Elements of IMPLAN SAM Tables

INTRODUCTION

Social Accounting Matrices (SAMs) are static matrices that trace monetary flows throughout a Region for a given period of time. SAMs expand upon the traditional Input-Output (I-O) tables to also include transactions between Industries and Institutions and between Institutions themselves, thereby capturing all monetary market transactions in a given year. 

A core tenet of SAM models is that the monetary flows are recorded and accounted for by both parties (the buyer and the seller in a market or the recipient and the funder in a non-market) in a Region. Consistent with basic financial accounting, receipts must equal expenditures. That is, the SAM must balance. Additionally, this matrix format allows the double-entry bookkeeping to be displayed in a single entry format. The column entries represent expenditures by the column Industry, Commodity, or Institution, while the row entries represent receipts or income by the Industry, Commodity, or Institution.

This article provides detailed information about the elements presented in the IMPLAN Industry by Commodity (IxC) SAM and the IMPLAN Industry by Industry (IxI) SAM. For more general information about the SAM framework see I-O and SAM Matrices.

IxC SOCIAL ACCOUNTING MATRIX

The IMPLAN IXC SAM shows the flows of funds related to the buying and selling of Commodities, without any information as to which Industries or Institutions were involved in the production of those Commodities. Commodity purchases come from all Industries and Institutions that produce or sell the Commodity, according to the market share matrix. In this way, the Commodity could have been produced by an Industry that produces the Commodity as its primary product, by an Industry that produces the Commodity as a secondary by-product, or from an  Institution(such as Household, Government, or Inventory) that either produces or sells the Commodity. That said, as mentioned previously, the IxC SAM does not identify which Industry or Institution the Commodity comes from. The IMPLAN IxI SAM provides that information. 

Detailed IxC SAM Graphic

INDUSTRY COLUMN

The Industry column details the total outlays of the Industries in the Region. Read more about Industries in Industry and Commodity Basics.

• Payments to the Commodity row represent the use of locally-produced Commodities (both goods and services) by local Industries, without any information as to which Industries or Institutions were involved in the production of said Commodities. These Commodity purchases come from all Industries and Institutions that produce that Commodity, according to the market share matrix. Use of imported goods and services show up in the Industry columns’ payments to the trade rows. 
• Payments to the factors (EC, PI, OPI, and TOPI) represent factor income (payments to employees, interest, profits, taxes, etc.)
• Payments to the Trade rows represent gross import of goods and services for intermediate use by Industry.
• There will be no payments to Government or Households; in the IxC SAM, the purchase of inputs sold by the Government or by Households are included in the payments to the Commodity row.
• There will be no payments to Inventory; in the IxC SAM, the purchase of inputs taken out of Inventory are included in the payments to the Commodity row.
• There will be no payments to Capital row (see explanation in Capital column section below).
• Column total = Total Industry Output (TIO). 

COMMODITY COLUMN

The Commodity column shows the value of production by the producing row that is consumed locally. Production not consumed locally (exports) appears in the Trade columns’ payments to the Industry rows and producing Institutional rows.

• Payments to Institutions represent Institutions selling Commodities (e.g., sales of timber by the U.S. Forest Service, sales of grain from crop price support programs, inventory sales, and Household production of Scrap).  
• Payments to the Capital row represent Scrap and Used and secondhand goods (i.e., the decommissioning and "recycling" of structures and equipment). These payments reflect the fact that Capital is a source of the Commodities, for example, when a building is torn down and sold for parts.
• The column total does not equal total Commodity output (TCO) because some Commodity output is accounted for in the Trade columns’ payments to the producing Industry and Institutions’ rows.
• Payments to the Inventory row represent the sum of net inventory deletions for domestic use for those Commodities for which there were net deletions from inventory.

EMPLOYEE COMPENSATION (EC) COLUMN

Employee Compensation in IMPLAN is the total payroll cost of Wage and Salary Employees to the employer and is also referred to as fully-loaded payroll. This includes wage and salary compensation, supplements to wages and salaries, and both employee- and employer-paid social insurance taxes. The Employee Compensation column details the distribution of EC to Households, Government, and other Regions (Trade). Read more about EC in Understanding Labor Income: Employee Compensation and Proprietor Income.

• Payments to the Household rows include:
  • Wages and salaries paid to local residents, net of social insurance taxes.
  • Benefits and other non-wage compensation.
  • These cells reflect how Labor Income is distributed across the nine Household Income Groups in the Region - looking at the Household Income rows you will find all the sources of income paid to each Household Income Group.
• Payments to Government include:
  • Federal wage accruals less surplus. This occurs at the end of the accounting period if there are wages that workers have earned but not received.
  • Employee contributions to social insurance.
  • Employer contributions to social insurance.
• Payments to Domestic Trade represent gross compensation of non-local domestic workers. If the value is 0, then no in-commuters work in this Region.  
• Payments to Foreign Trade represent gross compensation of foreign workers. It includes estimates of foreign professional workers and undocumented migratory workers employed temporarily in the U.S.

PROPRIETOR INCOME (PI) COLUMN

Proprietor Income represents the current-production income of sole proprietorships, partnerships, and tax-exempt cooperatives.  The Proprietor Income column details the distribution of PI to Households and Government. Read more about EC in Understanding Labor Income: Employee Compensation and Proprietor Income.

• Payments to Household rows represent self-employed income not including social insurance payments.
  • These cells reflect how Labor Income is distributed across the nine Household Income Groups in the Region - looking at the Household Income rows you will find all the sources of income paid to each Household Income Group.
• Payments to Government include proprietor payments of social insurance tax. Note that in the definition, for proprietors, employee and employer are the same.
• In contrast to the Employee Compensation column, there are no payments from the Proprietor Income column to Trade as, by definition, all proprietors are local.

OTHER PROPERTY INCOME (OPI) COLUMN

Calculated as Gross Operating Surplus less Proprietor Income; OPI includes consumption of fixed capital (CFC), corporate profits, and business current transfer payments (net). The Other Property Income column shows the distribution of OPI to Households, Enterprise, Government, and other Regions (Trade). Read more about OPI in Understanding Other Property Income (OPI).

• Payments to Households include:
  • Rental income with a capital consumption allowance (CCA) and a capital consumption adjustment (CCAdj). This is payment to Households primarily for rental properties from the real estate and owner-occupied dwelling sectors. CCA is a bookkeeping calculation of depreciation. CCAdj is the difference between tax depreciation (tax return based capital consumption allowances) and real depreciation (capital consumption based on replacement cost).
  • Net business transfer payments to persons (e.g., corporate gifts to individuals and charities, medical malpractice payments, non-catastrophic insurance settlements for normal losses beyond expected values). Note that settlements for catastrophic losses are considered capital transfers rather than current business transfers and therefore are not included in a current-accounts SAM.
  • Net interest from Industries (interest paid by Industries to Households less interest paid by Households to Industry). Interest paid by Industries to Households includes savings interest, bond interest, pension payments, and life insurance interest. Interest paid by Households to Industry consists primarily of payments for mortgage and loans (these are counted as interest paid by businesses since homeownership is treated like a business in the NIPA accounts).
• Payments to Enterprises are corporate profits.
• Payments to Capital include:
  • Consumption of fixed capital, i.e., depreciation with a capital consumption adjustment.
  • The Region’s share of the NIPA statistical discrepancy, the discrepancy in GDP when measured by the income approach versus the production approach.
• Payments to Government include:
  • Current transfer payments from business to government consist of deposit insurance premiums, fines, fees such as regulatory and inspection fees, settlements received from tobacco companies, donations, and net insurance settlements paid to governments as policyholders.¹
  • Net income for government enterprises (i.e., government enterprise surplus less government enterprise subsidy).
  • Rents and royalties.
• Payments to Trade include:
  • Net business transfers to foreign sources; if negative, it implies a net payment from foreign sources to local businesses. The primary component is net insurance settlements.
  • Income payments representing net payments on assets (e.g., interest and dividends) paid to the rest of the world.
  • In the case of payments to domestic trade, there is no NIPA data corresponding to these elements at the U.S. level. So, at the sub-national level, it is a balance to ensure that the OPI column sum (OPI payments) equals the OPI row sum (OPI receipts). It therefore is a balance between the Region and the rest of the U.S., and includes both net business transfers and net income payments. If one sums this value for all states, it will be zero.

TAXES ON PRODUCTION AND IMPORTS NET OF SUBSIDIES (TOPI) COLUMN

TOPI represents the sales and excise taxes, customs duties, property taxes, motor vehicle licenses, severance taxes, other taxes, and special assessments remitted to the Government by Industries. The Taxes on Production and Imports column shows the distribution of these payments to the various levels of Government. Read more about TOPI in Understanding Taxes on Production and Imports, Net of Subsidies (TOPI).

• Payments to Federal Government include excise taxes and customs duty. Excise taxes include gasoline, alcoholic beverages, tobacco, diesel fuel, air transport, crude oil windfall profits tax, among others.
• Payments to State and Local Government include sales tax, property tax, motor vehicle license tax, severance tax, and other taxes. The property tax paid by TOPI includes payments from both Households and businesses. Since home-ownership is treated as an Industry, payment of real estate property taxes comes from the owner-occupied dwelling sector’s TOPI. Non-taxes consist of business licenses.

HOUSEHOLD COLUMNS

Households represent the residents of the study area and an final user of goods and services. There are nine (9) Households types in IMPLAN, grouped by Household income category. Read more about Households in Household Basics. 

• Payments to the Commodity rows include final demands for locally-produced Commodities.
• Payments to the Household rows include all interest payments by persons, not just inter-household payments for things like personal notes, contracts for deed, and other inter-household loans. The SAM represents them all as inter-household payments since all interest income ultimately ends up in a Household account. 
• Payments to Federal Government include:
  • Personal taxes, the primary component of which is Federal income tax.²
  • With earned income credits and repayment of withheld income in a following year, lower-income Household groups may receive more than they pay yielding a negative value in this cell.
  • Personal transfers, which include fines and donations to government.
  • Purchases of Commodities produced by the administrative Federal government are not included here; rather, they are included in the payments to the Commodity rows.
• Payments to State and Local Government includes:
  • Personal taxes, the primary component of which is federal income tax.
  • Personal property taxes. These do not include home property taxes but rather property taxes for other high-value items like cars and boats.³
  • Purchases of Commodities produced by the administrative State and Local Government are not included here; rather, they are included in the payments to the Commodity rows.
  • Personal motor vehicle license fees.
  • Personal transfers, which includes fines and donations to government.
• There are no payments to Inventory; the purchase of goods taken out of inventory are included in the payments to the Commodity rows.
• Payments to the Capital row represent net savings.
• Payments to the Trade rows include:
  • Purchases of imported goods and services.
  • Transfers to rest-of-world Households (e.g., personal remittance payments).

GOVERNMENT COLUMNS

There are  several Government Institutions in the IMPLAN SAM representing different levels of Government and different spending activities. The Government columns show the distribution of each Government Institution’s spending among Commodities, Households, other Government Institutions, and other Regions (Trade). Read more about Government Institutions in Government Institution Basics

• Payments to the Commodity rows include purchase of locally-produced goods and services, as well as payments to labor and consumption of fixed capital via the government payroll sectors. This payroll is then transferred to EC and OPI via those payroll sectors.
• Payments to the Household rows include:
  • Net interest (on bonds and securities)
  • Social benefits (e.g., social security, veterans’ benefits, food stamps, student aid, etc.)
• Payments between Government accounts represent intergovernmental transfer payments from Federal Non-Defense to State and Local Government Other Services in the form of grants-in-aid (e.g., highway funds for interstates).
• Payments to Capital represent net savings.
• Payments to Domestic Trade include domestic imports of goods and services.
• Payments to Foreign Trade include:
  • Foreign aid
  • Foreign imports of goods and services

PRIVATE ENTERPRISE COLUMN

The Private Enterprise Institution represents incorporated businesses (not proprietorships). It receives income in the form of returns to capital and depreciation allowances.  Enterprise income consists entirely of corporate profits. Read more about Private Enterprises in Additional Final Demand Basics: Capital, Inventory, and Private Enterprise.

• Payments to Households represent dividends.
• Payments to Government include:
  • Corporate profit taxes
  • Dividends (from retirement and other investment accounts).
• Payments to Capital represent retained earnings, which can be saved for future investment, share buy-backs, dividend payments, etc. Note that this is not an indication of how much Industry investment occurred that year because not all of this amount is necessarily invested in that same year and, conversely, more than this amount could be invested in the same year via borrowing.
• Payments to Foreign Trade represent corporate profit tax paid abroad.

CAPITAL COLUMN

The Capital column represents capital expenditures (the purchase of durable goods not used up in the annual operations of an Industry or Institution). Read more about Capital in Additional Final Demand Basics: Capital, Inventory, and Private Enterprise.

• Payments to Commodities represent purchases of locally-produced capital goods by all Industries (in I-O models, investment is outside the USE matrix; that is, Investment is treated as a Final Demand). Data does not exist to separate out the amount of investment by a specific Industry.
• In the IxC SAM, payments to Institution rows represent net dis-savings (borrowing) by the Institution. This can be borrowing from past income (e.g., drawing down retirement accounts) or borrowing from hoped-for future income (e.g., building up debt). Payments from an Institution column to the Capital row represent net savings by the Institution (which can be paying into a savings account or paying down debt). 
• Payments to Trade include:
  • Net capital account transactions, which consist of capital transfers and the acquisition and disposal of non-produced non-financial assets, are paid to Foreign Trade.
  • Imports of capital goods.
  • Capital transfers to Trade are calculated upon balancing of the SAM (i.e., they serve as balancers).
    • In a national model, if more money leaves the country via imports (of goods, services, and labor) and transfer payments abroad than comes into the country via exports (of goods and services, and labor) and transfer payments received from abroad, then the country is, on a net basis, borrowing money from the rest of the world and there will be a payment from the capital column to the Foreign Trade row. If it is the reverse, there will be a payment from the Foreign Trade column to the capital row. 
    • In a sub-national model, the same is true of payments between capital and Domestic Trade.
• Payments to Inventory represent economy-wide net inventory change in the form of the capital column’s payment to inventory (if there were net additions) or the inventory column’s payment to capital (if there were net deletions).

INVENTORY COLUMN

The Inventory column represents net Inventory additions. Inventory represents stocks of goods held by an Industry or Institution over a period of time. In IMPLAN, Inventory includes products purchased for resale (generally held by wholesalers and retailers), materials and supplies for use in the production of goods for sale or in the provision of a service, products that are partly processed and that require further processing prior to sale, or finished goods held for sale. Read more about Inventory in Additional Final Demand Basics: Capital, Inventory, and Private Enterprise.

• Payments to the Commodity row represent the sum of the inventory additions from domestic sources for those Commodities for which there were net additions to Inventory. If all Commodities made net deletions from inventory, the payment from Inventory to Commodity will be 0 and the payment from Inventory to Capital would be that total net deletion value. If any Commodity makes a net addition to inventory, there will be a positive payment from Inventory to Commodity. 
• Payments to the Trade rows represent the sum of the additions to inventory of Intermediate Inputs from sources outside the Region, for those Commodities for which there were net additions to Inventory.
• Payments to Capital represent economy-wide net inventory change: the Inventory column’s payment to Capital (if there were net deletions) or the Capital column’s payment to Inventory (if there were net additions).

Note that in a full-detail SAM, there would be separate columns for Inventory purchases (additions to Inventory) and inventory sales (deletions from Inventory), with the Inventory sales values being negative. However, a matrix that contains negative values cannot be inverted in the process of calculating multipliers to be used for Economic Impact Analysis. Therefore, in IMPLAN SAMs, there is just one entry in the SAM for Inventory, representing net Inventory changes.

• For each Commodity, if net Inventory change (additions less deletions) is positive (i.e., there net additions of the Commodity), the value is represented as a positive value in the Inventory column.
• In contrast, if net Inventory change (additions less deletions) is negative (i.e., there are net deletions of the Commodity), the value is represented as a positive value in the Inventory row.

DOMESTIC TRADE COLUMN

The Domestic Trade column represents net Domestic Exports. Domestic Exports capture the monetary flows out of the Region to other Regions in the U.S. In the case of the IxC SAM, these exports include not only the value of goods and services that are produced in the Region and sold to other Regions within the U.S, but also transfers in the forms of after-tax Employee Compensation, Business Transfers, Taxes, Social Benefits, and Capital Transfers. Read more about Domestic Trade in Trade Flows in IMPLAN.

• While strictly speaking all purchases of Commodities in an IxC SAM should be recorded as payments to the Commodity rows, in the current version of IMPLAN the Foreign Trade column makes Commodity purchases directly from the producing Industry or Institution.
• Payments to the Industry rows represent the domestic export of goods and services.
• Payments to the Household rows include:
  • Gross compensation paid to local workers by non-local Regional companies (i.e., gross out-commuting).
  • Domestic export of goods and services produced by Households.
• Payments to the other Institution rows represent the export of goods and services produced by Government, Capital, and Inventory.

• Payments to Capital include:
  • Export of goods and services produced by capital, which consists of Scrap and Used and secondhand goods.
  • Net savings (i.e., investment) from the rest of the U.S. (net domestic balance of trade).  If working with a U.S. model, any value in this cell should be very small and is a residual of the SAM balancing process.

Note that in a full-detail SAM, there would be separate columns for Domestic Imports and Domestic Exports, with the Domestic Imports values being negative. However, a matrix that contains negative values cannot be inverted in the process of calculating multipliers to be used for Economic Impact Analysis. Therefore, in IMPLAN SAMs, there is just one entry in the SAM for Domestic Trade, representing net trade. 

• For each Commodity, if net Domestic Trade (exports less imports) is positive (i.e., there net exports of the Commodity), the value is represented as a positive value in the Domestic Trade column.  
• In contrast, if net Domestic Trade (exports less imports) is negative (i.e., there are net imports of the Commodity), the value is represented as a positive value in the Domestic Trade row. 

FOREIGN TRADE COLUMN

The Foreign Trade column represents net Foreign Exports. Foreign Exports capture the monetary flows out of the Region to countries outside of the U.S. and include not only the value of Commodities that are produced in the Region and sold to other countries, but also transfers in the forms of after-tax Employee Compensation, Business Transfers, Taxes, Social Benefits, and Capital Transfers. Read more about Foreign Trade in Trade Flows in IMPLAN.

• While strictly speaking all purchases of Commodities in an IxC SAM should be recorded as payments to the Commodity rows, in the current version of IMPLAN the Foreign Trade column makes Commodity purchases directly from the producing Industry or Institution. Thus, payments to the Industry rows represent the foreign export of goods and services produced by Industries in the Region.
• Payments to the Household rows include:
  • Gross compensation paid to Regional workers by extra-Regional companies (i.e., gross out-commuting)
  • Foreign export of goods and services produced by Households.

• Payments to Government and Inventory represent the foreign export of goods and services produced by government and inventory.
• Payments to Capital include:
  • Export of goods and services produced by capital, which consists of Scrap and Used and secondhand goods.
  • Net savings (i.e., investment) from the rest of the rest of the world (net foreign balance of trade).

• Payments to Capital represent net foreign savings (net foreign balance of trade).
• Payments to Trade are trans-shipments (imports to re-export).

As described previously, there is just one entry in the SAM for Foreign Trade, representing net trade. 

• For each Commodity, if net Foreign trade (Exports less Imports) is positive (i.e., there net Exports of the Commodity), the value is represented as a positive value in the Foreign Trade column.  
• In contrast, if net Foreign trade (Exports less Imports) is negative (i.e., there are net imports of the Commodity), the value is represented as a positive value in the Foreign Trade row. 

IxI SOCIAL ACCOUNTING MATRIX

Because the IxC matrices map Industries’ purchases of Commodities and the examination of backward linkages necessitates Industry to Industry purchases, IMPLAN must convert Commodities to Industries. 

CONVERTING COMMODITIES TO INDUSTRIES

IMPLAN converts Commodities to Industries. Commodities in IMPLAN are numbered using “3000” plus the Industry number that is the primary producer of that Commodity.  There can be multiple producers and purchasers for a Commodity, and some Commodities can be stored in inventory and sold in a later year. Therefore, Commodity Output can be tied to production by one or more Industry and/or sales by one or more Institution (which includes Inventory). Utilizing the Make Matrix allows IMPLAN to determine how to split Commodity production among the various Industries and Institutions, and thus move from an IxC SAM to an IxI SAM. 

INTERPRETATION OF IxI SAM

The interpretation of the IxI SAM is nearly identical to that of the IxC SAM except that Commodity production has been reassigned from the Commodity rows to the rows of the producing Industries and Institutions. Thus, there will be payments by Industry to Institution rows, representing the purchase of goods and services from those Institutions, and the payments to Institutions will include not just transfer payments but also the purchase of goods and services produced by those Institutions.  The Capital Institution, for example, will see additional payments to itself that are not present in the IxC SAM. The Capital Institution produces Scrap and Used and secondhand goods, which, when purchased by an Industry, is represented in the IxI SAM as a payment from that Industry to the Capital row; these payments represent the purchase of Scrap and Used and secondhand goods, not capital investment. There are no payments to Capital in IMPLAN that represent capital investment.

RELATED ARTICLES

Understanding IMPLAN Social Account Reports

Final Demand: Measures of GDP and Value Added

 

¹ http://www.bea.gov/national/pdf/mp5.pdf

²Personal current taxes are payments, net of refunds, made by persons that are not chargeable to business expense. Personal current taxes consist of taxes on income, including realized net capital gains, taxes on personal property (not for homes but other high-value items like boats and cars), payments for motor vehicle licenses, and several miscellaneous taxes, licenses (e.g., hunting and fishing licenses), and fees. Social Security and Medicare taxes are excluded from personal current taxes.  They are treated as an employer (or employee or self-employed) contribution for government Social Insurance.  Personal current taxes also exclude taxes on real property, sales taxes, and certain penalty taxes. Taxes on real property paid by persons, except those primarily engaged in the real estate business, are treated as a business expense that is deducted from both gross monetary rental income and gross imputed rental income in the derivation of net rental income. Real property taxes paid by persons primarily engaged in the real estate business are also treated as a business expense and are deducted in the derivation of proprietors’ income. Sales taxes are included in personal consumption expenditures. Penalty taxes such as the penalty tax on early IRA withdrawals are treated as a personal current transfer payment to government (source: BEA’s Local Area Personal Income and Employment Methodology, April 2012).

³Since home-ownership is treated as an Industry, payment of real estate property taxes comes out of the owner-occupied dwelling sector’s TOPI.

 

Written August 30, 2024