U.S. transportation satellite accounts for 1992

Survey of Current Business, April, 1998 by Bingsong Fang, Xiaoli Han, Ann M. Lawson, Sherlene K.S. Lum

This article introduces the transportation satellite accounts (TSA'S), which are an extension of the U.S.-input- output (I-O) accounts.(1) Satellite accounts rearrange information from the basic economic accounts for the purpose of analyzing important economic activities more completely than is otherwise possible. They expand the analytical capacity of the basic accounts without overburdening them with details or interfering with their general-purpose orientation. The TSA'S were jointly developed by the Bureau of Transportation Statistics (BTS) of the U.S. Department of Transportation and the Bureau of Economic Analysis (BEA).(2) In 1994, BEA introduced a set of prototype economic and environmental satellite accounts and a satellite account for research and development expenditures; BEA is also developing satellite accounts for travel and tourism that will be introduced in a few months.(3)

Like other satellite accounts, the TSA'S provide a more comprehensive measure of an economic activity by bringing together components of that activity wherever they occur throughout the economy, including activities which are internal to the firm and for which there are no observable prices. In this case, the activity is transportation, and the intrafirm transportation activities identified in the TSA'S include, for example, the transportation activities that are conducted by a grocery company's truck fleet when it moves goods from warehouses to the retail outlets of the grocery store chain. The TSA'S identify and aggregate such transportation activities whether they are purchased from other firms or performed by other units in the same firm and present the data on both an industry and a commodity basis.

The TSA'S are based on and are an extension of the I-O accounts. They are the result of rearranging the 1992 I-O data using additional information from other sources of transportation data so as to provide a unified picture of the impact of transportation on the U.S. economy. The TSA'S cover both the transportation activities conducted on a for-hire basis, which are identified as transportation within the published I-O accounts, and those conducted by businesses for their own use, which--though included--are not separately identified as transportation activities in the I-O accounts. The estimates from the TSA'S, therefore, have several major advantages for transportation analyses.

First, the TSA estimates provide a more comprehensive measure of all transportation activities, both in terms of their contribution to the economy and their use of inputs from other industries in the economy. For example, the value added of transportation industries as defined in the TSA'S represents 5.0 percent of gross domestic product (GDP) in 1992. In contrast, the total value added of all transportation industries identified in the I-O accounts is 3.1 percent of GDP for the same year.(4) In addition, the TSA'S show that transportation industries used $33.2 billion of petroleum products in 1992, while the I-O accounts show that transportation industries used $21.6 billion of these products in the same year.

Second, the TSA estimates show more accurately the total use of transportation across industries, as shown in table 1. For example, in the 1-0 estimates, the largest user of transportation was manufacturing ($80.2 billion, 21.0 percent), followed by motor freight and warehousing ($35.0 billion, 9.2 percent), services ($21.5 billion, 5.6 percent), and air transportation ($14.4 billion, 3.8 percent). In the TSA estimates, the largest user was still manufacturing ($102.0 billion, 18.7 percent), but the next largest user was services ($63.5 billion, 11.6 percent), followed by construction ($52.2 billion, 9.6 percent) and wholesale and retail trade ($51.8 billion, 9.5 percent).

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Third, the TSA estimates on transportation are not affected by changes in the way transportation is provided, and therefore they provide a more reliable representation of transportation in the economy. For example, when a grocery company contracts out its internal trucking operations to a common carrier trucking company, the 1-0 estimates show an increase in the output of transportation; when the company switches back to its internal operations for its trucking needs, the 1-0 estimates show a decrease in the output of transportation. In contrast, the TSA estimates remain unchanged in both cases.

The first section of this article explains why the TSA'S were developed. The second section provides a conceptual overview of the TSA'S, including their relationship to the 1-0 accounts. The third section describes the major components of the TSA's. The fourth section provides a methodological overview of the estimation and derivation of the TSA's. The final section summarizes the TSA estimates for 1992.

Background

Current statistics on transportation from the 1-0 accounts and other data sources do not provide a comprehensive and consistent view of transportation activities in the economy. Specifically, the 1-0 accounts separately identify only transportation that is provided on a for-hire basis--that is, services provided by common carriers of freight and passengers--but not those that are provided by a business for its own use--for example, delivery of furniture by a retailer using either an owned or leased truck.