Dummy Industries

Definition

Dummy Industries. Dummy industries are used to simplify the process of estimating transactions (that is, inputs of commodities used by industries and final users) by grouping related items that are generally assumed to be purchased in the same proportion by many different industries.

Purchases of these related items are consolidated under one dummy industry, rather than being treated as purchases of individual items. Then, before the I-O table is balanced, weights can be calculated for every item in the dummy industry, and these weights applied to every purchase of the dummy commodity in order to break out these purchases into their component items.

Example

Office supplies are used by all industries, and some data exist for the value of office supplies purchased by industries. The purchases of office supply items - paper, pens, staples, etc. - are consolidated, and shown as purchased by the dummy industry “office supplies” and other industries are shown buying the dummy commodity “office supplies” rather than the individual office supply items.