How could you partition Household Food Expenditures into Producing Industries?

Question

From the 2019 Consumer Expenditure Survey, the average household annual food expenditure was $8,169 for that year. There are subcategories such as "Food at Home" and "Food away from Home," but for simplicity, I'll keep the scope to annual household food expenditures.

I want to partition this $8,169 into the BEA industries (aggregation level is "summary") for the ultimate goal of assessing pollution impact. That is, if buying bread is related to a farm purchasing harvesting equipment, maybe some of those dollars should be allocated towards both farms and industrial machinery.

Here are a few immediately relevant BEA industry summaries:

• 111CA: Farms
• 113FF: Forestry, Fishing & Related activity (the fish is sold to markets?)
• 311FT: Food and Beverage & tobacco
• 445: Food and Beverage Stores
• 722: Food services and Drinking places

In my studies of the Leontief Input/Output model, one thought is just to pile all $8,169 into 311FT and let the "recipe" tell me how much that 111CA contributed, but that feels contradictory since it predicts 0 final demand at the household level for 111CA, when clearly that industry has a large GDP number.

So what is the best way to "attribute" the household expenditures on food into those industries?

Answer 1

You should try to avoid mixing data sets unless you have a good way to bridge them. There are very precise methodologies used to construct each data set and mixing them can lead to nonobvious problems. You might consider looking at the BEA's IO tables at a more disaggregated level. For example, the Use table shows Personal Consumption Expenditures at a granularity that you might be interested in. For example, in the screenshot below it shows that in 2012, households consumed \$32 billion worth of goods from the "Vegetable and melon farming" product category.

At this level of disaggregation, you can see how much households purchased from different kinds of product categories: restaurant goods, from frozen foods, from snack food manufacturing, etc. You can also see how much each of these industries purchased from each other product type category, etc. Continuing with the example, you'll see that the Vegetable and melon farming industry purchased \$106 billion worth of goods from "Farm machinery and equipment manufacturing" product category.

Note that I haven't stated that the Vegetable and melon farming industry necessarily produces goods in the Vegetable and melon farming product category. To get that information, you would have to explore the BEA supply tables. For those interested, more information is in the answer to this other question: https://economics.stackexchange.com/a/47689/59

Hope this helps.

The link to the spreadsheet from the BEA is given here: https://apps.bea.gov/industry/xls/io-annual/Use_SUT_Framework_2007_2012_DET.xlsx