5216.0 - Australian National Accounts: Concepts, Sources and Methods, 2000
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Contents >> Chapter 9: The input-output framework >> The input-output context

The input-output context

9.7 In national accounting and economic analysis two kinds of input-output tables (or matrices) are referred to:

• S-U tables; and
• symmetric input-output tables.

9.8 The S-U tables are sometimes referred to as rectangular input-output tables, make and use tables, supply and disposition of products, etc. In the ASNA, the term 'S-U tables' is used. The symmetric input-output tables are also often termed 'square' (input-output) tables or matrices, Leontief-type input-output tables (matrices), etc. The square symmetric tables are either product-by-product or industry-by-industry. In this chapter the term 'tables' is used rather than 'matrices', and the terms 'product-by-product' tables and 'industry-by-industry tables' are used to describe tables in which the rows and columns both relate to products, or industries, respectively.

9.9 The concepts and definitions in the S-U tables are the same as elsewhere in the ASNA.

9.10 The S-U and input-output tables also adopt the accounting rules of the ASNA, i.e. the definitions, conventions, etc., which are employed with respect to transactions and transactors apply equally to the input-output framework.

9.11 Issues of particular importance to the input-output tables include:
• statistical units; and
• the distinction between principal, secondary and ancillary activities;

both of which are discussed below.

Statistical units for input-output

9.12 Institutional units may engage in several different kinds of productive activities simultaneously. For the detailed analysis of production, the system therefore recommends that they should be partitioned into separate establishments, each of which engages in only a single kind of productive activity at a single location. Industries are then defined as groups of establishments engaged in the same kind of productive activities. Ideally, the industries in the system would be composed of establishments that are homogeneous production units.

9.13 A unit of homogeneous production is defined as a producer unit in which only a single (non-ancillary) productive activity is carried out. However, the unit of homogeneous production is not normally observable and is more an abstract or conceptual unit underlying the symmetric (product-by-product) input-output tables.

9.14 To be operational for statistical compilation purposes the establishment needs to be sufficiently distinct as a production unit to supply meaningful information. For the S-U tables, the system needs a unit which can be observed and for which data can be collected. Furthermore, the choice of units is often dictated by the units which are being used in source data collections.

Principal, secondary and ancillary activities

9.15 When an establishment engages in more than one kind of activity, by reference to a given classification of activities, it is necessary to observe the fundamental distinction between principal and secondary activities on the one hand and ancillary activities on the other:

• the principal activity of an establishment is the activity for which gross value added exceeds that for any other activity carried out within the same unit;
• a secondary activity is an activity carried out within a single establishment in addition to the principal activity; and
• an ancillary activity is a supporting activity which is undertaken in order to create the conditions within which the primary and secondary activities of an enterprise can be carried out.

9.16 The establishment unit used for the sequence of accounts for industries may include principal as well as secondary productive activities within it, although secondary activities should be separated as far as practically possible. The further treatment of secondary production is one of the central issues met in the construction of symmetric input-output tables.

9.17 Ancillary activities typically produce outputs of services which are used as inputs into almost all kinds of productive activities, and their values are likely to be small compared with those of the principal and secondary activities of the enterprise. Consequently, they are treated as integral parts of the principal or secondary activities with which they are associated. In a production account and input-output context, ancillary activities are treated as follows:
• outputs of ancillary activities are not explicitly recognised and recorded in the system;
• inputs into ancillary activities are treated as inputs into the principal and secondary activities which they support; and
• value added is not identified separately as it is combined with that of the principal and secondary activities. However, satellite analysis might try to identify inside the producing units some ancillary activities and their output.

9.18 In addition, output of an industry may include more than a single product when two or more products are produced simultaneously by a single productive activity as 'joint products' (e.g. molasses linked to the production of sugar; natural gas linked to crude oil). Joint products may be distinguished as the principal product (by largest proportion) and the by-product (or by-products). In practice, by-products are often treated in the same way as secondary products in the input-output framework.

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