1. State and Metropolitan Area Gross Domestic Product: What, Why, and When? Clifford H. Woodruff III PNREAP Workshop Reno, NV September 29, 2009

2. www.bea.gov 2 What Is GDP by State and Metropolitan Area?  Measure of market value of final goods and services  State or metropolitan area counterpart to the nation’s GDP  GDP may be measured in three ways  Value-added (or production) approach  Income approach  Expenditures approach

3. www.bea.gov 3 How Do We Measure GDP by State?  Income approach  Compensation of employees  Taxes on production and imports less subsidies  Gross operating surplus  Corporate profits and proprietors’ income  Depreciation  Rental income  Net business interest, miscellaneous payments

4. www.bea.gov 4 Comparison of Regional GDP and Personal Income  Common components  Wages and salaries, employer contributions, and proprietors’ income  In Personal Income, not GDP  Dividends, personal interest, Social Security benefits, Medicare, Medicaid  In GDP, not Personal Income  Taxes on production, corporate profits

5. www.bea.gov 5 Why Are Regional GDP Statistics Important?  Most comprehensive measure of a region’s economy  Distribute federal funds  Used for tax analysis  Used for state budget forecasting  Used for regional policy planning

6. www.bea.gov 6 The GDP-by-State Series  Current-dollar GDP by State  Compensation of employees  Taxes on production and imports less subsidies  Gross operating surplus  Real (chained-dollar) GDP by State  Advance GDP by State

7. www.bea.gov 7 Real (chained-dollar) GDP by State  Uses national implicit price deflators for industries  Assumes sales are at national prices  Better than simply deflating by national GDP deflator but does not explicitly account for regional price variation

8. www.bea.gov 8 What GDP-by-State Data Are Available?  Advance statistics for 2008 on NAICS basis  Current and real dollars, quantity indexes  21 industries at sector level  1997-2007 on NAICS basis  Current dollars by income component  Real dollars and quantity indexes by industry, no components  64 industries at sub-sector level

9. www.bea.gov 9 What GDP-by-State Data Are Available?  1963-1997 on SIC basis  Current dollars by income component  1990-1997 real dollars and quantity indexes by industry, no components  63 industries at approximately two-digit level

10. www.bea.gov 10 The GDP-by-Metropolitan-Area Series  Current-dollar GDP by Metropolitan Area  Real (chained-dollar) GDP by Metropolitan Area  Accelerated GDP by Metropolitan Area

11. www.bea.gov 11 What GDP-by-Metropolitan-Area Data Are Available?  Accelerated statistics for 2008 on NAICS basis  Current and real dollars, quantity indexes  21 industries at sector level  2001-2007 on NAICS basis  Current and real dollars, quantity indexes  64 industries at sub-sector level

12. www.bea.gov 12 When Are the Regional GDP Statistics Released?  GDP by State in June  Advance data for previous year  Revised data for previous three years  GDP by Metropolitan Area in September  Accelerated data for previous year  Revised data for previous three years  September 2009 is different  Schedule differs for a comprehensive revision

13. www.bea.gov 13 How To Use the Regional GDP Statistics  To compute a region’s or industry’s growth rate  Use real, inflation-adjusted, data (caveat)  Not current-dollar data  To compute an industry’s or component’s share of GDP  Use current-dollar data  Not real, inflation-adjusted, data

14. www.bea.gov 14 Contact  Clifford H. Woodruff III  Chief, Regional Product Branch  Regional Product Division  Bureau of Economic Analysis  cliff.woodruff@bea.gov cliff.woodruff@bea.gov  202-606-9234