The OECD InputOutput database and SupplyUse Tables in SNA 1993 Rev 1 OECDNBS Workshop on National Ac

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The OECD Input-Output database and Supply-Use
Tables in SNA 1993 Rev 1 OECD-NBS Workshop on
National Accounts September 25-28, 2007, Beijing

• Contact nadim.ahmad_at_oecd.org

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OECD Input-Output Database

• History
• 2006 Edition
• Creating Symmetric Tables
• Data Sources
• Why Industry by Industry?
• Dissemination

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History

• 1995 Edition
• 10 countries
• SNA68
• ISIC Rev 2
• 36 sectors
• Up to 1990
• 2002 Edition
• 20 Countries (2 non member)
• SNA 93
• ISIC Rev 3
• 42 Sectors
• Up to 1998

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2006 Edition

• 2006 Edition
• 37 countries (9 non members)
• SNA93
• ISIC Rev 3
• 48 sectors
• Up to 2003

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2006 Edition - Country Coverage

• Country coverage corresponds to over 90 of
  global GDP (80 in 2002 Ed and 70 in 1995).
  Population coverage (66 versus 40 and 10
  respectively)

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2006 Edition - Tables
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2006 Edition Industry Coverage
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2006 Edition - Value-Added Final Demand

• VA

• FD

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Creating Symmetric Tables

• Requests for Industry by Industry (IxI)
  (preferably 48x48 at BP)
• Or Supply-Use, or Commodity by Commodity (CxC)
  and Supply, or CxC
• Conversion Steps
• S-U at purchasers prices Convert use table to
  BP.
• S-U at BP (total economy only) Convert Use
  table into separate domestic and import use
  tables
• Convert S and Domestic Use tables into IxI tables
  using Fixed Product Sales Structures
  assumption.
• Aggregate to 48x48
• CxC and Supply (reverse engineer the Use table
  and follow steps above)
• CxC - aggregate only (Japan, Korea. Chinese
  Taipei and Indonesia)
• Other e.g. FISIM, c.i.f/f.o.b

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Transforming Supply Use into Input-Output Tables

• SU tables are CxI not CxC or IxI
• So for CxC, its necessary to convert output by
  industries into output by products
• And for IxI, its necessary to convert demand by
  products into demand by industries.
• If each industry produced only one product this
  would be trivial.
• Unfortunately this is rarely the case.

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(CxC) Input-Output Tables

• Two assumptions prevail in constructing CxC
  tables, which can be used in isolation or often
  in combination
• Product technology - Each product is produced in
  its own specific way, irrespective of the
  industry where it is produced
• Industry technology - Each industry has its own
  specific way of production, irrespective of its
  product mix.

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Product technology
This illustrates one of the biggest practical
problems with the implementation of the product
technology assumption although it could of
course be used to identify problems with the
original SU balance
Agriculture produces 20 units of manufacturing
we assume the same structure as in manufacturing,
hence (minus) 80/20020-8 etc
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Industry technology
Note there are no negatives. A strength of the
industry technology assumption.
Agriculture produces 20 units of manufacturing
we assume the same structure as in agriculture,
hence zero for agricultural products and (minus)
60/15020-8 etc
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(CxC) Input-Output Tables

• A third assumption is the hybrid technology which
  uses parts of the industry and product technology
  assumptions.

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(CxC) Input-Output Tables

• These transformations can be described
  algebraically as
• Where U is the original SU IC CxI Table VA is
  the VA vector (VA by I) q, the vector of
  domestically produced products and g, the vector
  of the output of industries

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(IxI) Input-Output Tables

• Like CxC two assumptions prevail in constructing
  IxI tables
• Fixed Product Sales Structures Each product has
  its own specific sales structure, irrespective of
  the industry where its produced.
• Fixed Industry Sales Structures - Each industry
  has its own specific sales structure,
  irrespective of its product mix.

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Fixed Product Sales Structures
Agriculture produces 20 units of manufacturing
we assume that it produces 20/220 per cent of all
products and that each consumer purchases this
share of manufactured products from the
agriculture industry, so, of the 60 purchased by
agriculture 6020/220 5.5 is from the
agriculture industry.
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Fixed Industry Sales Structures
Agriculture produces 20 units of manufacturing
we assume that the shares are split equally
between consumers of agricultural products, so
80/1302012.3 goes to manufacturing,
50/130207.7 to final demand etc. This can also
result in negatives.
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(IxI) Input-Output Tables

• These transformations can be described
  algebraically as
• Where U is the original SU IC CxI Table fd is
  the final demand vector q, the vector of
  domestically produced products and g, the vector
  of the output of industries

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So why do the OECD choose Industry by Industry?

• Linkages to other OECD industrial database
• STAN, ANBERD, SDBS, IEA (emissions) etc
• Policy focus
• Structure of businesses, Entrepreneurship etc
• Statistical Quality whether CxC or IxI,
  assumptions are needed
• Information sources, typically, business
  (industry) based. IxI using Fixed Product Sales
  assumption (FPSA) preserves observed VA
  relationships. CxC does not.
• Equally the CxC assumption of heterogeneity in
  products is intrinsically linked to empirical
  facts classification systems are too aggregate
  and businesses rarely have the same cost
  structures.
• Simplicity
• IxI tables easily produced using FPSS (no
  negatives)

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Sources
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Dissemination

• http//www.oecd.org/std/io-tables/data
• 2002 Edition available now (on request) from
• 1995 Edition available on-line
• 2006 Edition release imminent
• See also Ahmad Yamano, 2006 for more
  information.

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Special Issues SNA93 Rev 1 implications

• Although the SU tables are not in themselves
  subject to change in the SNA revision, a number
  of changes in other areas will have an effect.

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Special Issues SNA93 Rev 1 implicationsAncill
ary Units

• The 1993 SNA specifies that units conducting only
  a specified list of activities designated as
  ancillary should not be treated as separate
  units but their costs should be consolidated with
  the units they serve. This means that when
  accounts for a region are compiled, head offices
  and other ancillary units located there are
  excluded if the units they serve are located
  outside the region. This results in a difference
  between ancillary units located abroad, which are
  treated as separate units, and those that are
  resident but distant from their related
  enterprises.

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Special Issues SNA93 Rev 1 implicationsAncill
ary Units

• The AEG recommended that ancillary units can be
  establishments in their own right if they satisfy
  the normal requirements of an establishment
  allocated to the main service classification
  provided by the unit.

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Special Issues SNA93 Rev 1 implicationsGoods
sent abroad for processing

• The 1993 SNA and BoP treat goods sent abroad for
  processing differently. The SNA records gross
  flows only in the case of substantial processing
  (reclassification of the good at three-digit
  CPC). The Balance of Payments Manual, as a
  practical matter, suggests a convention that all
  processing be assumed substantial and therefore
  gross flows are recorded.
• Further, the position is that when goods are sent
  abroad for processing, no change in ownership
  takes place and thus there are no actual
  transactions.
• Does the advent of globalization and the
  increasing amount of goods processed abroad
  suggest a change in practice would be
  appropriate?

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Special Issues SNA93 Rev 1 implicationsGoods
sent abroad for processing

• The AEG has decided to resolve this issue by
  never imputing a change of ownership, and, so,
  not recording gross flows. Further the AEG also
  recommended that the same approach should be used
  in dealing with goods processed domestically even
  if between related enterprises,

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Special Issues SNA93 Rev 1 implicationsMercha
nting

• Merchanting is defined in BoP as the purchase of
  a good by a resident of country A from a resident
  of country B which is then sold to a resident of
  country C, without the good entering the
  merchants economy. The SNA does not cover this
  topic.
• There is a need for a clear and precise
  definition of merchanting arising out of this
  there needs to be clear guidance on whether
  merchanting (when redefined) should be recorded
  on a net or a gross basis and under goods or
  services.

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Special Issues SNA93 Rev 1 implicationsMercha
nting

• The AEG has recommended that, the acquisition of
  goods by the merchanter should be recorded as an
  import, identified as a negative export, of the
  merchanter. The resale of these goods is then
  shown as an export with the difference in values
  (exclusive of holding gains/losses) allocated to
  wholesale/retail exports.