In contrast to the benchmark I-O measures, the GDP-by-industry value-added measures are always preferred to the annual I-O measures. The annual I-O estimates of intermediate inputs by industry are currently sparse and unable to yield high quality measures of value added by industry. (10)

Benefits of the integration methodology

The integration methodology incorporates the relative strengths from both the I-O accounts and the GDP-by-industry accounts. It yields a set of annual I-O accounts and GDP-by-industry accounts that are prepared within a balanced framework and that incorporate the most timely and best source data, including the GDI-based measures of value added from the GDP-by-industry accounts. It ensures the consistency of the estimates of gross output, of intermediate inputs, and of value added by industry in both the annual I-O accounts and the GDP-by-industry accounts.

The benefits of integration, however, go beyond consistency and the use of the best available source data. Because the annual I-O accounts will be estimated concurrently with the GDP-by-industry accounts, they will be released on an accelerated schedule. The 2002 annual I-O table, scheduled for release in June 2004, will be released 18 months rather than 36 months after the end of the reference year. In addition, beginning in the fall of 2004, the annual I-O accounts will adopt the revision schedule of the NIPAs; the revised tables for 2001 and 2002 and new tables for 2003 will be released. The revised I-O estimates that are consistent with the annually revised NIPA estimates provide users with yet another level of consistency. Finally, the integration methodology will impose a time series consistency on the annual I-O tables, making the tables more useful for analyses of trends over time.

A further benefit of the integration methodology is a "feedback loop" to the NIPAs that is demonstrated by examining the relationships among the national accounts (chart 2). Before the integration of the annual I-O accounts and the GDP-by-industry accounts, the benchmark I-O accounts provided the following: A starting point for updating the annual I-O accounts (arrow 1), the best-level estimates of gross output to the GDP-by-industry accounts (arrow 2), and the best-level estimates and commodity splits of GDP to the NIPAs (arrow 3). The NIPAs provided estimates of GDI by industry to the GDP-by-industry accounts (arrow 4) and information on the annual composition of GDP to the annual I-O accounts (arrow 5). The integration results in an exchange of information between the annual I-O accounts and the GDP-by-industry accounts (arrow 6), and it also provides a feedback loop to the NIPAs (arrow 7). Because the integrated Industry accounts will be prepared within a balanced framework, they will provide annual estimates of the commodity composition of GDP that could potentially be used to improve the NIPA measures of GDP.

Finally, integration of the annual I-O accounts and the GDP-by-industry accounts is the first step towards BEA's long-run goal of the full integration across all of the industry accounts, including the benchmark I-O accounts, and integration of the industry accounts with the NIPAs. The framework used to integrate the annual I-O accounts and the GDP-by-industry accounts could be extended to accommodate the integration of the benchmark I-O accounts and the NIPAs. Under full integration, the benchmark I-O accounts would provide the best measures of value added by industry because they would incorporate the most comprehensive and highest quality information on gross output and intermediate inputs by industry. In addition, the annual I-O accounts and the GDP-by-industry accounts would incorporate annual data on intermediate inputs by industry, so that the annual measures of value added by industry would be independent of the NIPA measures of GDI and would therefore enhance the feedback loop to the NIPAs. Full integration is expected in the 2008-2010 timeframe when the necessary data on intermediate inputs by industry will be available from the 2002 Economic Census and from the annual surveys that are currently being collected and tabulated by the Bureau of the Census. As part of additional data-sharing initiatives, the sources of the differences in data from other Federal statistical agencies will become more apparent, and BEA will be able to further enhance the consistency and quality of its fully integrated accounts.

Integration Methodology

The methodology, including the source data and the estimating procedures that will be used to integrate the annual I-O accounts and the GDP-by-industry accounts is discussed in this section. The methodology is described in a sequence of five steps: (1) Establishing a level of detail for both industries and commodities; (2) revising the previously published 1997 benchmark I-O accounts that will serve as a reference point for the integrated accounts; (3) developing a time series for the annual estimates of value added by industry for 1998-2002; (4) updating and balancing the annual I-O accounts for 1998-2002 on the basis of the revised 1997 benchmark I-O accounts and on the 1998-2002 estimates of value added by industry; and (5) preparing price and quantity indexes for the GDP-by-industry accounts for 1998-2002.

Level of industry and commodity detail

The first step in integrating the annual I-O accounts and the GDP-by-industry accounts is to establish the level of detail that can be used for both sets of accounts. Table A shows this detail and the corresponding 1997 NAICS industry codes. (11) For the annual I-O accounts, the level of detail applies to both industries and commodities. The integrated industry accounts will be published at the level shown in table A; but the estimation procedures for most of the other steps are applied at a finer level of industry and commodity detail in order to ensure the best aggregate estimates.

Revised 1997 benchmark I-O accounts

The second step in the integration process is to revise the previously published 1997 benchmark I-O accounts, because the integrated annual I-O accounts and GDP-by-industry accounts will be based on the relationships and levels set by the revised accounts. The revisions are from two sources.

First, the 1997 benchmark I-O accounts are modified to incorporate the definitional, methodological, and statistical changes from the 2003 comprehensive NIPA revision. Incorporating these changes ensures that the integrated accounts for 1998-2002 are consistent with the levels of GDP in the NIPAs. The major NIPA changes and their effects on the 1997 benchmark I-O accounts are summarized in table B.

Second, after the NIPA revisions are incorporated, the level and the composition of value added for each industry are further modified on the basis of information from both the I-O accounts and the GDP-by-industry accounts)2 As discussed above, value added by industry in the I-O accounts is computed as the difference between gross output and intermediate inputs by industry, and value added by industry in the GDP-by industry accounts is computed from the industry distributions of GDI from the NIPAs. In general, these two measures of value added for an industry will differ. Because a major benefit of integrating the two sets of accounts is to incorporate the best available information from each, a "combined" value added by industry is computed and incorporated into the 1997 benchmark I-O accounts. (13)

The combined value added by industry is an average with weights determined by criteria that indicate the relative quality of the benchmark I-O measure of value added and the GDP-by-industry measure of value added. In general, these criteria are based on the quality of the source data used for each set of accounts. The criteria for the benchmark I-O accounts include the following:

* The percent of intermediate inputs by industry that are covered by source data from the quinquennial economic census, and

* The percent of an industry's total gross output that is accounted for by the quinquennial economic census.

The criteria for the GDP-by-industry accounts include the following:

* The quality and the percent of adjustments that are made to convert the enterprise-based, profit-type income data to an establishment basis, and

* The percent of an industry's value added that is accounted for by proprietors' income.

For both the benchmark I-O accounts and the GDP-by-industry accounts, these criteria, along with expert analyst judgment, are applied at the industry level shown in table A in order to identify point estimates and estimates of variance for each industry's measure of value added. (14) For each industry, these point estimates and estimates of variance are used to develop probability distributions of value added by industry for each set of accounts. Each probability distribution represents a measure of the likelihood that the "true" value added takes on a particular value, given the available source data. The distributions are then combined to produce a combined measure of value added by industry. Essentially, the combined measure is an average of the two point estimates; the weights are determined by the relative variances--a point estimate with a smaller variance receives a larger weight.

Chart 3 provides an example of the process used for the educational services industry. The point estimate of value added is $63.4 billion from the revised 1997 benchmark I-O accounts and $61.3 billion from the GDP-by-industry accounts. The related probability distribution for each point estimate is shown in chart 3. Note that the GDP-by-industry distribution is more peaked--that is, it has a smaller variance--than the distribution from the I-O accounts. The smaller variance indicates a relatively better GDP-by-industry estimate, which is the result of the small amount of enterprise-establishment adjustments made to the GDI data for this industry. In contrast, the larger variance of the probability distribution of the point estimate for the benchmark I-O accounts is the result of the limited coverage of this industry's gross output and intermediate inputs in the quinquennial economic census. As expected, the combined estimate of $62.1 billion is closer to the GDP-by-industry estimate than to the I-O estimate. Because more information is used to make this combined estimate, its overall quality is higher than that for either of the individual estimates, as shown by their distributions in chart 3.

After the two sets of revisions have been made to the 1997 benchmark I-O accounts, it is then balanced. For this balancing, each industry's new measure of value added is fixed, and total intermediate inputs is estimated. Balancing ensures that the use of commodities equals the supply of commodities, the sum of value added and intermediate inputs by industry equals gross output by industry, and the sum of final uses equals published GDP for 1997. The revised 1997 benchmark I-O accounts then provide a starting point for preparing the annual I-O accounts for 1998-2002.

A time series of value added for 1998-2002

A time series of value added by industry is prepared by extrapolating the revised 1997 benchmark I-O estimates of value added by industry forward to 1998-2002 using the GDI-based measure of value added by industry. The components of GDI that compose value added by industry and information on the major source data and on the industrial distribution for each component are shown in table C.

As discussed above, the quality of the GDI-based value-added measures depends on a number of factors, including the adjustments to convert enterprise-based, profit-type GDI data to an establishment basis. Nevertheless, these measures provide preferred indicators of value-added growth when compared with the annual I-O residual methodology primarily because the annual I-O source data on intermediate inputs by industry are currently too sparse to yield high quality measures of value added by industry.

Updated and balanced annual I-0 accounts for 1998-2002

Updating and balancing the annual I-O accounts requires completing five tasks for each annual I-O table for 1998-2002. Each task provides essential inputs for the next task. These tasks include (1) calculating industry and commodity gross output; (2) estimating the commodity composition of intermediate inputs for each industry; (3) estimating the domestic supply of each commodity; (4) incorporating the commodity compositions of the GDP expenditure components for personal consumption expenditures (PCE), gross private fixed investment, and government consumption and investment expenditures; and (5) balancing the use table.

Industry and commodity gross output. For most industries and commodities, annual source data are available to estimate current-year industry and commodity gross output. For manufacturing, trade, and most service industries, the annual source data are based on surveys from the Bureau of the Census. For agriculture, insurance, and government enterprises and for major parts of transportation, utilities, finance, and real estate, the annual source data are based on other government sources or private sources. For the industries and commodities for which annual source data at the 1997 benchmark I-O level of detail are not available, aggregated source data are used to extrapolate the industry and commodity gross-output estimates. Table D shows the data sources used to update industry and commodity gross output.

Commodity composition of intermediate inputs. The estimates of the composition of intermediate inputs by industry are based on the revised 1997 benchmark I-O relationships and are adjusted for changes in relative prices and other factors.

First, each industry's current-year output is valued in the prices for the previous year and is estimated using an industry price index that is calculated by weighting together--in a Fisher index-number formula--the commodity price indexes that compose the industry's output. Generally, the number of price indexes available for commodities is fewer than the number of commodities; for commodities for which a price index is unavailable, an aggregate price index is applied to multiple commodities. The data sources used to prepare the commodity price indexes are shown in table D.

Second, each industry's output for the current year that is valued in the prices for the previous year is multiplied by the previous year's direct requirements coefficient for the industry to yield current-year intermediate inputs valued in the prices of the previous year. (15) This procedure assumes that in the current year, the composition of an industry's intermediate inputs per dollar of output (valued in the prices of the previous year) is unchanged from the previous year. The results are then reflated to current-year prices using the commodity price indexes.

Finally, commodity taxes, transportation costs, and trade margins for each intermediate input are estimated. Commodity taxes are added to raise the intermediate inputs from a basic price valuation to a producers' price valuation. Transportation costs and trade margins are estimated to provide a purchasers' price valuation of intermediate inputs. (16)

Domestic supply. Domestic supply is the total value of goods and services available for consumption as intermediate inputs by industries or as PCE, private fixed investment, and government consumption and investment expenditures; it is calculated as domestic commodity gross output, plus imports, less exports, less the change in private inventories. The estimates of imports and exports are based on foreign trade statistics from the Bureau of the Census and on BENs international transactions accounts. For the current year, the change in private inventories by industry are from the NIPAs, and the commodity composition of inventories held by industries are based on the revised 1997 benchmark I-O relationships.

Commodity composition of final uses excluding trade and change in private inventories. The annual estimates of the major expenditure components of final uses for PCE, private fixed investment, and government consumption and investment are obtained from the NIPAs. Initial commodity compositions for these expenditure components are estimated using commodity-flow relationships from the revised 1997 benchmark I-O accounts.

Balancing the use table. The use table is balanced with a biproportional adjustment procedure--that is, with a procedure that sequentially adjusts rows and columns to equal a set of predetermined control totals. In a series of iterations, the adjustments are made (1) until the use of commodities by industries, PCE, private fixed investment, and government consumption and investment equals the domestic supply of commodities, (2) until the sum of value added by industry and intermediate inputs by industry equals gross output by industry, and (3) until the sum of the commodity composition of PCE, private fixed investment, and government consumption and investment equals the levels for expenditure components in the NIPAs.

After the results have been reviewed and verified, the annual I-O accounts for 1998-2002 are finalized. The measures of gross output, intermediate inputs, and value added by industry are then incorporated into the GDP-by-industry accounts.

Price and quantity indexes for the GDP-by-industry accounts

Preparing price and quantity indexes for the GDP-by-industry accounts for 1998-2002 requires completing two tasks. First, price and quantity indexes for gross output and intermediate inputs by industry are prepared. Second, information on gross output and intermediate inputs by industry are combined using the double-deflation procedure to derive price and quantity indexes for value added by industry.

Indexes for gross output and intermediate inputs by industry. Price and quantity indexes for gross output by industry are derived by separately deflating each commodity produced by an industry and included as part of its gross output. This information is obtained from annual I-O make tables. Price and quantity indexes for intermediate inputs are derived by deflating the commodities that compose an industry's intermediate inputs in the annual I-O use tables. The data sources used to prepare the commodity price indexes for deflation are shown in table D. When a commodity price index is based on more than one detailed price index, a Fisher index-number formula is used to prepare the composite index. The technical note "Computing Chain-Type Price and Quantity Indexes in the GDP-by-Industry Accounts" shows the Fisher index-number formulas that are used to prepare the price and quantity indexes for gross output and intermediate inputs by industry.

Indexes for value added by industry. Price and quantity indexes for value added by industry are calculated using the double-deflation method. In the double-deflation method, the separate estimates of gross output and intermediate inputs by industry are combined in a Fisher index-number formula in order to generate price and quantity indexes for value added by industry. This method is preferred for computing price and quantity indexes for value added by industry because it requires the fewest assumptions about the relationships among gross output by industry and intermediate inputs by industry.

Technical Note Computing Chain-Type Price and Quantity Indexes in the GDP-by-Industry Accounts

The computation of the chain-type Fisher price and quantity indexes for gross output, intermediate inputs, and value added for an industry or an aggregate is summarized below.

Chain-type price indexes. In the notation, L[P.sub.t-1, t] refers to the Laspeyres price relative for the years t-1 and t, P[P.sub.t-1, t] refers to the Paasche price relative, F[P.sub.t-1, t] refers to the Fisher price relative, and C[P.sub.t] refers to the Fisher chain-type price index. The superscript GO refers to gross output, II refers to intermediate inputs, and VA refers to value added; p refers to detailed prices, and q refers to quantities.

Laspeyres price relatives for gross output, intermediate inputs, and value added, respectively, are

L[P.sup.GO.sub.t-1, t] = [summation][p.sup.GO.sub.t] [q.sup.GO.sub.t-1, t]/[summation] [p.sup.GO.sub.t-1] [q.sup.GO.sub.t-1], [P.sup.II.sub.t-1, t] = [summation] [p.sup.II.sub.t] [q.sup.II.sub.t-1]/[summation] [p.sup.II.sub.t-1] [q.sup.II.sub.t-1], and L[P.sup.VA.sub.t-1, t] ([summaion] [p.sup.GO.sub.t] [q.sup.GO.sub.t-1]) - ([summation] [p.sup.II.sub.t] [q.sup.II.sub.t-1])/([summation] [p.sup.GO.sub.t] [q.sup.GO.sub.t-1]) - ([summation] [p.sup.II.sub.t-1] [q.sup.II.sub.t-1])

Paasche price relatives for gross output, intermediate inputs, and value added are

P[P.sup.GO.sub.t-1, t] = [summation] [p.sup.GO.sub.t] [q.sup.GO.sub.t]/[summation] [P.sup.GO.sub.t-1] [q.sup.GO.sub.t] P[P.sup.II.sub.t-1, t] = [summation] [P.sup.II.sub.t] [q.sup.II.sub.t]/[P.sup.II.sub.t-1] [q.sup.II.sub.t], and P[P.sup.VA.sub.t-1, t] = ([summation][p.sup.GO.sub.t] [q.sup.GO.sub.t]) - ([summation] [P.sup.II.sub.t] [q.sup.II.sub.t])/([summation] [P.sup.GO.sub.t-1] [q.sup.GO.sub.t]) - ([summation] [P.sup.II.sub.t-1] [q.sup.II.sub.t]).

Fisher price relatives for gross output, intermediate inputs, and value added are

F[P.sup.GO.sub.t-1, t] = [square root of L[P.sup.GO.sub.t-1, t] x P[P.sup.GO.sub.t-1, t]], F[P.sup.II.sub.t-1, t] = [square root of L[P.sup.II.sub.t-1, t] x P[P.sup.II.sub.t-1, t]], and F[P.sup.VA.sub.t-1, t] = [square root of L[P.sup.VA.sub.t-1, t] x P[P.sup.VA.sub.t-1, t]].

Fisher chain-type price indexes for gross output, intermediate inputs, and value added for years after the reference year are

C[P.sup.GO.sub.t] = C[P.sup.GO.sub.t-1] x F[P.sup.GO.sub.t-1, t], C[P.sup.II.sub.t] = C[P.sup.II.sub.t-1] x F[P.sup.II.sub.t-1, t], and C[P.sup.VA.sub.t] = C[P.sup.VA.sub.t-1] x F[P.sup.VA.sub.t-1, t].

In the reference year (2000 for this comprehensive revision),

C[P.sup.GO.sub.t-1] = [P.sup.II.sub.t] = [P.sup.VA.sub.t] = 100.

Chain-type quantity indexes. In the notation, L[Q.sub.t-1, t] refers to the Laspeyres quantity relative for the years t-1 and t, F[Q.sub.t-1, t] refers to the Paasche quantity relative, F[Q.sub.t-1, t] refers to the Fisher quantity relative, and C[Q.sub.t] refers to the Fisher chain-type quantity index. The superscript GO refers to gross output, II refers to intermediate inputs, and VA refers to value added; p refers to detailed prices, and q refers to quantities.

Laspeyres quantity relatives for gross output, intermediate inputs, and value added, respectively, are

L[Q.sub.GO.sub.t-1, t] = [summation] [p.sup.GO.sub.t-1] [q.sup.GO.sub.t]/[summation] [p.sup.GO.sub.t-1] [q.sup.GO.sub.t-1] L[Q.sub.II.sub.t-1, t] = [summation] [p.sup.II.sub.t-1] [q.sup.II.sub.t]/[summation] [p.sup.II.sub.t-1] [q.sup.II.sub.t-1] L[Q.sub.GO.sub.t-1, t] = ([summation] [p.sup.GO.sub.t-1] [q.sup.GO.sub.t]) - ([summation] [p.sup.II.sub.t-1] [q.sup.II.sub.t])/([summation] [p.sup.GO.sub.t-1] [q.sup.II.sub.t-1]).

Paasche quantity relatives for gross output, intermediate inputs, and value added are

P[Q.sub.GO.sub.t-1, t] = [summation] [p.sup.GO.sub.t] [q.sup.GO.sub.t]/[summation] [p.sup.GO.sub.t] [q.sup.GO.sub.t-1], P[Q.sub.II.sub.t-1, t] = [summation] [p.sup.II.sub.t] [q.sup.II.sub.t]/[summation] [p.sup.II.sub.t] [q.sup.II.sub.t-1], and P[Q.sub.VA.sub.t-1, t] = ([summation] [p.sup.GO.sub.t] [q.sup.GO.sub.t]) - ([p.sup.II.sub.t] [q.sup.II.sub.t])/([summation] [p.sup.GO.sub.t] [q.sup.GO.sub.t-1]) - ([summation] [p.sup.II.sub.t] [q.sup.II.sub.t-1]).

Fisher quantity relatives for gross output, intermediate inputs, and value added are

F[Q.sup.GO.sub.t - 1, t] = [square root of L[Q.sup.GO.sub.t - 1, t]] x P[Q.sup.GO.sub.t - 1, t], F[Q.sup.II.sub.t - 1, t] = [square root of L[II.sup.GO.sub.t - 1, t]] x P[Q.sup.II.sub.t - 1, t], and F[Q.sup.VA.sub.t - 1, t] = [square root of L[Q.sup.VA.sub.t - 1, t]] x P[Q.sup.VA.sub.t - 1, t].

Fisher chain-type quantity indexes for gross output, intermediate inputs, and value added for years after the reference year are

C[Q.sup.GO.sub.t] = C[Q.sup.GO.sub.t - 1] x F[Q.sup.GO.sub.t - 1, t], C[Q.sup.II.sub.t] = C[Q.sup.II.sub.t - 1] x F[Q.sup.II.sub.t - 1, t], and C[Q.sup.VA.sub.t] = C[Q.sup.VA.sub.t - 1] x F[Q.sup.VA.sub.t - 1, t].

In the reference year (2000 for this comprehensive revision),

C[Q.sup.GO.sub.t] = C[Q.sup.II.sub.t] = C[Q.sup.VA.sub.t] = 100.

(15.) The direct requirements coefficient is the amount of a commodity required by the industry to produce a dollar of the industry's output.

(16.) The basic price is the price received by the producer for goods that are sold; it excludes the taxes collected by the producer from purchasers as well as transportation costs and trade margins.

Chart 1. Use Table: Commodities Used by Industries and Final Uses

 Agriculture,
 forestry,
 fishing, and
 hunting Mining Utilities

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /l/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total
 Total Industry Output

 Construc- Manufac- Wholesale
 tion turing trade

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /l/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total

Total Industry Output

 Trans-
 portation
 and
 Retail ware- Informa-
 trade housing tion

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /l/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total
 Total Industry Output

 Real Profe-
 estate ssional,
 and scienti-
 Finance rental fic, and
 and and technical
 insurance leasing services

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /l/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total

Total Industry Output

 Manage- Adminis-
 ment of trative
 companies and waste
 and manage- Educa-
 enter- ment tional
 prises services services

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /l/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total

Total Industry Output

 Health Arts,
 care and enter- Accomo-
 social tainment, dation
 assis- and re- and food
 tance creation services

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /l/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total

Total Industry Output

 Other
 services,
 except Total,
 govern- Govern- interme-
 ment ment diate use

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /l/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total

Total Industry Output

 Final Uses

 Personal
 consump- Private Change in
 tion fixed business
 espendi- invest- invento-
 tures ment ries

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /1/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total
 Total Industry Output

 Industries

 Govern-
 ment con-
 sumption
 expendi-
 Exports Imports tures
 of goods of goods and gross
 and and invest-
 services services ment

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /1/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total
 Total Industry Output

 Industries

 Total
 Commodity
 GDP Output

Commo- Agriculture, forestry,
dities fishing, and hunting
 Mining
 Utilities
 Construction
 Manufactured products
 Wholesale trade
 Retail trade
 Transportation and
 warehousing
 Information
 Finance and insurance
 Real estate and rental
 and leasing
 Professional, scientific,
 and technical services
 Management of
 companies and
 enterprises
 Administrative and
 waste management
 services
 Educational services
 Health care and social
 assistance
 Arts, entertainment, and
 recreation
 Accomodation and
 food services
 Other services, except
 government
 Government
 Other inputs /1/
 Total intermediate inputs

Value Compensation of
Added employees
 Taxes on production and
 imports, less subsidies
 Gross operating surplus
 Total
 Total Industry Output

(1.) Includes noncomparable imports, scrap, used goods, inventory
valuation adjustment, and rest-of-the-world adjustment.

GDP Gross domestic product

U.S. Bureau of Economic Analysis

Table A. Industries and Commodities in the Integrated Accounts

 1997 NAICS industries 1997 NAICS codes

All industries
 Private industries
 Agriculture, forestry, fishing, and
 hunting 11
 Farms 111, 112
 Forestry, fishing, and related
 activities 113, 114, 115
 Mining 21
 Oil and gas extraction 211
 Mining, except oil and gas 212
 Support activities for mining 213
 Utilities 22
 Construction 23
 Manufacturing 313, 233
 Durable goods 33, 321, 327
 Wood products 321
 Nonmetallic mineral products 327
 Primary metals 331
 Fabricated metal products 332
 Machinery 333
 Computer and electronic products 334
 Electrical equipment, appliances,
 and components 335
 Motor vehicles, bodies and
 trailers, and parts 3361, 3362, 3363
 Other transportation equipment 3364, 3365, 3366, 3369
 Furniture and related products 337
 Miscellaneous manufacturing 339
 Nondurable goods 31, 32 (except 321 and 327)
 Food and beverage and tobacco
 products 311, 312
 Textile mills and textile product
 mills 313, 314
 Apparel and leather and allied
 products 315, 316
 Paper products 322
 Printing and related support
 activities 323
 Petroleum and coal products 324
 Chemical products 325
 Plastics and rubber products 326
 Wholesale trade 42
 Retail trade 44, 45
 Transportation and warehousing 48, 49
 Air transportation 481
 Rail transportation 482
 Water transportation 483
 Truck transportation 484
 Transit and ground passenger
 transportation 485
 Pipeline transportation 486
 Other transportation and support
 activities 487, 488, 492
 Warehousing and storage 493
 Information 51
 Publishing industries (includes
 software) 511
 Motion picture and sound recording
 industries 512
 Broadcasting and telecommunications 513
 Information and data processing
 services 514
 Finance and insurance 52
 Federal Reserve banks, credit
 intermediation, and related
 activities 521, 522
 Securities, commodity contracts,
 and investments 523
 Insurance carriers and related
 activities 524
 Funds, trusts, and other financial
 vehicles 525
 Real estate and rental and leasing 53
 Real estate 531
 Rental and leasing services and
 lessors of intangible assets 532, 533
 Professional, scientific, and
 technical services 54
 Legal services 5411
 Computer systems design and related
 services 5415
 Miscellaneous professional,
 scientific, and technical
 services 5412-5414, 5416-5419
 Management of companies and
 enterprises 55
 Administrative and waste management
 services 56
 Administrative and support services 561
 Waste management and remediation
 services 562
 Educational services 61
 Health care and social assistance 62
 Ambulatory health care services 621
 Hospitals and nursing and
 residential care facilities 622, 623
 Social assistance 624
 Arts, entertainment, and recreation 71
 Performing arts, spectator sports,
 museums, and related activities 711, 712
 Amusements, gambling, and
 recreation industries 713
 Accommodation and food services 72
 Accommodation 721
 Food services and drinking places 722
 Other services, except government 81
 Government 92
 Federal n.a.
 General government n.a.
 Government enterprises n.a.
 State and local n.a.
 General government n.a.
 Government enterprises n.a.

n.a. Not applicable.

Table B. NIPA Changes Incorporated into the 1997 Benchmark
Input-Output (I-0) Accounts

 NIPA changes (1) I-O components affected

Recognize the implicit services Industry and commodity gross
 provided by property and output for insurance carriers
 casualty insurance companies and and related activities;
 provide a more appropriate intermediate inputs and gross
 treatment of insured losses. operating surplus for all
 industries; final uses.
Allocate a portion of the implicit Industry and commodity gross
 services of commercial banks to output for Federal Reserve
 borrowers. banks, credit intermediation and
 related activities; intermediate
 inputs and gross operating
 surplus for all industries;
 final uses.
Redefine change in private farm Intermediate inputs and gross
 inventories to include farm operating surplus for the farms
 materials and supplies. industry; change in private
 inventories.
Reclassify Indian tribal Gross output, intermediate inputs,
 government activities from the and value added for the
 private sector to the state and amusements, gambling, and
 local government sector. recreation; accommodation; and
 state and local government
 enterprises industries; state
 and local general government.
Reclassify military grants-in-kind Federal general government;
 as exports. exports.
Recognize explicitly the services Gross output and intermediate
 produced by general government inputs for the state and local
 and treat government purchases general government and Federal
 of goods and services as general government industries.
 intermediate inputs.
Reclassify business nontax Taxes on production and imports,
 liability as current transfer less subsidies and gross
 payments to government and as operating surplus for all
 rent and royalties to industries; gross output for the
 government. rental and leasing services and
 lessors of intangible assets
 industry; purchases of the
 rental and leasing services and
 lessors of intangible assets
 commodity by selected
 industries.

(1.) For details, see Brent R. Moulton and Eugene P. Seskin, "Preview
of the 2003 Comprehensive Revision of the National Income and Product
Accounts: Changes in Definitions and Classifications," SURVEY OF
CURRENT BUSINESS 83 (June 2003):20.

NIPA National income and product account

Table C. Principal Source Data for Value-Added Extrapolators

 Component of gross
 domestic income Major source data

Compensation of employees,
 paid
 Wage and salary
 accruals (1) BLS tabulations of wages and salaries of
 employees covered by state UI programs
 and OPM data on wages and salaries of
 Federal Government employees.
 Supplements to wages and
 salaries
 Employer contributions
 for employee pension
 and insurance funds DOL tabulations of IRS data (Form 5500)
 on pension plans, HHS data from the
 Medical Expenditure Panel Survey on
 health insurance, and trade association
 data for other types.
 Employer contributions
 for government social
 insurance Federal budget data.
Taxes on production and
 imports, less subsidies
 Taxes on production and
 imports Federal budget data and Census Bureau
 data on state and local governments.

 Subsidies Federal budget data and Census Bureau
 data on state and local governments.

Gross operating surplus
 Private enterprises
 Net interest and
 miscellaneous
 payments, domestic
 industries
 Corporate IRS tabulations of data from corporate
 tax returns (Form 1120 series), FFIEC
 Call Report data on commercial banks,
 trade association data on life
 insurance companies.
 Noncorporate IRS tabulations of tax return data from
 sole proprietorships (Form 1040
 Schedule C) and partnerships (Form
 1065), FRB flow-of-funds-account data
 on residential mortgages.
 Business current
 transfer payments
 (net) IRS tabulations of data from corporate
 tax returns (Form 1120 series), trade
 association data for property-casualty
 insurance net settlements and for other
 types.
 Proprietors' income
 with IVA and without
 CCAdj
 Farm USDA farm income statistics.
 Nonfarm
 Proprietors' income
 without IVA and
 CCAdj IRS tabulations of tax return data from
 sole proprietorships (Form 1040
 Schedule C) and partnerships (Form
 1065).
 IVA BLS prices and IRS inventory data.
 Rental income of
 persons without CCAdj Census Bureau data on housing units and
 rents from the American Housing Survey,
 HMDA data on residential mortgages,
 and IRS tabulations of data from
 individual tax returns (Form 1040).
 Corporate profits
 before tax with IVA
 and without CCAdj,
 domestic industries
 Corporate profits
 before tax without
 IVA and CCAdj IRS tabulations of data from corporate
 tax returns (Form 1120 series) and
 regulatory agencies and public
 financial reports data.
 IVA BLS prices and IRS inventory data.
 Capital consumption
 allowances
 Corporate IRS tabulations of data from corporate
 tax returns (Form 1120 series).

 Noncorporate IRS tabulations of tax return data from
 sole proprietorships (Form 1040
 Schedule C) and partnerships (Form
 1065).
 Current surplus of
 government enterprises Federal budget data and Census Bureau
 data on state and local governments.
 Consumption of fixed
 capital
 Households and
 institutions' BEA capital stock estimates.
 Government BEA capital stock estimates.

 Industrial distribution

 Data or assumption
 used if distribution
 Component of gross Distribution by establishment is
 domestic income available in not available in
 source data source data
Compensation of employees,
 paid
 Wage and salary
 accruals (1) Establishment.
 Supplements to wages and
 salaries
 Employer contributions
 for employee pension
 and insurance funds None. (2) BLS employer cost index
 and UI tabulations.
 Employer contributions
 for government social
 insurance None. Social Security
Taxes on production and Administration and
 imports, less subsidies BLS tabulations.
 Taxes on production and
 imports None. Property taxes are
 based on BEA capital
 stock distribution.
 Subsidies None. Payments are assigned
 to the industries
 being supported.
Gross operating surplus
 Private enterprises
 Net interest and
 miscellaneous
 payments, domestic
 industries
 Corporate Company. Census Bureau
 company-establishment
 employment matrix.
 Noncorporate Company. Assumed to be
 equivalent to an
 establishment
 distribution.
 Business current
 transfer payments
 (net) Company. Industry-specific
 payments are assigned
 to those industries;
 others are based on
 IRS company industry
 distribution.
 Proprietors' income
 with IVA and without
 CCAdj
 Farm Establishment.
 Nonfarm
 Proprietors' income
 without IVA and
 CCAdj Company. Assumed to be
 equivalent to an
 establishment
 distribution.
 IVA Establishment.
 Rental income of Establishment.
 persons without CCAdj
 Corporate profits
 before tax with IVA
 and without CCAdj,
 domestic industries
 Corporate profits
 before tax without
 IVA and CCAdj Company. Census Bureau
 company-establishment
 employment matrix.
 IVA Establishment.
 Capital consumption
 allowances
 Corporate Company. Census Bureau
 company-establishment
 employment matrix.
 Noncorporate Company. Assumed to be
 equivalent to an
 establishment
 distribution.
 Current surplus of
 government enterprises Establishment.
 Consumption of fixed
 capital
 Households and
 institutions' Establishment.
 Government Type of agency.

(1.) Includes wage and salary disbursements to the rest of the world
and excludes wages and salaries received from the rest of the world.

(2.) A company-based industrial distribution for pension plans is
available in the source data.

(3.) Consists of owner-occupied housing and nonprofit institutions
primarily serving households.

BEA Bureau of Economic Analysis

BLS Bureau of Labor Statistics

CCAdj Capital consumption adjustment

DOL Department of Labor

FFIEC Federal Financial Institutions Examination Council

FRB Federal Reserve Board of Governors

HCFA Health Care Financing Administration

HHS Department of Health and Human Services

HMDA Home Mortgage Disclosure Act

IRS Internal Revenue Service

IVA Inventory valuation adjustment

OPM Office of Personnel Management

UI Unemployment insurance

USDA U.S. Department of Agriculture

Table D. Principal Sources of Data for Industry and Commodity Output
and Prices

 Industry and commodity Source data for extrapolator

Agriculture, forestry, fishing and
 hunting
 Farms USDA cash receipts from marketing
 and inventory change
 Forestry, fishing, and related For forestry Census Bureau
 activities shipments; for fishing, NOAH
 value of fish landings; for
 related activities, NIPA
 estimates
Mining
 Oil and gas extraction DOE quantity produced and prices
 Mining, except oil and gas DOE quantity produced and average
 price for uranium and coal; USGS
 quantity and price data for all
 others
 Support activities for mining DOE, USGS, and trade sources for
 quantity produced and prices
Utilities
 Electric utilities EIA
 Natural gas EIA quantity and price data
 Water, sewage, and other systems PCE
Construction
 For the Department of Defense DOD expenditures data
 (DOD)
 For state and local highways Census Bureau data from the ASGF
 For private electric and gas Federal regulatory agencies and
 utilities trade sources expenditures data
 For farms, excluding residential USDA expenditures data
 For other nonresidential Census Bureau data on value of
 construction put in place
 For other residential Census Bureau data on value of
 construction put in place
Manufacturing Census Bureau data on shipments
 and inventory change
Wholesale trade Census Bureau ATS data
Retail trade Census Bureau ARTS data
Transportation and warehousing
 Air transportation BTS Air Carrier Financial
 Statistics
 Rail transportation Amtrak and trade sources
 Water transportation Army Corps of Engineers; trade
 sources
 Truck transportation Census Bureau SAS
 Transit and ground passenger PCE; BTS
 transportation
 Pipeline transportation Trade sources
 Other transportation and support PCE
 activities
 Warehousing and storage Census Bureau SAS
Information
 Publishing industries (includes Census Bureau SAS
 software)
 Motion picture and sound Census Bureau SAS
 recording industries
 Broadcasting and Census Bureau SAS
 telecommunications
 Information and data processing Census Bureau SAS
 services
Finance and insurance
 Federal Reserve banks, credit FDIC; FRB; NIPA imputed service
 intermediation, and related charges; NCUA; and other private
 activities agencies
 Securities, commodity contracts, SEC FOCUS Report
 and investments
 Insurance carriers and related Trade sources for insurance
 activities carriers; BEA estimates for
 property and casualty insurance;
 for all other insurance, PCE;
 for insurance agents, brokers,
 and services, IRS tabulations of
 business tax returns
 Funds, trusts, and other NIPA imputed service charges for
 financial vehicles other financial institutions;
 EBSA data on pension funds
Real estate and rental and leasing
 Real estate For residential dwellings and real
 estate agents and managers, NIPA
 housing data; for nonresidential
 dwellings, IRS tabulations of
 business tax returns; NIPA
 rental value of buildings owned
 by nonprofits
 Rental and leasing services and For rental and leasing services,
 lessors of intangible assets Census Bureau SAS; for
 royalties, IRS tabulations of
 business tax returns
Professional, scientific, and
 technical services
 Legal services Census Bureau SAS
 Computer systems design and Census Bureau SAS
 related services
 Miscellaneous professional, Census Bureau SAS
 scientific, and technical
 services
Management of companies and BLS wages and salaries
 enterprises
Administrative and waste management
 services
 Administrative and support Census Bureau SAS
 services
 Waste management and remediation Census Bureau SAS
 services
Educational services PCE
Health care and social assistance
 Ambulatory health care services Census Bureau SAS
 Hospitals and nursing and Census Bureau SAS
 residential care facilities
 Social assistance Census Bureau SAS
Arts, entertainment, and recreation
 Performing arts, spectator Census Bureau SAS
 sports, museums, and related
 activities
 Amusements, gambling, and Census Bureau SAS
 recreation industries
Accommodation and food services
 Accommodation Census Bureau ARTS
 Food services and drinking Census Bureau ARTS
 places
Other services, except government For religious, labor, and
 political organizations, PCE;
 for other services, Census
 Bureau SAS; for private
 households, BEA compensation of
 employees
Government
 Federal
 General government NIPA estimates
 Government enterprises USPS receipts; for electric
 utilities, DOE; other government
 data
 State and local
 General government NIPA estimates
 Government enterprises For electric utilities, DOE data;
 for other enterprises, BEA data
 on revenue by type

 Industry and commodity Source data for price index

Agriculture, forestry, fishing and
 hunting
 Farms USDA prices received by farmers;
 PPI.
 Forestry, fishing, and related PPI; NOAA; NIPA deflator.
 activities
Mining
 Oil and gas extraction For crude petroleum and natural
 gas, IPD from DOE; for natural
 gas liquids, PPI.
 Mining, except oil and gas IPD from DOE and USGS.
 Support activities for mining IPD from DOE, USGS and trade
 sources; for exploration, PPI.
Utilities
 Electric utilities PPI.
 Natural gas PPI.
 Water, sewage, and other systems CPI.
Construction
 For the Department of Defense DOD prices for military
 (DOD) construction; cost indexes from
 trade sources and government
 agencies for other construction.
 For state and local highways Cost indexes from government
 agencies.
 For private electric and gas Cost indexes from trade sources
 utilities and government agencies.
 For farms, excluding residential Trade sources cost index; Census
 Bureau price deflator for new
 single-family houses under
 construction.
 For other nonresidential Trade sources and government
 agency cost indexes; Census
 Bureau price index for new
 single-family houses under
 construction; BEA
 quality-adjusted price indexes
 for factories, office buildings,
 warehouses, and schools.
 For other residential Census Bureau price index for new
 single-family houses under
 construction; BEA price index
 for multifamily construction.
Manufacturing PPI; quality adjusted price
 indexes for computers,
 photocopying equipment, digital
 telephone switching equipment,
 and LAN equipment; BEA price
 indexes based on DOD prices paid
 for military equipment.
Wholesale trade Sales price by kind-of-business
 computed from PPI.
Retail trade Sales price by kind-of-business
 computed from CPI.
Transportation and warehousing
 Air transportation IPD for total passenger-related
 revenues and passenger miles
 from DOT; IPD for total
 freight-, mail-, and
 express-related revenues and ton
 miles from DOT; wages and
 salaries per employee from BLS.
 Rail transportation PPI.
 Water transportation PPI for freight; for passengers,
 CPI.
 Truck transportation PPI.
 Transit and ground passenger For taxicabs, intercity buses, and
 transportation other local transit, PCE price
 index; for school buses, BLS
 data on wages and salaries per
 employee.
 Pipeline transportation PPI.
 Other transportation and support For sightseeing, PCE price index;
 activities for other transportation and
 support activities, PCE price
 indexes and PPI.
 Warehousing and storage PPI.
Information
 Publishing industries (includes BEA price indexes for prepackaged
 software) and custom software for software
 publishers; for all other
 publishing industries, PPI.
 Motion picture and sound PCE price indexes.
 recording industries
 Broadcasting and For cable networks, programming,
 telecommunications and telecommunications, PPI; for
 radio and television
 broadcasting, network receipts,
 and all other
 telecommunications, composite
 price index of PPIs.
 Information and data processing For information services, PCE
 services price indexes; for data
 processing services, PPI.
Finance and insurance
 Federal Reserve banks, credit PCE price indexes; other
 intermediation, and related government data.
 activities
 Securities, commodity contracts, PCE price indexes.
 and investments
 Insurance carriers and related For health and life insurance, PCE
 activities price indexes; for property and
 casualty insurance, PPI; for
 agents, brokers, and services,
 composite price index based on
 trade sources data and PCE price
 indexes.
 Funds, trusts, and other IPD from NIPA imputed service
 financial vehicles charges; composite price index
 based on PCE price indexes; PPI
 data; BLS data on wages and
Real estate and rental and leasing salaries per full-time employee.
 Real estate For nonfarm residential dwellings,
 NIPA price index; for
 nonresidential dwellings, PPI;
 for real estate managers and
 agents, PPI and trade sources;
 IPD for nonprofit and farm
 residential dwellings.
 Rental and leasing services and For automotive equipment rental,
 lessors of intangible assets PPI; for other rental services,
 PCE price indexes; for
 royalties, PCE price index and
 IPD from DOE and PPI.
Professional, scientific, and
 technical services
 Legal services PPI.
 Computer systems design and BEA price indexes for prepackaged
 related services and custom software.
 Miscellaneous professional, PPI; BLS wages and salaries per
 scientific, and technical full-time employee.
 services
Management of companies and BLS wages and salaries per
 enterprises full-time employee.
Administrative and waste management
 services
 Administrative and support BLS wages and salaries per
 services full-time employee; PCE price
 indexes; PPI.
 Waste management and remediation CPI.
 services
Educational services PCE price index based on trade
 sources.
Health care and social assistance
 Ambulatory health care services PPI; PCE price indexes.
 Hospitals and nursing and PCE price indexes.
 residential care facilities
 Social assistance PCE price indexes.
Arts, entertainment, and recreation
 Performing arts, spectator PCE price indexes.
 sports, museums, and related
 activities
 Amusements, gambling, and PCE price indexes.
 recreation industries
Accommodation and food services
 Accommodation For hotels and motels, PPI; PCE
 price index.
 Food services and drinking CPI.
 places
Other services, except government CPI; BLS data on wages and
 salaries per full-time employee;
 PCE price indexes.
Government
 Federal
 General government NIPA price indexes.
 Government enterprises For USPS and electric utilities,
 PPI; for all others, PCE price
 index and NIPA price indexes.
 State and local
 General government NIPA price indexes.
 Government enterprises PPI.

ARTS Annual Retail Trade Survey, Census Bureau

ASGF Annual Survey of Government Finances, Census Bureau

ATS Annual Trade Survey, Census Bureau

BEA Bureau of Economic Analysis

BLS Bureau of Labor Statistics

BTS Bureau of Transportation Statistics

CPI Consumer Price Index, BLSDOC Department of Commerce

DOD Department of Defense

DOE Department of Energy

DOT Department of Transportation

EBSA Employee Benefits Security Administration

EIA Energy Information Administration

FDIC Federal Deposit Insurance Corporation

FOCUS Financial and Operational Combined Uniform Single Report, SEC

FRB Federal Reserve Board of Governors

IPD Implicit price deflator

IRS Internal Revenue Service

NCUA National Credit Union Association

NIPA National income and product accounts, BEA

NOAA National Oceanic and Atmospheric Administration

PCE Personal consumption, BEA

PPI Producer expenditures, Price Index, BLS

SAS Service Annual Survey

SEC Securities and Exchange Commission

USDA U.S. Department of Agriculture

USGS U.S. Geological Survey, Office of Minerals

USPS U.S. Postal Service

(1.) For a discussion on integrating the industry accounts, see Robert E. Yuskavage, "Priorities for Industry Accounts at BEA" (paper presented at the meeting of the BEA Advisory Committee, Washington, DC, November 17, 2000). The paper is available at BEA's Web site <www.bea.gov>.

(2.) In addition, it is BEA's long-run goal to integrate the industry accounts and NIPAs with related regional accounts, namely gross state product (GSP) by industry and regional I-O multiplier estimates. Consistency between the annual I-O accounts and the GDP-by-industry accounts will improve the quality of the GSP accounts, and any increase in timeliness of the GDP-by-industry estimates will be reflected in more speedy delivery of the GSP estimates. Consistent and better measures of value added would also potentially strengthen the links between the GSP accounts and the regional I-O multiplier estimates.

(3.) The June release of the comprehensive revision will not include accelerated annual I-O accounts for 2003.

(4.) For more information, see Ann M. Lawson, Kurt S. Bersani, Mahnaz Fahim-Nader, and Jiemin Guo, "Benchmark Input-Output Accounts of the United States, 1997," SURVEY OF CURRENT BUSINESS 82 (December 2002): 19-109.

(5.) For more information, see Mark A. Planting and Peter D. Kuhbach, "Annual Input-Output Accounts of the U.S. Economy, 1998," SURVEY 81 (December 2001): 41-70.

(6.) BEA is beginning research to explore the feasibility of preparing real (inflation-adjusted) I-O accounts.

(7.) Previously, these costs and incomes were classified as either compensation of employees, property-type income, or indirect business tax and nontax liability. These new classifications are consistent with the aggregations introduced as part of the comprehensive NIPA revision; see Brent R. Moulton and Eugene P. Seskin, "Preview of the 2003 Comprehensive Revision of the National Income and Product Accounts: Changes in Definitions and Classifications," SURVEY 83 (June 2003): 17-34. Specifically, all the nontax liabilities except special assessments are removed from indirect business tax and nontax liability, and the remainder of this category is renamed taxes on production and imports; the nontax liabilities except special assessments are added to property-type income; subsidies are removed from property-type income, and the remainder of this category is renamed gross operating surplus; and subsidies are netted against the value of taxes on production and imports.

(8.) For more information, see Sherlene K.S. Lum, Brian C. Moyer, and Robert E. Yuskavage, "Improved Estimates of Gross Product by Industry for 1947-98," SURVEY 80 (June 2000): 24-54.

(9.) Proprietors' income is defined here to equal the sum of NIPA estimates for proprietors' income without inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj), proprietors' net interest, proprietors' capital consumption allowance, and proprietors' IVA. The NIPA adjustment to nonfarm proprietors' income without IVA and CCAdj for misreporting on income tax returns will be shown in NIPA table 7.14 "Relation of Nonfarm Proprietors' Income in the National Income and Product Accounts to Corresponding Measures as Published by the Internal Revenue Service."

(10.) The Bureau of the Census has recently undertaken initiatives to improve the coverage of intermediate inputs by industry in several of its annual surveys. For example, the Annual Survey of Manufactures has expanded its coverage to include purchased services by industry and the Service Annual Survey has initiated the collection of information on expenses by industry.

(11.) Table A omits the statistical discrepancy that has traditionally appeared as an industry in the GDP-by-industry accounts. This omission in the integrated accounts reflects the use of a balanced framework in which the statistical discrepancy is implicitly spread among industries. In addition, table A does not include an industry for the IVA, which has traditionally been shown in the I-O accounts. The IVA is included as a secondary product in industry gross output and as a separate commodity in final uses.

(12.) The GDP-by-industry value added that is based on the NIPA GDI estimates will also incorporate the results from the 2003 comprehensive NIPA revision.

(13.) The estimates of "compensation of employees" and "taxes on production and imports, less subsidies" in the revised 1997 benchmark I-O accounts are consistent with those published in the NIPAs. For census-covered industries, the compensation in the previously published 1997 benchmark I-O accounts was based on the 1997 Economic Census. See Lawson, et al., 31.

(14.) The estimates are prepared at this level of detail because the industry distributions of GDI are available at this level. These estimates are allocated to more detailed industries when the revised benchmark I-O table is balanced. Source data for 1997 were not available on a 1997 NAICS basis for all of the components of GDI. For selected components, BEA converted data from the 1987 Standard Industrial Classification basis to the 1997 NAICS basis. *****