OVERVIEW

When Benchmark I-O Accounts are released, the Bureau of Economic Analysis (BEA) performs a practice called redefinitions. Redefinitions are a process to reassign commodities or products from an Industry that produces them as a secondary product (or byproduct) to the Industry that produces them as a primary product. IMPLAN follows the BEA practice and redefines our annual data following the BEA’s redefinitions matrix. 

WHY ARE REDEFINITIONS SO IMPORTANT?

Redefinitions are important because they provide a more accurate picture of the local economy​ and lead to more accurate estimates of Indirect Effects.

Redefinitions are made when the input structure for a secondary product of a business differs significantly from the input structure for the primary product of that business.​ ​In such cases, the Output, Employment, etc. of the secondary product is “redefined” by moving it from the Industry in which it originates to the Industry in which it is primary. ​

A few examples are:​

  • Hotel-owned restaurant activity is moved from the hotel Industry to the appropriate restaurant Industry.​
  • Hotel casino activity is moved from the hotel Industry to the gambling Industry.
  • Scientific research and development activity conducted by hospitals is moved from the hospital Industry to the scientific research and development services Industry.​
  • Construction activities performed by all Industries are redefined to the construction Industries​.

Other Industries’ purchases of these redefined activities are also moved​. Any Industry purchasing restaurant meals will do so from the restaurant Industry, not the hotel Industry, for example.

Secondary products of an Industry that are produced using inputs that are similar to those used to produce the Industry’s primary product are not redefined.​ For example, milk and cheese have very similar input requirements, so cheese, a secondary product produced in the fluid-milk Industry, is included in the Output of the fluid-milk Industry in the make and use tables.

RELATED ARTICLES & VIDEOS

Redefinitions Video

BEA 2012 Redefinitions Table

 

Written August 14, 2020

Updated June 20, 2024