Transcript No Slide Title

Productivity in the European Union:
A Comparative Industry Approach
Workshop Inter-Industry Accounts WP 1
15-16 September 2005, Groningen
From Input-output to SUT
Jörg Beutel
Introduction
Objectives
• Outline of present data situation
• Discussion of missing data
• Transformation of use tables from purchasers’ prices to
basic prices
• Transformation of supply and use tables to input-output
tables
• The dual approach: Transformation of input-output tables to
supply and use tables
• Empirical example of transformation for Austria 1995
• Estimation of missing supply and use tables
From Input-Output to SUT
2
Data Situation
ESA 1995
• Annual supply and use tables starting in year 1995
• Five-yearly input-output tables 1995, 2000, 2005, etc.
• Submission mandatory for member countries of EU
The tables
• Supply table at basic prices, including transformation into
purchasers' prices
• Use table at purchasers' prices
• Input-output tables for total uses, domestic production and
imports at basic prices
Earlier years 1970-1994
• Very few supply and use tables available
• SUT mostly internal data for compilation of IOT’s
• Various input-output tables with different classifications and
price concepts were published
From Input-Output to SUT
3
Period 1995-2002
1500 Supply
Code
BE
DK
DE
GR
ES
FR
IE
IT
LU
NL
AT
PT
FI
SE
UK
CY
CZ
EE
HU
LT
LV
MT
PL
SK
SI
1600 Use
1700 Siot
1800 Domest.
1900 Import
1995 1996 1997 1998 1999 2000 2001 2002 1995 1996 1997 1998 1999 2000 2001 2002 1995 2000 2001 1995 2000 2001 1995 2000 2001
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
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x
x
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x
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x
x
x
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x
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x
x
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x
x
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x
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x
x
x
x
x
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x
x
x
x
x
x
x
x
x
x
x
x
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x
x
x
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x
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x
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x
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x
x
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x
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x
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x
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x
x
x
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x
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x
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x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
BG
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
97
98
x
x
x
x
x
x
97
98
pp/ii
pp
ii
pp
pp
pp
x
x
x
x
x
x
x
x
99
x
x
x
x
x
x
x
99
x
x
x
x
x
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x
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x
x
x
x
pp
x
99
x
x
x
x
x
97
98
x
x
x
ii
pp
pp
ii
pp
pp
pp
pp + ii
x
x
x
96
x
x
x
x
x
x
x
x
x
x
x
96
x
96
pp
HR
RO
TR
x
NO
x
x
x
Derogation
YY
x
Source: Eurostat
Different year
under preparation
From Input-Output to SUT
4
Period 1970-1994
1. Belgium
2. Denmark
3. Germany
4. Greece
5. Spain
6. France
7. Ireland
8. Italy
9. Luxembourg
10. Netherlands
11. Portugal
12. United Kingdom
13. Austria
14. Finland
15. Sweden
1959
1965
x
x
x
x
x
x
x
x
x
x
x
1970
1975
1980
1985
Input-output tables by country
x
x
e
x
x
x
x
x
x
e (5)
x
x
x (6)
x
x
x
x
x (1)
x
x (7)
x
x
x
x (8)
x (2)
x (9)
x
x
x
x (10)
x
e (11)
x
x
x
x
x
x
x
1990
1995
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
e
Aggregate input-output tables
EU6
EU7
EU9
EU12
EU15
x
x
x
x (3)
x
x (4)
e
e
e
Legend: x: available e: estimated for R25 by Eurostat
From Input-Output to SUT
Source: Eurostat
5
Challenge
1995-2002
• Collect supply and use tables from NewCronos (Eurostat)
• Compile missing supply and use tables 1995-2002
• Estimate valuation matrices (trade and transport margins, taxes)
• Establish supply and use tables at basic prices for total supply,
domestic production, imports
Earlier years 1970-1994
• Collect existing SUT’s and IOT’s
• Estimate supply tables for existing IOT’s
• Various price concepts and various classifications
• Estimate use tables at basic prices for existing IOT’s
• Estimate missing SUT’s at basic prices for other years
• Comparison with National Accounts in NewCronos
From Input-Output to SUT
6
Valuation matrices
Different valuation matrices
•
•
•
•
Trade margins (wholesale trade, retail trade)
Transport margins (inland, water, air and other transport)
Taxes on products (product taxes, VAT)
Subsidies on products
Price concept
• Transformation of use tables at purchasers prices to use
tables at basic prices
• Transformation of input-output tables at producers prices to
basic prices
From Input-Output to SUT
7
Access to valuation matrices
• Access to valuation matrices for selected countries in the
course of the Eurostat data submission programme
• Germany, Denmark and Austria
• Austria published valuation matrices on CD-Rom in
‘Statistik Austria: Input-Output-Tabelle 1995’
• Tax matrices were published by Eurostat in ‘Input-Output
tables 1985’ for Denmark, France, and Ireland covering
59 sectors.
From Input-Output to SUT
8
Transformation of supply and
use tables to basic prices
Supply and use tables
Supply
table at
purchasers’
prices
Imports
cif
Supply table at
basic prices
Valuation matrices
Use
table at
purchasers’
prices
Use table of imports
at basic prices
Wholesale
trade
margins
Retail
trade
margins
Transport
margins
Taxes
on products
Subsidies
on products
Use table at basic prices
Use table of domestic production at basic prices
From Input-Output to SUT
9
Price system of the input-output framework
Basic Prices =
+Taxes on products
- Subsidies on Products
= Producers’ prices (net of all VAT)
+ Non-deductible VAT
= Producers’ prices (net of deductible VAT)
+ Trade Margins
+Transport Margins
= Purchasers’ prices (net of deductible VAT)
From Input-Output to SUT
10
7
8
Table 2: Domestic production
1 Agriculture
6
40
1
2 Industry
10
88
52
3 Services
7
53
101
4 Imports cif
9
92
33
5 Other taxes linked to production - 1
0
- 1
6 Net taxes on domestic production- 1
1
4
7 Non-deductible VAT on domestic production
0
0
11
8 Net taxes on imports from EU
0
0
1
9 Non-deductible VAT on imports from0 EU
0
1
10 Net taxes on imports from third countries
0
1
1
11 Non-deductible VAT on imports from0 third countries
0
1
12 Value added
30
149
342
13 Output
61
424
546
3
60
329
32
0
15
32
8
4
8
4
0
495
0
72
10
27
0
1
7
1
0
1
0
0
120
7
60
13
7
0
- 2
0
0
0
0
0
0
86
Basic prices
3
61
82
424
32
546
9
209
0
- 2
- 2
16
0
51
0
10
0
5
0
10
0
5
0
521
124
1 854
Table 5: Domestic production (5 = 2 + 11 +14)
1 Agriculture
6
40
2 Industry
10
88
3 Services
7
54
4 Imports
9
93
5 Other taxes linked to production - 1
0
6 Net taxes on production
- 1
12
7 Non-deductible VAT domestic products
0
0
8 Non-deductible VAT on imports from0 EU
0
9 Non-deductible VAT on imported products
0
0
10 Value added
30
149
11 Output
60
436
3
73
330
49
0
0
32
4
4
0
495
Producers' prices (net of all VAT)
0
7
3
60
72
58
80
436
11
13
32
550
29
7
9
229
0
0
0
- 2
0
0
0
16
7
0
0
51
0
0
0
5
0
0
0
5
0
0
0
521
120
86
124
1 870
1
55
103
34
- 1
5
11
1
1
342
550
Table 8: Domestic production (8 = 2 + 11 + 14 + 17)
1 Agriculture
6
40
1
2 Industry
10
88
60
3 Services
7
54
109
4 Imports
9
93
36
5 Other taxes linked to production - 1
0
- 1
6 Net taxes on production
- 1
12
5
7 Non-deductible VAT on production 1
27
23
8 Value added
30
149
342
9 Input
61
462
574
Producers' prices (net of deductible VAT)
4
0
7
3
61
87
79
58
80
462
347
12
13
32
574
56
29
7
9
239
0
0
0
0
- 2
0
0
0
0
16
0
0
0
0
51
0
0
0
0
521
495
120
86
124
1 921
Table 3: Imports
1 Agriculture
2 Industry
3 Services
4 Total
1
2
3
4
5
4
86
2
92
0
20
12
33
3
30
0
32
0
27
0
27
1
8
0
9
Table 6: Imports (6 = 3 + 12 + 15)
1 Agriculture
1
4
0
2 Industry
8
87
22
3 Services
0
2
12
4 Total
9
93
34
6
1
6
0
7
Output
Output
6
Exports to
third
Exports to
third
countries
5
Gross fixed
capital
formation
Exports to EU
countries
Exports to EU
countries
4
Consumption
Gross fixed
capital
formation
3
Services
Consumption
2
Industry
Services
1
Industry by
industry
Agriculture
Industry
Industry by industry
Agriculture
PRICE SYSTEM OF THE INPUT-OUTPUT FRAMEWORK FOR DENMARK 1985 (Mio. DKR)
7
8
Basic prices
1
10
8
184
0
15
9
209
Producers' prices (net of all VAT)
3
0
1
1
10
46
28
6
8
204
0
0
0
0
15
49
29
7
9
229
Table 9: Imports (9 = 3+12+15+18) Producers' prices (net of ded. VAT)
1 Agriculture
1
4
1
4
0
1
1
11
2 Industry
8
87
23
52
29
6
8
212
3 Services
0
2
12
1
0
0
0
16
4 Total
9
93
36
56
29
7
9
239
Table 11: Net taxes on products (domestic production)
1 Agriculture
0
0
0
2 Industry
- 1
0
2
3 Services
0
1
2
4 Total
- 1
1
4
0
14
1
15
0
0
1
1
0
- 2
0
- 2
0
- 2
0
- 2
- 1
12
5
16
Table 12: Net taxes on products (imports)
1 Agriculture
0
0
0
0
2 Industry
0
1
1
16
3 Services
0
0
0
0
4 Total
0
1
1
16
0
1
0
1
0
0
0
0
0
0
0
0
0
20
0
20
Table 14: Non-deductible VAT (domestic production)
1 Agriculture
0
0
2 Industry
0
0
3 Services
0
0
4 Total
0
0
1
14
18
32
0
7
0
7
0
0
0
0
0
0
0
0
1
27
23
51
Table 15: Non-deductible VAT (imports)
1 Agriculture
0
0
0
1
2 Industry
0
0
1
6
3 Services
0
0
0
1
4 Total
0
0
2
7
0
1
0
1
0
0
0
0
0
0
0
0
1
8
1
10
0
6
5
11
From Input-Output to SUT
11
Transformation of supply and use tables to IOT’s
Model assumptions
Product technology assumption (Model A)
Each product is produced in its own specific way, irrespective of the industry
where it is produced.
Assumption of fixed industry sales structure (Model B)
Each industry has its own specific sales structure, irrespective of its product
mix
Industry technology assumption (Model C)
Each industry has its own specific way of production, irrespective of its
product mix.
Assumption of fixed product sales structure (Model D)
Each product has its own specific sales structure, irrespective of the industry
where it is produced.
From Input-Output to SUT
12
Transformation of supply and use tables
to input-output tables
INPUT COEFFICIENTS
Z = U * inv(g)
L = W * inv(g)
Intermediates of industries per unit of output
Value added of industries per unit of output
OUTPUT COEFFICIENTS
C = V' * inv(g);
D = V * inv(q);
Output coefficients for industries by product
Output coefficients for products by industry
I. TRANSFORMATION OF SUPPLY AND USE TABLES TO INPUT-OUTPUT TABLES
Model A: Product by product input-output table based on product technology assumption
q = inv(I-Z * inv(C)) * y
Output
A = Z * inv(C ) * diag(q)
Intermediates
Y=Y
Final Demand
X = L * inv(C) * diag(q)
Value added
Negatives
Model B: Industry by industry input-output table based on fixed industry sales structure assumption
g = inv(I-inv(C ) * Z) * inv(C) * y
Output
B = inv(C) * Z * diag(g)
Intermediates
E = inv(C) * Y
Final Demand
W=W
Value added
Negatives
Model C: Product by product input-output table based on industry technology assumption
q = inv(I-Z * D) * y
Output
A = Z * D * diag(q)
Intermediates
Y=Y
Final Demand
X = L * D * diag(q)
Value added
No negatives
Model D: Industry by industry input-output table based on fixed products sales structure assumption
g = inv(I-D *Z) * D * y
Output
B = D * Z * diag(g)
Intermediates
E=D*Y
Final Demand
W=W
Value added
No negatives
From Input-Output to SUT
13
Model assumptions for transformation to IOT’s
Product technology assumption (Model A)
• Widely used by countries which publish product by product IOT
• Belgium, Denmark, Greece, Spain, France, Italy, Austria, Portugal,
Sweden, UK, Estonia, Slovakia, Hungary
• Problems with negatives
• Analytical tables away from statistical sources
Assumption of fixed product sales structure (Model D)
•
•
•
•
Widely used by countries which publish industry by industry IOT
Denmark, Netherlands, Finland, Canada, Norway, Hungary
No negatives
Close to statistical sources
Other assumptions
• Hybrid technology (UK), Almon procedure (Test version for NL)
From Input-Output to SUT
14
Transformation of input-output tables
to supply and use tables
INPUT COEFFICIENTS
Z = U * inv(g)
L = W * inv(g)
Intermediates of industries per unit of output
Value added of industries per unit of output
OUTPUT COEFFICIENTS
C = V' * inv(g);
D = V * inv(q);
Output coefficients for industries by product
Output coefficients for products by industry
II. TRANSFORMATION OF INPUT-OUTPUT TABLES TO SUPPLY AND USE TABLES
Model A2: Use table from product by product IOT based on product technology assumption
U = A * inv(diag(q)) * C * diag(g)
Intermediates
Y=Y
Final Demand
W = X * inv(diag(q)) * C * diag(g)
Value added
No negatives
Model B2: Use table from industry by industry IOT based on fixed industry sales structure assumption
U=C*B
Intermediates
Y=C*E
Final Demand
W=W
Value added
No negatives
Model C2: Use table from product by product IOT based on industry technology assumption
U = A * inv(diag(q)) * inv(D) * diag(g)
Intermediates
Y=Y
Final Demand
W = X * inv(diag(q)) * inv(D) * diag(g) Value added
Negatives
Model D2: Use table from industry by industry IOT based on fixed products sales structure assumption
U = inv(D) * B
Intermediates
Y = inv(D) * E
Final Demand
W=W
Value added
Negatives
From Input-Output to SUT
15
Transformation of input-output table to use table
Data situation
• For earlier years often supply and use tables are not available
• If they exist they internal data of Statistical Offices for the
compilation of IOT’s.
Required input data
• Input-output table and supply table
• Supply table can be derived from benchmark years and
official national accounts data.
• The structure of supply tables is rather stable in time.
From Input-Output to SUT
16
Model assumptions for transformation to SUT’s
Recommendation
Use the complements of Model A for product by product IOT’s
and Model D for industry by industry IOT’s.
Product technology assumption (Model A2)
• Widely used by countries which publish product by product IOT
• Transformation to SUT is not creating negatives
Assumption of fixed product sales structure (Model D2)
• Widely used by countries which publish industry by industry IOT
• Transformation may create negatives.
• If negatives are generated Model B2 is an option.
From Input-Output to SUT
17
Transformation of SUT 1995
to IOT 1995 for Austria
Statistik Austria
• Product by product IOT‘s were compiled which are based on
product technology assumption (Model A)
• In the course of the transformation numerous small negative
elements were generated.
• Large negatives are an indication for the mismatch of statistical
sources with the technology assumption.
• The negatives were deleted in a manual balancing procedure.
EUKLEMS transformation
• All 4 transformation models were compiled using SAS software
with dynamic data exchange with Excel files
• The results of Model A were very close to the published IOT’s.
From Input-Output to SUT
18
Transformation of IOT 1995
to SUT 1995 for Austria
EUKLEMS transformation
• Required inputs are IOT 1995 and supply table 1995
• All 4 transformation models were compiled using SAS software
with dynamic data exchange with Excel files
• The results of Model A2 were close to the published SUT.
• The manual balancing caused minor deviations for value added
and intermediate inputs for most sectors.
• In some cases larger differences were caused which can be
revised in a manual balancing procedure.
• GDP and components of value added and final demand are
correct.
From Input-Output to SUT
19
Projection of SUT‘s and IOT‘s
Requirements
• Supply and use tables or input-output table at basic
prices for base year
• Real growth rates for valued added of industries
(EUK60)
• Real growth rates for final demand (private
consumption, government consumption, gross fixed
capital formation, change in stocks, exports)
• Real growth rate of imports
From Input-Output to SUT
20
Updating input-output tables
Agriculture
1
1
:
:
25
26
27
:
:
51
52
53
54
55
56
57
58
59
Production activities
EnInSer- Total
ergy dustry vices 1-25
:
:
25
Agriculture
Energy
Industry
Services
Total 1-25
Agriculture
Energy
Industry
Services
Total 27-51
Capital consumption
VAT
Other taxes
Salaries and allowances
Operating surplus
Value added 53-57
Input 26+52+58
26
Final use of goods and services
PriGo- Gross Chan- Ex- Total Output
vate vern- fixed ge in ports 27-31 26+32
con- ment capital stocks
sump- con- fortion sump- mation
tion
27
28
29
30
31
32
33
Domestic
production
Imports
Value
added
= Real growth rates for value added by sector
= Real growth rates for components of final demand
From Input-Output to SUT
21
Input-output table 1992
Value added 1992
Macroeconomic forecast 1995
Final demand
1992
Value added 1995
Final demand
1995
Growth rates 1992/95 for value
added and final demand
Growth rates 1992/95 for
activities and commodities
Input-output table 1995
(inconsistent)
Input coefficients
Inverse
Final demand
Input-output table 1995
(consistent)
Value added 1995
Adjustment factors for growth rates
Difference > 1
%
Final demand
1995
Difference to forecast
Difference <
1%
Stop
From Input-Output to SUT
22
Eurostat method
The main advantages of the Eurostat update procedure
• Robust update procedure at low costs
• Limited data requirements
• Only official sources from New Cronos are used.
• Integrated estimation of all four quadrants of IOT
• No arbitrary changes of input coefficients as in RAS
• Row and column totals for intermediates derived not given
• Structure of final demand estimated during the iteration
• Consistency of supply and demand provided by io-model.
• Successfully implemented for DG Regio
• Evaluation of the European Structural Funds in Greece,
Portugal, Ireland, Germany, Italy, and Spain
• Documentation of updating procedures in Eurostat
Input-Output Manual
From Input-Output to SUT
23
Updating supply and use tables
Domestic
products
Industries
Final
demand
Total
Domestic products
Ud
Yd
qd
Imported products
Um
Ym
qm
Industries
Imports
Value added
Total
Imported
products
V
g
qm'
qd'
qm'
m
w
W
g'
y
= Real growth rates for value added by sector
= Real growth rates for components of final demand
qd = Product output domestic production
qm = Imported products
m = Imports
g = Industry output domestic production
w = Value added of industries
y = Final demand
V' = Supply matrix
V = Transposed supply matrix (make matrix)
Ud = Use matrix for domestic intermediates
Ud = Use matrix for imported intermediates
Yd = Final demand for domestic products
Ym = Final demand for imported products
W = Value added of industries
From Input-Output to SUT
24
Recommendations
• Classification
Data base of EUKLEMS should cover all 60 individual industries (A60) of
ESA 1995. EUK60 requires the disaggregation of 10 additional industries.
In consequence the supply and use tables will comprise 70 industries.
The data base will always allow to aggregate the results to A60.
• Input-output tables
Collect all input-output tables, also if supply and use tables are available.
The input-output tables may be the only reliable source of import
matrices.
• Transformation of use tables at purchasers’ prices to use tables at
basic prices
Establish a standard procedure for the transformation of use tables at
purchasers’ prices to use tables at basic prices. Estimate or collect all
recommended valuation matrices.
From Input-Output to SUT
25
Recommendations
• Valuation matrices
If valuation matrices are missing use reference year or reference country
to blow up the valuation vectors of the supply table to a full size valuation
matrix.
• Transformation of supply and use tables to input-output tables and
vice versa
Use appropriate technology assumption for the transformation of inputoutput tables to supply and use tables and the transformation of inputoutput tables to supply and use tables.
• Compilation of missing supply and use tables
Use a projection model to compile the missing supply and use tables. The
main aggregates (GDP, value added by industry, components of final
demand) shall be compared with the macroeconomic data in NewCronos
of Eurostat.
From Input-Output to SUT
26
Software for transformation
Excel
• Restrictions for calculation of an inverse (maximum matrix size 52x52)
• No programme code
• Not transparent for other users
SAS
• No restrictions for calculation of an inverse
• Documentation of programme code
• Easy search for programming errors
• Three windows document the program code (Program), errors in the
compilation procedure (Log) and the results (Output)
• Dynamic data exchange with Excel for input and output
Excel and SAS
• Powerful tool for complex macroeconomic models
• Professional documentation
• Easy generation of tables and figures for publication
From Input-Output to SUT
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Documentation
• Compilation of supply and use tables at basic prices
Paper for the Amsterdam meeting of the Data C-ordination Group
DC note1beutelc WP1.doc
• Transformation of supply and use tables and symmetric input-output
tables
Numerical examples with Excel
hybridrev8.xls
• Transformation of supply and use tables and symmetric input-output
tables
Empirical application for Austria 1995 with SAS and dynamic data
exchange with Excel files
ausut95sept05b.xls
From Input-Output to SUT
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