1 / 98

INFO 7470/ECON 7400/ILRLE 7400 Measuring Business and Economic Activity

INFO 7470/ECON 7400/ILRLE 7400 Measuring Business and Economic Activity. John M. Abowd and Lars Vilhuber with contributions by Jim Davis, Brent Moulton and Wayne Gray February 18, 2013. Outline. Structure of the economic statistics in the U.S. The National Income and Product Accounts

satin
Download Presentation

INFO 7470/ECON 7400/ILRLE 7400 Measuring Business and Economic Activity

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. INFO 7470/ECON 7400/ILRLE 7400 Measuring Business and Economic Activity John M. Abowd and Lars Vilhuber with contributions by Jim Davis, Brent Moulton and Wayne GrayFebruary 18, 2013

  2. Outline • Structure of the economic statistics in the U.S. • The National Income and Product Accounts • Industry and Product Classification • Input/Output Tables • The Economic Census • The Business Register • Economic Surveys INFO 7470, please do not reproduce without attribution

  3. Economic Statistics in the U.S. Department of Commerce Department of Labor Bureau of Labor Statistics Wage, salary, compensation, prices, productivity • Economics and Statistics Administration • Census Bureau • Economic Censuses • Annual, Quarterly, Monthly Surveys of Sectors and Indicators • NAICS, NAPCS • Bureau of Economic Analysis • Inputs from Census + BLS + Fed + many other sources • National accounts, International trade, Regional accounts, Industry accounts, Financial accounts, Integrated accounts INFO 7470, please do not reproduce without attribution

  4. What are the National Accounts? • One of the most watched sets of statistics worldwide • Standards developed by many national statistical agencies • Simon Kuznets was awarded the 1971 Nobel Memorial Prize in Economics for his development of national income accountinghttp://www.nobelprize.org/nobel_prizes/economics/laureates/1971/ • The National Income and Product Accounts (NIPAs) are a set of economic accounts that track economic flows within the U.S. economy • Two key NIPA measures are: • Gross Domestic Product (GDP): Measures the total value of goods and services produced within the U.S. in a period • Gross Domestic Income (GDI): Measures the incomes earned and the costs incurred in producing those goods and services • http://bea.gov/national/pdf/nipa_primer.pdf INFO 7470, please do not reproduce without attribution

  5. The Circular Flow Income Labor Businesses Households Goods and services Expenditures INFO 7470, please do not reproduce without attribution

  6. NIPA Seven-account Summary • Domestic Income and Product Account • Private Enterprise Income Account • Personal Income and Outlay Account • Government Receipts and Expenditures Account • Foreign Transactions Current Account • Domestic Capital Account • Foreign Transactions Capital Account INFO 7470, please do not reproduce without attribution

  7. GDP As Value Added • Value added is measured as: Output less intermediate consumption Both measured at market prices • Example: Wheat to flour to bread to you • GDP is value of bread • Equals sum of value added of farmer, miller, baker, grocery store • GDP • Sum of industry value added • Also equals sum of final expenditures • Also equals sum of income earned in production INFO 7470, please do not reproduce without attribution

  8. Detail of Bread Example INFO 7470, please do not reproduce without attribution

  9. Personal consumption expenditures Gross private domestic investment Net exports of goods and services Government consumption expenditures and gross investment Compensation of employees, paid Taxes on production and imports Less: Subsidies Net operating surplus Consumption of fixed capital Account 1: Domestic Income and Product Gross Domestic Income Gross Domestic Product INFO 7470, please do not reproduce without attribution

  10. Expenditure components of GDP (2012) GDP = C + I + G + X - M = GDP INFO 7470, please do not reproduce without attribution

  11. Personal consumption expenditures Gross private domestic investment Net exports of goods and services Government consumption expenditures and gross investment Compensation of employees, paid Taxes on production and imports Less: Subsidies Net operating surplus Consumption of fixed capital Gross domestic income Statistical discrepancy Account 1: Domestic Income and Product Gross Domestic Product Gross Domestic Product INFO 7470, please do not reproduce without attribution

  12. Income Components of GDP (2012) = GDP INFO 7470, please do not reproduce without attribution

  13. Personal consumption expenditures Gross private domestic investment Net exports of goods and services Government consumption expenditures and gross investment Value added by business Value added by households and institutions Value added by government Account 1: Value Added Equivalence Gross Domestic Product Gross Domestic Product INFO 7470, please do not reproduce without attribution

  14. Value Added Components of GDP (2012) = GDP INFO 7470, please do not reproduce without attribution

  15. Features of national accounts • Inflation-adjusted (“real” GDP) • Quarterly frequency • Seasonally adjusted • Annualized INFO 7470, please do not reproduce without attribution

  16. Estimation Cycle • “Advance” estimates are released about 31/2 weeks after a calendar quarter concludes • “Preliminary” and “final” estimates are released 30 and 60 days after the advance INFO 7470, please do not reproduce without attribution

  17. Annual Revisions and Benchmarking • “Annual revisions” are released in July of non-comprehensive revision years • “Comprehensive revisions” occur about every 4-5 years (most recent: 2010) INFO 7470, please do not reproduce without attribution

  18. Featured Measures • Real GDP growth, as indicated by the percent change in the chain-type quantity index • Contributions to real GDP growth reflect the role that individual components of GDP play in producing the growth in GDP • Gross domestic purchases price index (and personal consumption expenditures price index)—inflation measures that reflect prices of goods and services purchased by U.S. residents INFO 7470, please do not reproduce without attribution

  19. Other Important GDP-related Measures • Current-dollar GDP represents the value of production at a point in time • GDP percentage shares provide a measure of the size and importance of a component INFO 7470, please do not reproduce without attribution

  20. Chained-Dollar GDP • Chained-dollar GDP is the product of current-dollar GDP in the reference year and the GDP quantity index (divided by 100) • Chained-dollar components do not add to the total • See “Chained-Dollar Indexes” from the November 2003 Survey of Current Business INFO 7470, please do not reproduce without attribution

  21. NBER Recessions Real GDP growth INFO 7470, please do not reproduce without attribution

  22. Source Data: Economic Census • Primary source data for benchmark input-output accounts • Estimates supply of products by industry and use of products by industry and final expenditures • Critical because it provides details necessary to separate intermediate consumption from final expenditures http://www.bea.gov/industry/io_annual.htm INFO 7470, please do not reproduce without attribution

  23. Annual Survey Source Data • Annual Retail Trade Survey • Personal consumption expenditures (PCE) for goods; inventories • Services Annual Survey – PCE services • Annual Survey of Manufactures • Investment in equipment; inventories • Value of construction put in place – structures • Annual Trade Survey – inventories • Foreign trade data • Government Finances Survey INFO 7470, please do not reproduce without attribution

  24. Example: Equipment Investment “Commodity flow” method: • ASM data on shipments of detailed durable goods product categories • Subtract those going to intermediate uses • Add imports: “domestic supply” • Subtract goods going to exports, government, PCE • Add margins • Result is estimate of private investment in equipment INFO 7470, please do not reproduce without attribution

  25. Example: Retail Trade • Sales by retail industry • Merchandise lines (products) data by industry from last economic census • Estimate products, controlling the total to total retail sales for categories selling primarily to consumers • Deflate using detailed CPIs • Result is estimate of PCE for goods INFO 7470, please do not reproduce without attribution

  26. Quarterly Source Data Census indicator surveys: • Manufacturers’ Shipments, Inventories, and Orders (M3): shipments and inventories for equipment investment, manufacturing inventories • Monthly retail trade for PCE goods, retail inventories • Wholesale trade inventories • Value put in place for structures • Foreign trade data INFO 7470, please do not reproduce without attribution

  27. Data Issues • Business births may not be promptly captured or included in samples. • Non-participation in voluntary surveys may be problem • Economic Census is mandatory • Annual, quarterly and monthly surveys are not • Respondents may not follow instructions. • Example: may report worldwide shipments or inventories INFO 7470, please do not reproduce without attribution

  28. Diagnosing Data Problems • Statistical discrepancy is high level indicator of problems • Monitor revisions: persistent large revisions or revisions in the same direction • Research on data issues INFO 7470, please do not reproduce without attribution

  29. The Economic Census and Business Register • Overview of provenance • Economic Census • Methods • Classifications • Business Register • Record structure • Identifiers • Creating establishment analysis files • Creating Company (Alpha) Files • Using bridges to other data INFO 7470, please do not reproduce without attribution

  30. INFO 7470, please do not reproduce without attribution

  31. Economic Census (EC) 2012 • Target population • Employer and non-employer establishments in covered industries (essentially everything except agriculture and government) • Methods • Large employers and a sample of small employers covered by mail questionnaire • Remaining establishments estimated from administrative records (mostly tax returns) INFO 7470, please do not reproduce without attribution

  32. Methods for the Economic Census • The EC is a mandatory survey of business establishments • Because sampling is used for small entities in all industries, it is not technically an enumeration • Main objective is to capture information needed to measure business volume (sales) and operations in detail that permits • Frame updating for the Business Register and business sampling frames • Intermediate goods consumption in support of value added concepts for the national accounts INFO 7470, please do not reproduce without attribution

  33. Economic Activity Classifications • North American Industry Classification System (NAICS) http://www.census.gov/eos/www/naics/ • Updated for each Census since 1997 (2002, 2007, 2012) • Jointly maintained by the U.S. Economic Classification Policy Committee (OMB, BEA, BLS, Census) • Main classification system for economic activity • Sectors, Sub-sectors (3-digits), Industry groups (4-digits), Industry (5-digits), Country-specific codes for U.S., Canada, Mexico (6-digits) • North American Product Classification System • Within each NAICS classifies the products produced in trilateral (all three countries) or country-specific • Still in development INFO 7470, please do not reproduce without attribution

  34. Economic Census Files in RDC * Not in RDC data warehouse ** Included in Services *** 2012 in the field https://www.census.gov/ces/dataproducts/economicdata.html INFO 7470, please do not reproduce without attribution

  35. Questionnaires and Procedures • 1997 Economic Census forms http://www.census.gov/epcd/www/ec97form.html • 2002 and 2007 Economic Census formshttp://bhs.econ.census.gov/bhs/pages/formarchive.html • 2012 Economic Census formshttp://bhs.econ.census.gov/ec12/php/census-form.php • History of the 1997 Economic Census http://www.census.gov/prod/ec97/pol00-hec.pdf • Procedural history of the 2002 Economic Census http://www.census.gov/prod/ec02/ec02-00r-hist.pdf • History and archive of the 2007 Economic Censushttp://www.census.gov/econ/census07/www/methodology/history.html • Operational guide to the 2012 Economic Censushttp://bhs.econ.census.gov/ec12/index.html INFO 7470, please do not reproduce without attribution

  36. Employer Business Register (BR) • Target Population: • Employer establishments in the same industries as are covered by the Economic Census • Methods: • Continuously updated database of establishments divided into multi-unit and single-unit businesses INFO 7470, please do not reproduce without attribution

  37. Maintenance of the BR • Businesses are classified based on whether or not they have multiple establishments as of the last Economic Census (MU and SU, resp.) • Currently approximately 160,000 MU companies with 1.8 million affiliated establishments; 5 million SU establishments; 21 million non-employer businesses INFO 7470, please do not reproduce without attribution

  38. Maintenance of the BR II • Known MU companies surveyed in the Report of Organization Survey to update structure between Economic Censuses • “Discovered” MU companies (respondents to surveys) added to ROS frame between censuses • Weekly updates by Employer Identification Number from business income tax returns and information reports • SU: used directly • MU: allocated based on information from the ROS INFO 7470, please do not reproduce without attribution

  39. Record Structure • Economic Census • All establishments whether from mail questionnaire or administrative record • Separate files for Construction, Manufactures, Mining, Retail Trade, Services, (Transportation, Communications, and Utilities), Wholesale Trade • Example files are from Census of Manufactures INFO 7470, please do not reproduce without attribution

  40. Record Structure • Employer Business Register Single-units (SU) • One record for each single unit establishment • One record, called a submaster, for each multiunit company • Employer Business Register Multi-units (MU) • One record for each establishment for each multi-unit • Report of Organization Survey http://bhs.econ.census.gov/2002forms/nc99002.pdf (2002)http://bhs.econ.census.gov/bhs/cos/form.html (most recent) INFO 7470, please do not reproduce without attribution

  41. Identifiers • Entity Identifiers • Census File Number (CFN) • Employer Identification Number (EC: EI; BR: EIN) • Permanent Plant Number (PPN) • LBD number (LBDNUM) (LBD-version specific) • Census Alpha (EC: EIALPHA; BR: derived) INFO 7470, please do not reproduce without attribution

  42. Census File Number (CFN) • Used for both the EC and BR as the sort order and main index for the file • Always Character 10 ($10.) • For Single-units • First character “0” • Last 9 characters Federal Employer Identification Number (EIN) • For Multi-units • First character nonzero • First six characters Census Alpha • Last four characters establishment ID INFO 7470, please do not reproduce without attribution

  43. Employer Identification Number • Taxable (legal) entity identifier • Always Character 9 ($9.) • For SUs, equivalent to CFN and unique • For MUs, applies to the owning entity • An Alpha (see below) may be associated with multiple EINs INFO 7470, please do not reproduce without attribution

  44. Permanent Plant Number • Longitudinal link based on CFN • Always Character 10 ($10.) • Quality improves since inception in 1982 • Longitudinal links from Longitudinal Business Database are preferable (LBDNUM) (Jarmin and Miranda) INFO 7470, please do not reproduce without attribution

  45. Census Alpha • Identifies the business that owns (50% or greater interest) the establishment for MUs • EC and BR-SU • Character 6 ($6.) and never has a leading 0 • Called EIALPHA • BR-MU • Character 10 ($10.) • Called ALPHA • Used to construct enterprise-level entities INFO 7470, please do not reproduce without attribution

  46. Business Register Redesign • 2002 Business Register redesigned • SURVU_ID replaced CFN • SURVU_TYPE • MU/SU • ARU = Alternative reporting unit • SBM = EIN level reporting • File Structure • Base/Misc • Line/Trailer – line code (LCODE) observations • Historical identifiers (e.g., CFN, PPN) carried forward for continuers • Newer versions of microdata have LBDNUM INFO 7470, please do not reproduce without attribution

  47. Identifiers • Geography Identifiers • State identifiers • County identifiers • City identifiers • Full Census geography (BR only) • Activity Identifiers • Industry Codes (NAICS, SIC) • Product Codes INFO 7470, please do not reproduce without attribution

  48. Geography Identifiers • EC and BR • State (Census and FIPS) • County (Census and FIPS) • Consolidate Metropolitan Statistical Area (FIPS) • BR only • Census Block • Zip • County Business Patterns Geography INFO 7470, please do not reproduce without attribution

  49. Geography Identifiers • Contemporaneous geographic definitions • Virginia city-counties INFO 7470, please do not reproduce without attribution

More Related