WIOD (World Input-Output Database): Brief Overview of Data Construction

Activities in WP3

Bart LosFaculty of Economics and Business

University of Groningen

(WIOD Consortium Meeting Sevilla, 25-27 May, 2011)

This project is funded by the European Commission, Research Directorate General as part of the 7th Framework Programme, Theme 8: Socio-Economic Sciences and Humanities.

Grant Agreement no: 225 281

Deliverables (Period 1)

3.1 Panel of preliminary International Supply and Use Tables with use broken down by origin domestically produced or imported (by partner country)

3.2 Time-series of preliminary World Input-Output Tables with use broken down by origin

Period from 1995 to 2006 40 countries 35 industries and 59 products

Scheduled for month 12, delivered in month 17

National Supply and Use Table (output of WP1)

Total

Rest of World

Total supply by product (S)

Total input by industry

Imports (M)

Value added (VA)

Exports (E)

Total use by

product (U)

Industry Domestic supply

(SD)

Total output by industry

(GO)

Product

Intermediate use (I) Domestic final use (F)

Supply Intermediate use Final useProduct Industry

Includes use of imported products

International Supply and Use Table (for country A)

Rest of World (RoW)

Final use

Output

Total supplyValue added

Total use of imports

Intermediate use of

imports

Re-exports

of imports

Total use of

domestic output

Domestic final use of

domestic output

Total SupplyProduct

Intermediate use

Industry

country A

Industry Domestic

supply

Product

Rest of World (RoW)

Domestic final use of imports

country A

Product Intermediate use of

domestic output

Imports

Exports

Problems in Previous Versions of the Dataset (I)

Row and column sums were not always equal: has been solved, problem was due to mistake in aggregation of various consumption categories and various investment categories;

Domestic use of intermediates derived as residual (total use minus estimated imports), in limited number of cases negatives appeared. Due to split of imports by end use. If imports of

intermediates (in trade data) are very high, they could exceed total use in one or more using industries;

Problems in Previous Versions of the Dataset (II)

Solution (for now): assume that import ratios are uniform across all using industries and final use categories.

Negatives only appear if total imports exceed total use minus exports. Solution: difference is assumed to be due to re-exports (e.g. imports of electronics into the Netherlands). In such cases, domestic use = 0…

Next step, use of information (if available) from benchmark import transactions tables and/or benchmark imported use tables in GRAS-like procedure (see below).

Problems in Previous Versions of the Dataset (III)

Negative Exports to “Rest of the World” 1995: 28% of entries 2006: 36% of entries

Cause: Determination of exports to ROW as residual (total exports from Use table – exports to WIOD countries). Various inconsistent sources of trade data

Attempt at solution: Express international SUTs in FOB-prices, by estimating/imputing a CIF/FOB margins-matrix and tariffs matrix (by product and country pair) and subtracting these from the cells with imports In a later stage, these will be added to transport services products.

World input-output table (3 regions, industry-by-industry type)

Final domestic

use

Final domestic

use

Final domestic

use

Intermediate use

Intermediate use

Intermediate use

Country B

Final use of domestic

output

Rest of World

Final use by RoW of

exports from A

Final use by RoW of

exports from B

Output in RoW

Final use by B of exports

from A

Final use of domestic

output

Final use by B of exports from RoW

Country ACountry B

Industry

Intermediate use by B of

imports from RoW

Rest of World

Industry

Intermediate use by RoW of imports from

A

Intermediate use by RoW of imports from

B

Intermediate use of

domestic output

Country B

Rest of World (RoW)

Industry

Industry

Intermediate use of

domestic output

Industry

Country A Output in A

Final use of domestic

output

Total

Industry

Final use by A of exports

from B

Final use by A of exports from RoW

Intermediate use by B of

imports from A

Country A

Output in AValue added

Output in B

Output in RoW

Intermediate use by A of

imports from B

Intermediate use by A of

imports from RoW

Intermediate use of

domestic output

Value addedOutput in B

Value added

Tot Exp

Yellow: based on imports in CIFRed: exports in FOBGreen: obtained as residual (one column!)

Remaining Negative Exports to the Rest of the World…

Results for 2005: negatives by industry (max=40)

MiningLeather and footwear

MachineryTrade

Real estate services

Renting of Machinery: Germany -129 billions of US$

Remaining Negative Exports to the Rest of the World…

Results for 2005: negatives by country (max=35)

US

LUX MLT

SVN

CAN

GER: total -200 billion US$

GRAS-like Procedure to Estimate Import Ratios

n industries 2x Cons 1x GFCF 1x Invent 1x Exp Total m prod TU [uij] TU [uij] TU [uij] TU [uij] E [ei] ti m prod DU [(1-rij)uij] DU [(1-rij)uij] DU [(1-rij)uij] DU [(1-rij)uij] E [ei] di m prod IU [rijuij] IU [rijuij] IU [rijuij] IU [rijuij] RE [reij] ii

TU: Total use; DU: Use of domestically produced products; IU: Use of imported products; E: Exports; RE: re-exports.Shaded cells refer to known sets of values. Underlined variables are known.

*ln)/ln( ijj ijijj ijrrerr

10 ijr

iij ijij reiur

Minimize

,subject to:

Issues regarding estimation of ratios

Changes in inventories now treated as changes in domestically produced products

In benchmark IO and Use tables, imports also contribute to changes in inventories Information about treatment of changes in inventories by

NSIs does not give sufficient information about most appropriate way to deal with these in our context.

Merge information from end use classification with information from benchmark import tables, or leave it out?

Deliverables WP3

D3.3 (Preliminary WIOTs in constant international prices), month 21: ready, available on website

D3.4 (Preliminary integrated and consolidated IOTs for major regions), month 21: not ready, but can be done quickly. Decision on country aggregation needed. Proposal:

1. EU-272. North America (USA/CAN)3. Latin America (MEX/BRA)4. Developed Asia (JPN/KOR/TWN)5. Emerging Asia (CHN/IDN/IND)6. Rest of the World (RUS/TUR/ROW)