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I have been trying to build a social accounting matrix (SAM) after building an input-output table (IOT). In the IOT, I had to distinguish between total intermediate demand (which includes import of intermediate products) and domestic intermediate demand (which excludes imports). Therefore, I had to look at trade data to perform a breakdown of imports per intermediate and final products.

I was wondering if SAMs also used this breakdown of imports information. Since IOTs are used as a source of information to build a SAM, I figured it would. I know SAMs include intermediate demand information (see the following image, it's called intermediate inputs), but I don't know if it refers to total demand or domestic demand. Does anyone know?

Thanks in advance!

A social accounting matrix

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It depends on the structure of the particular SAM, although in the case of the diagram you've provided, intermediate inputs should include any imports (as should final demand and exports - in other words, you should be using the Combined Use table to populate this SAM, not the Domestic Use table).

You can work this out by looking at the commodity balance identity. Rows of the SAM must sum to the same total as the corresponding column of the SAM. For commodities, the SAM structure requires:

Domestic sales + Tariffs + Imports = Intermediate inputs + Final Demand + Exports

i.e. total supply of commodities = total use of commodities (note that this is also the row balancing condition for the Supply-Use tables). Since imports are included on the left hand side, they need to be included on the right hand side as well.

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  • $\begingroup$ In that case, are Domestic Use tables not needed at all to build a SAM? $\endgroup$ – Sarah May 29 at 13:56
  • $\begingroup$ The domestic use table itself is not needed for this SAM, however, you may need the valuation matrices which link the combined use at purchasers' prices and the domestic use at basic prices tables to ensure that things like margins and indirect taxes/subsidies on products are incorporated correctly into the SAM while maintaining the balancing identities. $\endgroup$ – Gary May 29 at 18:02

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