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U.S. Transportation Satellite Accounts for 1996

By Bingsong Fang, Xiaoli Han, Sumiye Okubo, and Ann M. Lawson

This article presents estimates of the transportation satellite accounts (TSA's) for 1996, which update the 1992 TSA's.1 Like the 1992 TSA's, the 1996 TSA's are based on, and are an extension of, the input-output (I-O) accounts; they are constructed by rearranging the I-O data and by adding information from other sources of transportation data. The TSA's were developed jointly by the Bureau of Transportation Statistics of the U.S. Department of Transportation and the Bureau of Economic Analysis.

The TSA's identify and aggregate detailed estimates on transportation activities and present the estimates by industry and by commodity. This information can provide answers to such questions as "what is the contribution of transportation to gross domestic product?"; "what industries are large users of transportation?"; and "what are the inputs required by transportation from other industries?" Using the TSA estimates is advantageous for transportation analyses be-cause transportation activities in the TSA's include those conducted on a for-hire basis, which are identified as transportation within the published I-O accounts, and those conducted by businesses for their own use (own-account transportation), which--although included--are not separately identified as transportation in the I-O accounts. Own-account transportation covers activities such as transporting goods from a grocery company's warehouses to its retail outlets by the company's truck fleet and local delivery services provided by small retailers.


The TSA's treat own-account transportation as a separate industry with gross output equal to the sum of its intermediate inputs and value-added components. Because own-account transportation activities that are included as part of the production process in the I-O accounts are treated as if they were market transactions in the TSA's, the total gross output for all industries is larger in the TSA's than that in the I-O accounts. However, the TSA estimate of own-account transportation does not change the total estimate of gross domestic product (GDP) from the I-O accounts, because the value added that is created through own-account transportation activities is already counted in the I-O estimates of industry value added, and the TSA's only reclassify this value added as transportation related.

Satellite Accounts

Satellite accounts are frameworks designed to expand the analytical capabilities of the national accounts without overburdening them or interfering with their general-purpose orientation. In this role, satellite accounts organize information in an internally consistent way that suits a particular analytical focus, yet they maintain links to the existing national accounts. Further, because they supplement the existing accounts rather than replace them, they serve as a laboratory for economic accounting in that they provide room for conceptual development and methodological refinement. In their most flexible applications, satellite accounts may use definitions and concepts that differ from the existing accounts. For example, a satellite account may be built around a broader concept of industry, output, and capital formation than the existing accounts.

Two types of satellite accounts are identified by the System of National Accounts, 1993.(1) Each type is distinguished by its relationship with the central framework. The first type involves the rearrangement of central classifications and the introduction of complementary elements that differ from the conceptual central framework. An example of this type of satellite accounts is the travel and tourism satellite accounts prepared by BEA.(2)

The second type of satellite accounts is based on concepts that are alternatives to the ones of the central framework. A different production boundary or an enlarged concept of consumption or production may be introduced, or the scope of assets may be extended. An example of this type of satellite accounts is BEA's environmental accounts, which include natural resources in the asset accounts and the use of natural resources as negative investment in the income and product accounts.(3)

1. See Commission of the European Communities, International Monetary Fund, Organisation for Economic Co-operation and Development, United Nations, and the World Bank, System of National Accounts 1993 (Brussels/Luxembourg, New York, Paris, and Washington, DC, 1993).

2. See Sumiye Okubo and Mark A. Planting, "U.S. Travel and Tourism Satellite Accounts for 1992," Survey 78 (July 1998): 8-22.

3. See "Integrated Economic and Environmental Satellite Accounts" and "Accounting for Mineral Resources: Issues and BEA's Initial Estimates, " Survey 74 (April 1994): 33-72.

Using the more comprehensive measures of transportation and the statistical framework developed for the 1992 TSA's, as well as more recent data where available, the 1996 TSA's present an updated snapshot of transportation's changing role in the U.S. economy, particularly in the business sector. From 1992 to 1996, transportation grew more slowly than the overall economy, primarily as a result of relative differences among industries in their intensity of transportation use, in their growth of gross output, and in their changes in intensity of transportation use. Highlights include the following:


Interpreting the above results requires an understanding of the decision processes used by businesses in choosing between buying for-hire transportation services or providing own-account transportation services internally. For example, a business must consider the rental cost and the purchase cost of transportation equipment, operating costs, frequency of service required, size of geographic area covered, special requirements such as refrigeration, availability of alternative means of transportation, and the compatibility between transportation operations and other business activities. Thus, aggregate estimates from the TSA's should be supplemented by more detailed industry data to achieve a better understanding of business transportation choices.


Although the TSA's provide a more comprehensive classification of transportation activities, the TSA estimates still understate the true economic importance of transportation. First, because of data limitations, own-account transportation by modes other than trucks and buses and by most government enterprises are not included.2 Second, because the current TSA framework maintains the production boundary in the I-O accounts, own-account transportation activities conducted by final users--the use of motor vehicles by households and by general government--are not included. Research on the valuation of motor vehicle services by households and by general government is currently under way, and estimates of these types of own-account transportation are being considered for future inclusion in the TSA's. Third, the estimates of own-account transportation exclude profits because information to make such estimates is not available. Thus, during a period of rising (declining) profit margins, the growth of own-account transportation tends to be understated (overstated).


The 1996 TSA's are presented in four tables: The make table shows the commodities that are produced by each industry (table 1); the use table shows the inputs to industry production and the commodities that are consumed by the final users (table 2); the direct requirements table shows the amount of a commodity that is required by an industry to produce a dollar of the industry's output (table 3); and the total requirements table shows the production that is required, directly and indirectly, from each industry to deliver a dollar of a commodity to final users (table 4). Like the 1992 TSA's, the four basic tables in the 1996 TSA's show own-account transportation as a separate industry and a separate commodity.

The rest of this article discusses the changes in the TSA estimates from 1992 to 1996 and describes the estimating method that was used to prepare the 1996 TSA's.

Changes from 1992 to 1996

From 1992 to 1996, transportation's contribution to the economy decreased slightly, primarily reflecting differences in the relative use of transportation and differences in the growth rates among sectors of the economy. This decrease is reflected in both the transportation value-added measure and in the transportation output measure. Within transportation, the contribution of own-account transportation decreased more than that of for-hire transportation, but the general distribution of these two types of transportation among using industries did not change. Table 5 provides summary data on the industry use of transportation, and table 6 shows the industry supply of transportation; these tables are the sources of information for the comparative analyses.

Slower growth in transportation.- -From 1992 to 1996, value added and gross output by transportation industries grew at a slower rate than the economy as a whole. GDP grew more than 25 percent, while the value added that was contributed to GDP by transportation industries grew 21 percent. Total gross output grew more than 27 percent, while transportation gross output grew 23 percent. The slower growth in transportation reduced transportation's share of the total economy. For example, total transportation used by business to produce each dollar of gross output declined from 3.5 percent to 3.4 percent in 1992-96, and transportation's share of total final use declined from 2.6 percent to 2.5 percent.


The slower growth in transportation can largely be attributed to relative differences among industries in their intensity of transportation use and in their growth of gross output.3 In 1992-96, the industries that were more intensive users of transportation--agriculture, mining, construction, and manufacturing--grew more slowly than the industries that were less intensive users of transportation--wholesale and retail trade; finance, insurance, and real estate (FIRE); and services (chart 1). The five slowest growing industries grew at an average rate of 22 percent in 1992-96 and required 4.0 cents of transportation per dollar of their output in 1996. Over the same period, the five fastest growing industries grew at an average rate of 31 percent and required 2.9 cents of transportation per dollar of their output in 1996.

In addition, transportation's relatively slower growth was attributable to changes in the intensity of transportation use by industries. The transportation requirement for the five fastest growing industries decreased from 3.1 cents per dollar of gross output in 1992 to 2.9 cents in 1996, while that for the five slowest growing industries remained at 4.0 cents. The reduction in transportation intensity for these industries can be attributed to changes in industry practices, changes in transportation efficiencies, and changes in the relative prices of inputs. TSA estimates and additional industry information are required for detailed analysis of the relative contribution of these factors to observed changes in transportation use.


Slower growth in own-account transportation .--Within transportation, own-account transportation grew more slowly than for-hire transportation in 1992-96. Gross output of own-account transportation increased 21 percent, while gross output of for-hire transportation increased 24 percent. Similarly, value added from own-account transportation increased 17 percent, compared with a 23-percent increase in for-hire transportation.4


Several factors contributed to the slower growth of own-account transportation. Two key factors are the relative differences in input structures and in the growth of gross output among using industries. For example, the rapidly growing FIRE industry required about half a cent of for-hire transportation for each dollar of industry gross output in 1996, but it required only one tenth as much of own-account transportation. In contrast, the more slowly growing agriculture, mining, and construction industries all required more own-account transportation per dollar of gross output. In addition, the growth of own-account transportation relative to that of for-hire transportation is probably understated, because own-account transportation of transportation industries may be growing more rapidly than that of other industries, but it is classified as for-hire in the TSA's.5Indeed, for the industries in which own-account transportation is estimated in the TSA's, the use of own-account transportation in 1992-96 grew as fast as, or faster than, the use of for-hire transportation. However, the for-hire transportation industry's intensive use of its own services caused its growth to exceed the own-account transportation's growth. In addition, other factors such as outsourcing may have shifted some of the own-account transportation operations from nontransportation industries to for-hire transportation industries.6


Small changes in industry use of transportation services .--Although industries grew at different rates from 1992 to 1996, their ranking by use of for-hire transportation services changed only slightly. The three largest users remained manufacturing ($94 billion), for-hire transportation ($82 billion), and services ($29 billion). These three industries accounted for 74 percent of all for-hire transportation used by business (chart 2).


The ranking of industries by their use of own-account transportation from the TSA's also remained relatively stable in 1992-96. The three largest users remained trade ($55 billion), services ($52 billion), and construction ($48 billion). These three industries accounted for 78 percent of all own-account transportation used by business (chart 3).


In both 1992 and 1996, the pattern of industry use of for-hire transportation differed markedly from that of own-account transportation. Manufacturing was the largest user of for-hire transportation, but it ranked fourth as a user of own-account transportation. The trade industry was the largest user of own-account transportation, but it ranked only fifth as a user of for-hire transportation.


The differences in industry usage of for-hire transportation or of own-account transportation may reflect differences in business practices across industries. For example, firms in many services industries regularly send service technicians to client sites, and own-account transportation may provide flexibility in scheduling that for-hire transportation can not provide. Similarly, in many retail trade industries, deliveries tend to be irregular in time and location, and for-hire transportation services may be too limited or too expensive. In addition, the omission of own-account transportation by other modes, such as water and air, may have some impact on the differences in industry usage if different industries rely on own-account transportation by these modes to a different extent.

Estimating methods

The 1996 TSA's are based on information from the 1996 annual I-O accounts and the 1992 TSA's and on additional transportation-related data for 1996.7 The gross output measure of own-account transportation is a cost-based estimate derived from these data. It includes major cost items for the measured transportation operations for an industry--such as fuel, tires, drivers' compensation--but it does not include the contribution of the own-account transportation operations to profits.


The method used to estimate own-account transportation for the 1996 TSA's generally follows steps that were used for the 1992 TSA's. First, all the commodities in the I-O accounts were separated into the commodities that were related to transportation and those that were not on the basis of whether or not the commodity was used predominantly for transportation purposes. For example, motor gasoline, tires, and automotive repair services were primarily used for the maintenance and operation of motor vehicles.


Second, the total use of each commodity that was identified as transportation-related was separated into two parts--that used for transportation and that used for other purposes. For example, gasoline is used for transportation and for operating farm equipment.


Third, the transportation portions of the transportation-related commodities were distributed to different modes, such as transportation by truck, by bus, by air, and by water.


Fourth, for transportation by truck and bus, the transportation portions of the transportation-related commodities were distributed to using industries. The distributions were based on data related to motor vehicles, such as motor vehicle miles by industry and motor fuel use by industry. A set of distribution weights was derived from these data in order to approximate the relative size of transportation operations in nontransportation industries.8


Fifth, estimates of other inputs were prepared to form a complete input structure for own-account transportation. These estimates were based on the input structures of the corresponding for-hire transportation industries and exclude transportation costs and trade margins.


Finally, estimates of transportation costs and trade margins were derived from the data on total transportation costs and trade margins expressed as ratios of the commodity output for each and every I-O commodity.


The major difference between the estimating method used for the 1996 TSA's and that used for the 1992 TSA's is the data that were used to distribute the transportation portion of the transportation-related commodities in step four. For the 1992 TSA's, the distribution weights were based on data from the Census Bureau's 1992 Truck Inventory and Use Survey, which is only conducted every 5 years as a part of the economic census. For the 1996 TSA's, the distribution weights were extrapolated from those used for the 1992 TSA's by detailed industry output data from the 1996 annual I-O accounts (see table A).


The TSA extrapolators are based on nominal values of industry output, so they include relative price effects. These output-based extrapolators are used to calculate the distribution weights of transportation-related commodities, which are then used to derive TSA estimates of own-account transportation for industries. For the 1996 TSA's, the relative price effects are assumed to have only a small impact. In future updates, real values will be used.


The new source data used to prepare the 1996 TSA's include the following: The output of transportation-related commodities are from the 1996 annual I-O accounts; 1996 data on energy use by transportation modes, which are used to distribute transportation-related commodities by modes, are from the Department of Energy's transportation energy data book; and the input structure of the for-hire transportation industries from the 1996 annual I-O accounts are used to estimate the inputs for own-account transportation. Table A provides a summary comparison of the source data used for the 1992 and 1996 TSA's.

Data Availability

This article presents the aggregate estimates from the 1996 transportation satellite accounts (TSA's). Estimates for 99 industries at the I-O summary level are available on BEA's Web site at <>; under "National," click on "Industry and wealth data," and look under "Transportation data." On the same site are also available estimates from the 1992 TSA's. Estimates from the 1992 and 1996 annual I-O accounts are available on BEA's Web site at <>; under "National," click on "Industry and wealth data," and look under "Input-Output data." The 1996 TSA estimates are also available for $20 on diskette--product number NDN-0252. The 1992 TSA estimates are available for $20 on diskette-product number NDN-0193. To order, call the BEA Order Desk at 1-800-704-0415 (outside the United States, call 202-606-9666).


The U.S. transportation satellite accounts for 1996 were prepared by staff of the Bureau of Transportation Statistics (BTS) under the direction of Rolf R. Schmitt, Associate Director, and by staff of the Bureau of Economic Analysis (BEA) under the direction of Sumiye Okubo, Associate Director for Industry Accounts, and Ann M. Lawson, Chief of the Industry Economics Division. Bingsong Fang, Xiaoli Han, and Jiemin Guo of BTS and Simon Randrianarivel of BEA developed the estimates. Mark A. Planting of BEA provided valuable suggestions and comments that significantly improved the estimates and the final presentation.

1. For an overview of the 1992 TSA's, see Bingsong Fang, Xiaoli Han, Ann M. Lawson, and Sherlene K.S. Lum, "U.S. Transportation Satellite Accounts for 1992," Survey of Current Business 78 (April 1998): 16-27.

2. The TSA's include postal services in government enterprises.

3. The transportation intensity for an industry is measured by the industry's direct requirement of transportation as a share of its total output. The higher the share, the more intensive a user the industry is.

4. The level of value added from own-account transportation is not comparable with that from for-hire transportation, because the value added from own-account transportation does not include a profit component while that from for-hire transportation does. This treatment of profits for own-account transportation is both conceptual and technical. Profits of own-account transportation activities contribute to overall profits, but a reliable indicator for estimating this contribution is not available.

5. In the TSA's, transportation services provided by for-hire transportation industries for the industries' own use are classified as for-hire transportation. Although some of these services may be provided on an own-account basis, the data for own-account cannot be separated from those for for-hire transportation. As a result, the comparison of for-hire transportation with own-account transportation may be slightly distorted. However, the estimates of the size and growth of total transportation are not affected, because own-account transportation activities conducted by for-hire transportation industries are included in the measures of for-hire transportation industries.

6. The profit margin for for-hire transportation increased in 1992-96. If the profit margin increased similarly for own-account transportation, then a bias is introduced into the TSA estimates when comparing growth in value added for for-hire transportation, which includes profits, with that for value added for own-transportation, which does not include profits.

7. For an overview of the 1996 annual I-O accounts, see Sumiye O. Okubo, Ann M. Lawson, and Mark A. Planting, "Annual Input-Output Accounts of the U.S. Economy, 1996," Survey 80 (January 2000): 37-86.

8. The transportation-related commodities for other modes were not distributed to using industries, because sufficient information to create these distributions was not available. This is the major reason why own-account estimates for these modes are not included in the current TSA's.