Deliverable 2.2.2 Compilation of National SAM for EU27 ... · Compilation of National SAM for EU27...

* Contact Author: Dr. Marc Müller, AGRITRADE, Edificio Expo – C/ Inca Garcilaso, 3- E-41092 SEVILLA -

Tel : 34 95 448 8348 - Fax : 34 95 448 84 34

AGRITRADE

Support to Agricultural Trade

and Market Policies

Deliverable 2.2.2

Compilation of National SAM for EU27 Member States

Marc Müller1)

, Hannu Törmä2)

, Katarzyna Zawalinska2)

1) European Commission, Institute for Prospective Technological Studies

2) Ruralia Institute

DRAFT VERSION

Keywords

Social Accounting Matrix, Input-Output Table, Regional CGE, RegFin, EuroStat data

2

1 Project Background

Within the CAPRI-RD project, the planned regional database will have to meet the

requirements of the Finnish multi-regional CGE RegFin, which was developed at the

University of Helsinki, Ruralia institute (Törmä and Zawalinska, 2007), and also applied for

Poland. CAPRI-RD foresees the application of the RegFin structure for EU27 at NUTS2

regional level ("RegEU27").

Until now, AGRITRADE could succeed in producing IOT in the required format for the

EU27 Member States on national level for the year 2000. This work was mainly done by

combining industry-by-industry IOT developed at the former C&S Unit of JRC-IPTS (see

also Rueda-Cantuche et al, 2009) with EuroStat datasets. For an outline of the compilation

steps, see section 3.

2 Target Structure of the RegEU IOTs

The regional CGE RegFin is essentially built on Input-Output Tables that follow an industry-

by-industry scheme, comparable to EuroStat tables naio_cp18 (URL:

http://epp.eurostat.ec.europa.eu/portal/page/portal/esa95_supply_use_input_tables/data/databa

se; see also EuroStat (2008), pp. 315). The model's IOT are supplemented by data on

monetary flows between regional and national institutions. Table 2 provides an overview on

the relevant sub-matrices of the regional IOT.

The left half of the IOT contains the expenditures of the industries for intermediate inputs (V),

the payments for the fixed factors labor, land, and capital (Fp), the corresponding taxes on

factor usage (TFp), the imports (Ms) by industry and origin (other regions of the same country

or other countries), aggregate taxes on production (TA) and finally total supply (X). The

upper right quadrant contains the uses of the sectoral outputs, namely private and

governmental consumption (C, split by regional and national government), investment

demand (I) and exports to other regions or other countries (E).

The sub-matrix Fr distributes the fixed factor revenues across households and governments,

where governments do not necessarily have to receive these payments (shaded area) as they

can be collected by the household accounts and distributed to local and national government

via transfer accounts in the lower-right quadrant (TD). Factor tax revenues (TFr) have to be

distributed across the governments.

An important feature of this IOT scheme is that the consumption accounts (C, I, E) refer to

output from domestic industries, such that the usage of imported goods has to be listed

separately (Mi). The lower-right quadrant mainly consists of inter-institutional transfers like

direct income taxes and transfers between households and local/national governments (TD),

transfers between the governments (TG), or the financing of investments with private and

public savings (S). The empty cells in this area indicate that they can be computed residually.

During the CAPRI-RD kick-off meeting, a preliminary scheme of the productive sectors and

institutions to be included in the final regional CGE database was discussed. Pragmatic

considerations are of importance due to the fact that IOTs for roughly 270 regions will be

3

compiled, which creates a huge demand for data on NUTS2 scale. It was agreed that at least

agriculture, forestry, construction, and hotel-and-restaurant services should be treated as

single sectors, others as aggregates depending on the availability of the regional data from

EuroStat. The separate treatment of an "education" sector was suggested, but this appears to

be not supported by regional EuroStat datasets: Although the national IOT allow the separate

treatment of an 'education' sector, the available regional data (see section Error! Reference

source not found.) provide only information for an aggregate service sector (sectors L to P in

ESA nomenclature, see Table 1). Furthermore, although it would be desirable to distinguish

several types of households, it was agreed to settle for the time being with only one aggregate

private household, but the separation of at least an "agricultural household" will be kept in

mind.

Table 1 Sectoral Classifications for RegEU27 and Correspondence with ESA95

ESA95(NACE/CPA) Proposed RegEU classifications

Description Code Code Description

Agriculture, hunting and forestry A

Agriculture, hunting and related services a01 AGR Agriculture

Forestry, logging and related services a02 FOR Forestry

Fishing B OPP Other primary production

Mining and quarrying C OPP Other primary production

Manufacturing D

Food products and beverages da15 FOP Food processing

Coke, refined petroleum products and nuclear fuels df23 ENE Energy products

Other manufacturing … MAN Other manufacturing

Electricity, gas and water supply E ENE Energy products

Construction F CNS Construction Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods G TTR Trade and Transport

Hotels and restaurants H HOR Hotels and Restaurants

Transport, storage and communication I TTR Trade and Transport

Financial intermediation J OSE Other services

Real estate, renting and business activities K OSE Other services Public administration and defence; compulsory social security L OSE Other services

Education M OSE Other services

Health and social work N OSE Other services

Other community, social, personal service activities O OSE Other services

Activities of households P OSE Other services

* Contact Author: Dr. Marc Müller, AGRITRADE, Edificio Expo – C/ Inca Garcilaso, 3- E-41092 SEVILLA - Tel : 34 95 448 8348 - Fax : 34 95 448 84 34

Table 2 Structure of a RegEU27 IOT

Note: The prefix "S_" stands for "sector", see Table 1


Tel : 34 95 448 8348 - Fax : 34 95 448 84 34

Apart from the aggregation of the originally 27 sectors featured by RegFin, two additional

rows were added to meet the requirements of RegEU: LAND and LNDTAX, both remain

empty for the time being as the focus of this paper here is to replicate the original IOT based

on EuroStat data.

It is very important to note here that the RegEU27 IOTs follow a strict industry-by-industry

(or activity by activity) scheme: Column-wise the expenditures of each sector are represented,

either for intermediate inputs from other sectors (S_ accounts), for primary factors (LABOR,

CAPITAL), or taxes (TAXPROD). Of particular relevance here is the row "FORIMP" as

this represents the expenditures for intermediate demand from non-domestic origin, which is

not distinguished by type of import. The same applies for the consumption expenditures of the

private and public institutions (CONEHOUS, CECGOV, CLOCGOV, GFCFINV), as they

pay sector-wise for the consumption of domestic origin, but as an aggregate for the

consumption of imported goods.

Row-wise the revenues of the productive sectors are listed, be it either from other sectors or

institutions. Again, it has to be clear that these revenues refer to the total amount of money

received from selling the total output to either other sectors or institutions, it does not refer to

any type of commodity ("the aggregate commodity produced by the n-th sector").

The structure in Table 2 may be represented in a simplified manner in the following way:

S

Where:

S: national or regional IOT

A: s×s sub-matrix of intermediate inputs

F: f×s sub-matrix of fixed factor payments

Ts: (f+1)×s sub-matrix of factor taxes and taxes on production)

M: w×s sub-matrix of imports by trade partner

x: 1×s sub-matrix of total supply

C: s×d sub-matrix of final consumption (private and government)

I: s×1 sub-matrix of investment demand

E: s×w sub-matrix of exports

T: (2f+1+w)×(d+1+w) sub-matrix of inter-institutional transactions

6

3 Compilation of National SAMs

The datasets used for the compilation of RegEU IOTs are discussed in the following. Table 3

gives an overview on the datasets used and the last download date. The subsequent sections

provide a more detailed discussion on the contents and location of the used files.

It has to be noted that it is necessary to create a user account on the EuroStat homepage to

retrieve the bulk datasets and to have the screens appearing as shown in the screenshots.

Table 3 Used Data Sets and Downloaded Files

Source Code File name(s) Last download

Comments

EuroStat naio_cp17 naio_cp17.tsv 22.01.2009

Input-output table at basic prices; NACE/CPA 3-digit level (59 sectors)


Input-output table for domestic output at basic prices; NACE/CPA 3-digit level (59 sectors)


Input-output table for imports at basic prices; NACE/CPA 3-digit level (59 sectors)

EuroStat nama_fcs_c nama_fcs_c.tsv 10.09.2008 Final consumption aggregates

EuroStat nasa_simplif nasa_simplif.tsv 11.09.2008

Non-financial annual sector accounts

Rueda-Cantuche et al 2009 ipts_cns

Input-output table for domestic output at basic prices; NACE/CPA 3-digit level (59 sectors)

3.1 Annual National Accounts from EuroStat

The annual national accounts provide a comprehensive amount of macroeconomic indicators

related to GDP composition calculated from expenditure and income side, plus a huge amount

of auxiliary indicators like employment and population statistics. Furthermore, it is possible to

obtain supply-side information for 31 sectors (e.g. compensation of employees, intermediate

demand, and gross output). Unfortunately, the information is spread across various files as

indicated in Figure 1. Of particular interest for the exercise presented here are the final

consumption aggregates (nama_fcs_c, green box),

7

Figure 1 Annual National Accounts: NAMA

Source: Screenshot from EuroStat homepage: URL:

http://epp.eurostat.ec.europa.eu/portal/page/portal/national_accounts/data/database

3.2 Annual Sector Accounts from EuroStat

The annual sector accounts (NASA) contain in principle the same information as the annual

national accounts, but provide additional data on flows between sectors, domestic institutions,

and the 'rest or the world'. In this respect, NASA is the only source for e.g. factor incomes

from abroad, transfers received by households and direct taxes paid by enterprises and

households. Furthermore, all information is available in one file (nasa_simplif), which

contains a simplified version of the full sequence of monetary flows, which is still sufficient

for the national IOTs.

Figure 2 Annual Sector Accounts: NASA


http://epp.eurostat.ec.europa.eu/portal/page/portal/national_accounts/data/database

8

3.3 Supply, Use, and Input-output Tables from EuroStat

IOTs are provided by EuroStat either as a symmetric IOT at current prices (naio_cp17)

without distinction of origins of total supply (imported or domestic) or as separated tables

(naio_cp18, naio_cp19). It appears that naio_cp18 is the table underlying the RegFin datasets,

which is also a basic data source for the IOT compiled by Rueda Cantuche et al (2009).

Figure 3 Supply, Use, and Input-output Tables: NAIO


http://epp.eurostat.ec.europa.eu/portal/page/portal/esa95_supply_use_input_tables/data/database

9

3.4 Compilation of RegFin IOT based on EuroStat data

First step: Mapping of EuroStat accounts with RegEU accounts. Table 4 illustrates the

mapping of the sector accounts, table 5 the mapping of other accounts.

Table 4 Correspondence between ESA95 and RegEU sector accounts

ESA95(NACE/CPA) Proposed RegEU classifications


Agriculture, hunting and related service activities a01 S_AGR Agriculture

Forestry, logging and related service activities a02 S_FOR Forestry Fishing, operating of fish hatcheries and fish farms; service activities incidental to fishing b05 S_OPP Other primary production

Mining of coal and lignite; extraction of peat ca10 S_OPP Other primary production Extraction of crude petroleum and natural gas; service activities incidental to oil and gas extraction excluding surveying ca11 S_OPP Other primary production

Mining of uranium and thorium ores ca12 S_OPP Other primary production

Mining of metal ores cb13 S_OPP Other primary production

Other mining and quarrying cb14 S_OPP Other primary production

Manufacture of food products and beverages da15 S_FOP Food processing

Manufacture of tobacco products da16 S_MAN Other manufacturing

Manufacture of textiles db17 S_MAN Other manufacturing Manufacture of wearing apparel; dressing and dyeing of fur db18 S_MAN Other manufacturing Tanning and dressing of leather; manufacture of luggage, handbags, saddlery, harness and footwear dc19 S_MAN Other manufacturing Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials dd20 S_MAN Other manufacturing

Manufacture of pulp, paper and paper products de21 S_MAN Other manufacturing

Publishing, printing and reproduction of recorded media de22 S_MAN Other manufacturing Manufacture of coke, refined petroleum products and nuclear fuels df23 S_ENE Energy products

Manufacture of chemicals and chemical products dg24 S_MAN Other manufacturing

Manufacture of rubber and plastic products dh25 S_MAN Other manufacturing

Manufacture of other non-metallic mineral products di26 S_MAN Other manufacturing

Manufacture of basic metals dj27 S_MAN Other manufacturing Manufacture of fabricated metal products, except machinery and equipment dj28 S_MAN Other manufacturing

Manufacture of machinery and equipment n.e.c. dk29 S_MAN Other manufacturing

Manufacture of office machinery and computers dl30 S_MAN Other manufacturing

Manufacture of electrical machinery and apparatus n.e.c. dl31 S_MAN Other manufacturing Manufacture of radio, television and communication equipment and apparatus dl32 S_MAN Other manufacturing Manufacture of medical, precision and optical instruments, watches and clocks dl33 S_MAN Other manufacturing

Manufacture of motor vehicles, trailers and semi-trailers dm34 S_MAN Other manufacturing

Manufacture of other transport equipment dm35 S_MAN Other manufacturing

Manufacture of furniture; manufacturing n.e.c. dn36 S_MAN Other manufacturing

Recycling dn37 S_MAN Other manufacturing

Electricity, gas, steam and hot water supply e40 S_ENE Energy products

Collection, purification and distribution of water e41 S_MAN Other manufacturing

Construction f45 S_CNS Construction Sale, maintenance and repair of motor vehicles and motorcycles; retail sale services of automotive fuel g50 S_TTR Trade and Transport Wholesale trade and commission trade, except of motor vehicles and motorcycles g51 S_TTR Trade and Transport Retail trade, except of motor vehicles and motorcycles; repair of personal and household goods g52 S_TTR Trade and Transport

10

Hotels and restaurants h55 S_HOR Hotels and Restaurants

Land transport; transport via pipelines i60 S_TTR Trade and Transport

Water transport i61 S_TTR Trade and Transport

Air transport i62 S_TTR Trade and Transport Supporting and auxiliary transport activities; activities of travel agencies i63 S_OSE Other services

Post and telecommunications i64 S_OSE Other services Financial intermediation, except insurance and pension funding j65 S_OSE Other services Insurance and pension funding, except compulsory social security j66 S_OSE Other services

Activities auxiliary to financial intermediation j67 S_OSE Other services

Real estate activities k70 S_OSE Other services Renting of machinery and equipment without operator and of personal and household goods k71 S_OSE Other services

Computer and related activities k72 S_OSE Other services

Research and development k73 S_OSE Other services

Other business activities k74 S_OSE Other services Public administration and defence; compulsory social security l75 S_OSE Other services

Education m80 S_OSE Other services

Health and social work n85 S_OSE Other services Sewage and refuse disposal, sanitation and similar activities o90 S_OSE Other services

Activities of membership organisation n.e.c. o91 S_OSE Other services

Recreational, cultural and sporting activities o92 S_OSE Other services

Other service activities o93 S_OSE Other services

Private households with employed persons p95 S_OSE Other services

Table 5 Correspondence between other ESA95 and RegEU accounts (National Scale)

ESA95 Proposed RegEU classifications


Rows of IOTs

Compensation of employees d1 LABOR Labor

Operating surplus, net b2n_b3n CAPITAL Capital

Consumption of fixed capital k1 CAPITAL (?) Capital

Use of imported products, cif p2i FORIMP Foreign imports

Imports cif intra EU 1) p7_s21 DOMIMP Domestic imports

Imports cif extra EU 1) p7_s22 FORIMP Foreign imports

Columns of IOTs Financial intermediation services indirectly measured (FISIM) p119 IFINSER Estimated bank charges Final consumption expenditure by households p3_s14 CONEHOUS Consumption exp. of households Final consumption expenditure by non-profit organisations serving households (NPISH) p3_s15 CONEHOUS Consumption exp. of households Final consumption expenditure by government p3_s13 CLOCGOV Consumption exp. of local gov.

Gross capital formation p5 GFCFINV Gross fixed capital formation and changes in inventories

Exports intra EU fob 1) p6_s21 DOMEXP Domestic exports

Exports extra EU fob 1) p6_s22 FOREXP Foreign exports

Notes: 1) Imports from extra or intra EU (p7_s21, p7_s22) are mapped, but they do not

appear in naio_cp18. Instead, the account for "Use of imported product" (p2i) was

included.

11

The treatment of intra-EU trade as domestic trade (e.g. Imports cif extra EU -> DOMIMP)

was done in case an EU-wide CGE with the Member States as regions would be developed in

an early stage of the project as a test model. For the final RegEU, extra- and intra-EU trade

will be treated as foreign trade, with domestic trade only referring to the intra-national flows.

Governmental payments were mapped into the accounts for the local government, not the

central government also with reference to the idea of a EU-wide model with Member States

as regions. Again, the treatment will be different for the final RegEU model.

Based on these correspondences, the domestic input-output tables were transformed into the

targeted format.

First mapping:

Eq. 1) , , , ,

_ 18r c r i i j j c

j i

S G naio cp G

In case the IOT from Rueda-Cantuche et al (2009) are used, the mapping is done accordingly:

Eq. 2) , , , ,

_r c r i i j j c

j i

S G ipts cns G

Where:

i,j: Accounts of ESA95 IOTs

r,c: Row- and column accounts of targeted RegEU IOT

S: Targeted RegEU IOT

G: Aggregator matrix, basically the correspondence sheets (Tables 4 and 5)

Note: Indexes for years and Member State were omitted to improve the readability.

Distribution of factor income to aggregate household:

Eq. 3) ,CONEHOUS ,sf f

s

S S

Where:

f: Index for primary factors (LAND, LABOUR, CAPITAL)

s: Index for sectors (table 4)

Deriving taxes of production residually and adding to governmental revenues:

Eq. 4) , , ,TAXPROD s s cnt rnt s

cnt rnt

S S S

Eq. 5) , ,TAXPROD CLOCGOV TAXPROD s

s

S S

Where:

12

rnt,cnt: row and column accounts without totals

Including purchases on the domestic territory by non-residents:

Eq. 6) C O N SO R EG H ,C O N EH O U S 34

_ _p

S nama fcs c

Eq. 7) C O N SO R EG H ,FO R EX P 34

_ _p

S nama fcs c

Public investment from EuroStat:

Eq. 8) , , 5 , 13

_SAVLGOV GFCFINV PAID p s

S nasa simplif

Eq. 9) , , 5 , 13

_SAVLGOV GLOCGOV PAID p s

S nasa simplif

Private investment calculated residually:

Eq. 10) , ,SAVRCONS GFCFINV rnt GFCFINV

rnt

S S

Eq. 11) , ,SAVRCONS CONEHOUS SAVRCONS GFCFINV

S S

Direct income taxes:

Eq. 12) , , 5 , 13

_LOCINCTAX CLOCGOV RECEIVED d s

S nasa simplif

Eq. 13) , , 5 , 13

_LOCINCTAX CONEHOUS RECEIVED d s

S nasa simplif

Direct income transfers:

Eq. 14) , , 7 , 13

_LOCINCSUB CLOCGOV PAID d s

S nasa simplif

Eq. 15) , , 7 , 13

_LOCINCSUB CONEHOUS PAID d s

S nasa simplif

Net borrowing:

Eq. 16) , ,NEBRCONS CONEHOUS rnt CONEHOUS

rnt

S S

Eq. 17) , ,NEBLGOV CLOCGOV rnt CLOCGOV

rnt

S S

Balancing trade accounts:

Eq. 18) , , ,BALFTRA FOREXP FORIMP cnt rnt FOREXP

cnt rnt

S S S

13

In general, it was possible to compile the required tables on national scale with a rather

limited effort. Although the figures on income taxes, subsidies, and investment supply differ

from the original, the bulk of the included figures are similar to the RegFin data.

When comparing the original RegFin table and the one derived from EuroStat data, it appears

that "Labor Taxes" (LABTAX) are missing, as this type of taxes is not distinguished in the

used EuroStat datasets. The figures for Finland in table 2 were calculated by using an average

22.9% tax rate for labour input. Average tax rates will also be available for other Member

States. If not, the differences between the categories “wages and salaries” (d11 in ESA95

classification) and “compensation of employees” (d1, see Table 5) will be used to calculate

labour taxes.

What could be a major concern is the treatment of imports as the categories FORIMP and

DOMIMP do not provide information on the types of imports, particularly agricultural

imports, which would be a logical link to CAPRI. It could be a solution to expand FORIMP

and DOMIMP in this respect:

FORIMP_agriculture

FORIMP_other

DOMIMP_agriculture

DOMIMP_other

The needed information can be obtained from the naio_cp19 datasets.

* Contact Author: Dr. Marc Müller, AGRITRADE, Edificio Expo – C/ Inca Garcilaso, 3- E-41092 SEVILLA - Tel : 34 95 448 8348 - Fax : 34 95 448 84 34

Table 6 RegEU IOT for Finland (2002), based on EuroStat data

Note: The prefix "S_" stands for "sector"


Tel : 34 95 448 8348 - Fax : 34 95 448 84 34

4 Main Findings

In general, it was possible to compile the required tables for the RegEU model on national

scale with a rather limited effort. The needed input-output tables and inter-institutional flows

could be taken directly from EuroStat, although not for the full set of EU27 Member States.

However, for the year 2000, a full set of IOT was published by Rueda-Cantuche et al (2009).

For the year 2005, 21 Member States’ IOT are available, some of which in MS-Excel format

which will require some additional computational treatment.

The deviations between the compiled tables and the RegFin database occurred mainly in the

sub-matrices where EuroStat’s NASA database was used. This refers mainly to the figures on

income taxes, subsidies, and investment supply. However, the differences in the input-output

part are small.

5 References

EuroStat (2008): Eurostat Manual of Supply, Use and Input-Output Tables. URL:

http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/publication?p_product_cod

e=KS-RA-07-013

Müller, M. and I. Pérez Domínguez (2008): Compilation of Social Accounting Matrices with a

Detailed Representation of the Agricultural Sector (AgroSAM). Presented at the 11th Annual

Conference on Global Economic Analysis, Helsinki, Finland

Rueda-Cantuche, J. M., J. Beutel, F. Neuwahl, I. Mongelli, and A. Loeschel (2009): A Symmetric

Input-Output Table for EU27: Latest Progress. In: Economic Systems Research 21(1):59-79

Törmä, H. and K. Zawalinska (2007): Technical description of the CGE RegFin/RegPol models.

University of Helsinki, RURALIA Institute. URL:

http://www.helsinki.fi/ruralia/research/manuals.htm

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