Special Industry Definitions

Candi Clouse, PhD

June 27, 2017 17:38

INTRODUCTION

Certain IMPLAN Industries require additional explanation, either because they are not NAICS based or they have special properties. Below are the special Industry descriptions (Industry numbers are based on the 546 Industry Scheme).¹

INDUSTRIES 50-59: CONSTRUCTION

IMPLAN construction Industries are classified by structure type (Census definitions) rather than NAICs codes. For this reason, when using the excel document that bridges NAICS to IMPLAN Industries, you will not find construction Industries. Thus, when working with Construction Industry, the "IMPLAN CONSTRUCTION INDUSTRY DETAILS" can be helpful.

We get our production functions - and thus our Industry Scheme - from the BEA's Benchmark I-O model. The IMPLAN construction Industries match those that the BEA has produced. Census data on construction Output is gathered and matched to the BEA construction production functions. Due to the use of these sources, our construction Industries are based on Census structure types rather than NAICs codes. For most analyses this is preferable to trying to figure out how much of the various NAICs categories of contractors go into each structure. Because of this, construction activities like land clearing, plumbing, HVAC, etc. are not individual Industries in IMPLAN; rather, these activities are captured in the Construction Industries. Using Census structure types allows us to define industries by the type of structure being built instead of by the type of construction activity being done.

Learn more about analyzing the effects of construction activity in the article Construction: Building the Analysis.

INDUSTRY 449: OWNER-OCCUPIED DWELLINGS

This Industry estimates what owner/occupants would pay in rent if they rented rather than owned their homes. This Industry creates an industry out of owning a home, and its production function represents repair and maintenance of that home. The Industry's sole product (Output) is ownership and is purchased entirely by personal consumption expenditures (via household spending).

There is no Employment or Employee Compensation for this industry. Taxes on production for this Industry are largely made up of property taxes paid by the homeowner, while Other Property Income is the difference between the rental value of the home and the costs of home ownership. Interest payments and mortgage payments are a transfer in the SAM and are not part of the production function for this Industry.

Industry 449 is included in the database to insure consistency in the flow of funds. It captures the expenses of home ownership such as repair and maintenance construction, various closing costs, and other expenditures related to the upkeep of the space in the same way expenses are captured for rental properties.

Learn more in the article Housing: Owning, Buying, Selling and Renting.

INDUSTRY 525: PRIVATE HOUSEHOLDS

While not a true special Industry, there are often many questions regarding what Industry 525 produces. This Industry covers live-in household staff: maids, butlers, chauffeurs, etc.

INDUSTRIES 526-534: GOVERNMENT ENTERPRISES

IMPLAN Industries 526-534 represent government agencies that cover a substantial portion of their operating costs by selling goods and services to the public. They operate much like private sector firms, hiring labor and purchasing other inputs to produce goods that are sold through markets. Other Federal\State\Local government enterprises (i.e., those other than postal, electric utility, and transportation services) include things such as government owned and operated liquor stores, airports, sewer and sanitation services, gas, and water supply². This differs from Administrative Government Industries(components of consumption - i.e., final demand), because administrative do not respond to local market demands.

INDUSTRIES 535-538: COMMODITIES ONLY

IMPLAN Industries 535-538 will always have values of zero for all indicators. Commodities 3535-3538 are not produced intentionally by any US industry:

Used and secondhand goods are goods that are traded but were not produced during the current year. While used goods are not part of the current-period gross output of the economy, they are part of the supply available for consumption. They come from capital, government institutions, and households.
Scrap consists of commodities that are cast off as part of a production process and then resold. Examples include sales of used aluminum cans to recyclers and sales of scrapped vehicles to metal recyclers.
Rest of world adjustment "The rest-of-the-world adjustment to final uses consists of values for exports and imports that have offsetting adjustments to personal consumption expenditures (PCE) and government… This adjustment is required in order to conform the commodity treatment of the I-O use table to the expenditure concepts used for final uses in the NIPAs. This is accomplished by making offsetting adjustments between PCE and gross exports and between Federal Government nondefense purchases and exports and imports…For example, foreigners traveling in the United States consume goods and services, such as accommodations, that are included in the source data for PCE. In order to put the PCE estimate on a NIPA basis, an adjustment is made to account for these purchases."³
Non-comparable foreign imports are goods that are not available anywhere in the nation. They consist of three types of services: (1) services that are produced and consumed abroad, such as airport expenditures by U.S. airlines in foreign countries; (2) service imports that are unique, such as payments for the rights to patents, copyrights, or industrial processes; and (3) service imports that cannot be identified by type, such as payments by U.S. companies to their foreign affiliates for an undefined basket of services.

INDUSTRIES 539-546: ADMINISTRATIVE PAYROLL

Administrative government activities (e.g., legislatures, police protection) are not subject to local market forces (i.e., not driven by local demand); as such, they are held exogenous to the multiplier model.

IMPLAN Industries 539-546 represent the payroll/value added of government employment. This is necessary because, while the Commodity purchases of these government institutions are already represented in the SAM, these Industries are included as a bookkeeping element to account for these institutions' payrolls. By definition, these Industries have no intermediate purchases and thus will not generate indirect effects. For these Industries, Employee Compensation or Employment should be used as Event values; not the operational value of the government as an Output value. When modeling government programs or budgets, you will need to use the appropriate spending pattern associated to the budget activity.

GOVERNMENT INSTITUTIONS

Government Institutions in IMPLAN do not have Industry designations. Instead, they can be modeled from the Impacts screen using an Institutional Spending Pattern Event. For details on how to edit and use these, visit Editing Institutional Spending Pattern Events. The following governmental spending patterns are available.

Federal Government
- NonDefense
- Defense
- Investment
State/Local Government
- NonEducation
- Education
- Investment
Capital
Inventory Additions/Deletions