The definitions below clarify terms used in this data product and related materials.

Bulk Commodities

Generally, bulk commodities are high-volume, low-value unprocessed agricultural commodities, which are treated as though they are homogeneous in nature prior to processing. Grains, oilseeds, cotton, and raw (unprocessed) tobacco are considered bulk commodities. Contrasting agricultural categories are high-value processed products, semiprocessed products, and fresh horticultural products.

Closed Model

Also known as partially closed model.

Direct Effects

Direct effects are a measure of the impacts of economic activity occurring within the exporting sector (i.e., the farm or processed food sector). See also open model.

High-Value Commodities

High-value food products are nonbulk commodities that either require special handling, such as fresh produce, or are processed, which adds substantial value beyond the farm level. Processed foods are edible foodstuffs that have been transformed from their original post-harvest states to either semiprocessed products (e.g., flour and meal) or final products (e.g., bread and breakfast cereal).

I/O Analysis

Analysis that uses the information contained in benchmark year accounting tables to provide a snapshot of the interrelationships between the sectors of an economy. I/O analysis can be used to quantify the entire impact of a given economic activity (e.g., exporting) on a given area (e.g., the United States).


The effects of a given economic activity (e.g., exporting) reported in terms of jobs, income, or output.

Indirect Effects

Indirect effects are a measure of the impacts of supporting economic activity from other sectors generated by the exporting activity (i.e., services or trade). See also open model.

Induced Effects

Induced effects reflect the economic impacts associated with new activity that will use previously unused resources or production. For example, jobs added by producers to support new higher levels of exports increase household income, industrial activity, and national gross domestic product. This income generates more spending, which necessitates more production. See also partially closed model.

Input-Output (I/O) Accounts

Benchmark tables published by the U.S Department of Commerce, Bureau of Economic Analysis show the production of goods and services and the transaction flows of goods and services between different producing sectors of the economy and to different components of final use. These tables enable ERS and other economists to perform I/O analysis and are the basis of the ATM calculator. The benchmark I/O tables are prepared primarily from census data.

Labor Productivity

Labor productivity refers to the relationship between output and the labor time used in generating that output. As a measure of economic efficiency, it shows how effectively economic inputs (labor) are converted into output. Productivity is measured by comparing the amount of goods and services produced with the inputs that were used in production.


The U.S. Department of Commerce defines margin or margin costs as "The value of the trade services provided in delivering commodities from producers' establishments to purchasers, where the purchaser pays for the services," which reflects the value of transportation and wholesale-and-retail-trade services. In an I/O framework,margins are expressed as a percentage of the export value at the port level. For this data product, margins are national averages of the costs associated with shipping, handling, and distributing commodities for export. One can more accurately measure the multiplier impact of exporting commodities or products by applying the correct margins to the appropriate producer, transportation, and wholesale-and-retail-trade sectors' employment and/or output.


An output multiplier is a summation of the effects of $1 of demand for a particular commodity from a particular industry. In this data product, demand is for agricultural exports. The employment multipliers in this data product are expressed in terms of jobs per billion dollars of agricultural exports. The multipliers correspond with a particular commodity, the use of an open or partially closed I/O model, and the stage of the export process (i.e., producer or port).

Open Model

An open model measures the direct and indirect effects of an economic activity (exports); that is, the impacts of sales and purchases between all goods and service sectors of the economy; sales to final demand (consumption, investment, government, and net exports); and purchases of land, labor, and capital services. Open model multipliers are best suited to describe what has already happened in an economy or the interrelatedness of sectors in a base period.


For an industry or nation, output is the value or cost of all the intermediate inputs and costs of production to an industry or nation plus the value of the income or gross domestic product generated in that industry or nation. See the definitions used by the U.S Department of Commerce, Bureau of Economic Analysis for gross domestic product and gross output.

Partially Closed Model

A partially closed model, sometimes called a Miyazawa model, measures the direct, indirect, and induced effects of an economic activity (exports); that is, the impacts of sales and purchases between all goods and service sectors of the economy; sales to final demand (investment, government, and net exports); purchases of land, labor, and capital services; and the income that is generated by industry to households and the consumption demanded by households because of that income. It is appropriate to use partially closed I/O models only when estimating impacts associated with new economic activity that uses unused resources or production.

The model is "partially closed" because household income and personal consumption expenditures are endogenous, or inside of the modeling system. Some economic activities, such as investment, government purchases, and net exports remain exogenous, or outside of the system. In an open model, which measures only direct and indirect economic activities, all economic final demands, including consumption, are exogenous. In a fully closed model, all final demands, including net exports, are endogenous.

Port-Value Multiplier

Port-value multipliers include the farm or manufacturing sector's value, in addition to the shipping, handling, and storage charges associated with moving the product from the producer or manufacturer to the port. The portions of the multiplier that apply to the producer (farm, food processing, or other manufacturing sector) value are calculated separately. To this, the jobs or value related to wholesale and retail trade is added, as well as the value or jobs associated with shipping the commodity from the farm or producing sector to the port. These pieces combined constitute one multiplier.

Price Index

A price index is an average of several prices representative of the commodity group for which an adjustment for changing prices is being made. The weight given each representative commodity is fixed at a given base-year level. See methodology for how the model handles yearly price changes.

Producer-Value Multiplier

A producer-value multiplier includes just the activity embodied in the commodity as it leaves the farm gate or manufacturer's door. It would be proper to apply this type of multiplier at the finished product stage of production but before shipping and handling charges have been added at the port to the value of an export.

Last updated: Thursday, February 07, 2013

For more information contact: Suresh Persaud

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