How do we handle special commodities (Customs Duties,RoWadjust,Noncomparable imports) present for accounting purposes?

[WesIngwersen]

Some commodities are present only for accounting/balancing purposes and do not represent tangible commodities. These include:

1. Customs duties, 4200ID
2. Noncomparable imports, S00300
3. Rest of the world adjustment, S00900

Definitions from BEA IO manual (2009)

1. Customs duties (not defined in IO manual) Was previously included in Wholesale.
2. Rest-of-world-adjustment - "values for exports and imports that have offsetting adjustments to personal consumption expenditures (PCE) and government" (7-9)
3. "Noncomparable imports 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) services imports that are unique, such as payments for the rights to patents, copyrights, or industrial processes; and (3) services imports that cannot be identified by type, such as payments by U.S. companies to their foreign affiliates for an undefined “basket” of services. These imports are distributed directly to industries and to final users (see table 7.5).16 This distribution, by industry group, is based on Department of Defense direct defense expenditures data, on BEA surveys covering direct investment (affiliated foreigners), and on other BEA surveys (unaffiliated foreigners) for royalties, license fees, and other private services."

RESOLVED. Remove these sectors but need to verify that we can validate the model after removal.

[MoLi7]

CEDA does not include these commodities.

The industry and commodity output are recalculated after removing these sectors from Make and Use tables.

[MoLi7]

Similar to #6 , there are tradeoffs to include these commodities.

My opinion is that we could keep them in the US for the purpose of economic balance, then removing them when integrating the US data with MRIO framework. See more information in my detailed notes.

[WesIngwersen]

RoW adjustment and Custom Duties do not contribute to industry output.

Custom Duties is only 1 positive value in the imports column of the Use table. It does contribute to commodity output.

RoW adjustment has a large negative value for PCE and a large positive value for exports and a small positive value for imports. It has a small contribution to commodity output.

[jvendries]

I added a spreadsheet in the USEEIO-CEDA methods reconciliation folder that shows commodity used as a percent of total industry consumption for each of the following commodities:

Scrap, Used and secondhand goods, Noncomparable imports, and RoW Adjustment (see image below).

This is mostly to provide a quick visual reference of which industries these commodities might impact the most depending on how we choose to treat them, as these might not be intuitive (e.g., secondhand goods representing almost 30% of the total inputs to industry 812200, deathcare services). The image shows a cutoff of |0.05| of total inputs but there are more industries that represent values between 1-5% in the spreadsheet.

[WesIngwersen]

I did something similar and reported it in the scrap discussion but only did this for scrap and I used total intermediate inputs.