Redefinitions are a practice performed by the Bureau of Economic Analysis (BEA) when they release their Benchmark I-O tables (released every 5 years). The BEA provides our source of industry production function data, and therefore largely dictates the list of IMPLAN industries.
IMPLAN follows the BEA practice and redefines our annual data following the BEA’s redefinitions matrix. The redefinition matrix is at the U.S. level only.
Whenever IMPAN data points don’t match a non-IMPLAN data point about an industry (following IMPLAN's definition of the included NAICS Codes), the most common reason is due to "redefinitions".
Redefinitions are important because they provide a more accurate picture of the local economy and lead to more accurate estimates of Indirect Effects.
Redefinitions are made when the input structure for a secondary product of a business differs significantly from the input structure for the primary product of that business. In such cases, the output, employment, etc. of the secondary product is “redefined” by moving it from the industry in which it originates to the industry in which it is primary.
- Hotel-owned restaurant activity is moved from the hotel industry to the appropriate restaurant industry.
- Hotel casino activity is moved from the hotel industry to the gambling industry.
- Scientific research and development activity conducted by hospitals is moved from the hospital industry to the scientific research and development services industry
- Construction activities performed by all industries are redefined to the construction industries
Other industries’ purchases of these redefined activities are also moved. Any industry purchasing restaurant meals will do so from the restaurant industry, not the hotel industry, for example.
Secondary products of an industry that are produced using inputs that are similar to those used to produce the industry’s primary product are not redefined. For example, milk and cheese have very similar inputs requirements, so cheese, a secondary product (or byproduct) produced in the fluid-milk industry, is included in the output of the fluid-milk industry in the make and use tables.
Written August 14, 2020