Box: Alternative I-O Tables

The Bureau of Economic Analysis (BEA) has expanded the traditional 1992 benchmark I-O accounts to include a set of alternative 1992 benchmark make and use tables that are more closely based on the 1987 Standard Industrial Classification (SIC) of industries. The major difference between the traditional I-O tables and the alternative I-O tables is in the treatment of some secondary products produced by industries. The primary purpose of the new alternative tables is to facilitate comparisons of industry data from the 1992 benchmark accounts with other SIC-based data, such as the gross domestic product by industry and capital stock data that are prepared by BEA and the employment and other industry data that are prepared by the Bureau of the Census and the Bureau of Labor Statistics.

Traditional I-O tables

For the traditional I-O tables, BEA begins with industry data from the economic censuses conducted by the Bureau of the Census and classified using the SIC system and then changes the data for selected industries to conform to special I-O requirements. The purpose of these changes is to assure that each resulting I-O industry has a unique output and production process—represented by the mix of inputs—compared with other industries. These changes involve only the outputs and related inputs of some secondary products produced by SIC industries, where the secondary product has a different input mix and production process from the SIC industry's primary product. For example, hotel and lodging places typically provide eating and drinking services as a secondary product to their primary product of hotel and lodging services. The inputs and production processes for these two activities, however, are very different and need to be separated in the traditional I-O accounts for the purpose of preparing total requirements tables. Consequently, the output and inputs associated with eating and drinking services provided by the hotels and lodging places industry are redefined to the eating and drinking industry for the traditional I-O tables.

Alternative I-O tables

In contrast with the traditional I-O accounts, the alternative I-O accounts conform to the current SIC establishment-based data collection system by showing products—primary and secondary—in the industries where they are produced. For example, the alternative I-O accounts do not separate the eating and drinking services from the hotels and lodging places industry activities. Only the industry definitions, which are used to determine the columns of the use table and the rows of the make table, are different from the traditional I-O tables. The commodity definitions, which are used to determine the rows of the use table and the columns of the make table, are the same as those in the traditional tables. Because SIC-defined industries include heterogeneous input mixes and production processes, they are not appropriate for constructing total requirements tables.

The differences between the traditional and alternative tables are large for some industries. For example, redefined auto repair output from the retail trade industry makes up almost 40 percent of the I-O auto repair industry output. Generally, these differences include the following: Manufacturing activities in nonmanufacturing industries (for example, bread-making in the retail trade industry); trade activities in nontrade industries (for example, buying and selling without further processing by manufacturing establishments); and service activities in industries where they are not primary (for example, eating and drinking-related activities in the hotels and lodging places industry). An exception is made for construction activities performed by nonconstruction industries, which are redefined to construction in both the traditional and alternative tables.