Net Stock of Fixed Reproducible Tangible Wealth statistics

[In billions of dollars. As of December 31. For information on concepts and methodology, see summary below table or for more detail, see Fixed Reproducible Tangible Wealth in the United States, 1925-94, published in August 1999 or see http://www.bea.doc.gov/bea/an/wlth2594/maintext.htm



Item	1980	1981	1982	1983	1984	1985	1986	1987	1988	1989	1990	1991	1992	1993	1994	1995	1996	1997	1998



CURRENT DOLLARS
Net stock	10,297	11,325	11,932	12,350	13,034	13,731	14,636	15,494	16,465	17,404	18,225	18,649	19,411	20,418	21,637	22,630	23,707	24,826	26,179

Private	7,213	7,950	8,376	8,668	9,164	9,658	10,267	10,857	11,541	12,197	12,760	13,022	13,583	14,318	15,204	15,909	16,723	17,573	18,643

Nonresidential equipment and software	1,420	1,576	1,666	1,724	1,814	1,921	2,035	2,131	2,265	2,400	2,542	2,623	2,708	2,829	2,992	3,183	3,352	3,518	3,736
Information processing and related equipment	225	266	300	333	375	413	459	493	582	622	663	687	720	760	803	850	906	969	1,045
Computers and peripheral equipment	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	111	90	92	91	83	82	82	86	94	102	111	121
Communications equipment..	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	258	261	277	294	306	315	325	335	344	364	388	416
Instruments	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	73	91	100	112	122	133	144	154	165	175	184	193
Photocopy and related equipment.	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	50	46	49	52	54	57	61	66	69	72	72	71
Office and accounting equipment	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	(NA)	23	22	20	18	18	19	20	20	21	22	24
Industrial equipment	525	571	595	602	613	646	684	724	784	839	893	917	937	964	1,011	1,075	1,119	1,158	1,203
Transportation equipment	306	336	345	357	375	395	412	416	444	455	472	497	522	557	604	651	690	721	781
Other equipment	319	357	372	374	384	396	410	430	456	485	513	522	530	547	575	607	637	669	707
Nonresidential structures	2,256	2,570	2,737	2,809	2,980	3,136	3,264	3,443	3,670	3,885	4,081	4,138	4,279	4,499	4,739	4,941	5,175	5,437	5,714
Nonresidential buildings, excluding farm	1,169	1,312	1,437	1,532	1,656	1,787	1,927	2,067	2,216	2,373	2,514	2,576	2,676	2,817	2,992	3,125	3,286	3,489	3,722
Utilities	695	752	797	817	842	853	861	902	940	985	1,005	1,021	1,051	1,109	1,148	1,190	1,229	1,262	1,271
Residential	3,537	3,804	3,973	4,135	4,369	4,601	4,968	5,283	5,606	5,912	6,138	6,261	6,596	6,991	7,472	7,784	8,195	8,619	9,193
Housing units	2,898	3,103	3,232	3,353	3,540	3,730	4,026	4,300	4,567	4,801	4,963	5,047	5,315	5,653	6,059	6,302	6,625	6,960	7,451

Government	2,151	2,371	2,509	2,567	2,669	2,782	2,949	3,103	3,262	3,439	3,612	3,732	3,895	4,086	4,322	4,533	4,725	4,928	5,118

Equipment and software	300	322	346	367	412	425	437	447	479	516	559	590	619	645	672	686	692	692	696
Structures	1,952	2,154	2,262	2,292	2,362	2,464	2,612	2,753	2,783	2,923	3,053	3,142	3,276	3,441	3,651	3,847	4,033	4,236	4,422

Federal	653	709	753	791	827	856	896	930	986	1,040	1,087	1,130	1,176	1,229	1,279	1,314	1,343	1,364	1,380
Defense	483	502	527	550	601	613	630	641	676	712	743	773	807	842	874	885	891	890	888
State and local	1,498	1,662	1,756	1,776	1,842	1,927	2,053	2,173	2,276	2,399	2,525	2,603	2,719	2,857	3,043	3,219	3,382	3,565	3,737

Consumer durable goods	934	1,004	1,047	1,115	1,202	1,292	1,420	1,534	1,662	1,769	1,853	1,895	1,934	2,014	2,111	2,189	2,259	2,325	2,419
Motor vehicles	257	271	279	304	343	392	449	485	515	550	574	567	574	599	629	647	663	669	699
Furniture and household equipment	459	501	523	546	575	605	648	696	791	832	861	887	908	946	987	1,024	1,059	1,095	1,135
Other	203	216	225	237	253	268	293	327	355	386	417	441	452	470	495	519	537	560	585

CHAINED (1996) DOLLARS

Net stock	14,269	14,609	14,867	15,195	15,663	16,178	16,703	17,201	19,636	20,172	20,657	20,996	21,361	21,808	22,303	22,840	23,457	24,112	24,884

Private	9,950	10,227	10,429	10,664	10,996	11,346	11,684	12,003	13,893	14,243	14,562	14,790	15,033	15,345	15,694	16,075	16,521	17,005	17,570

Nonresidential equipment and software	1,855	1,928	1,966	2,008	2,092	2,178	2,252	2,311	2,579	2,658	2,723	2,770	2,826	2,915	3,036	3,183	3,354	3,550	3,799
Nonresidential structures	3,177	3,289	3,393	3,471	3,576	3,697	3,792	3,883	4,501	4,598	4,704	4,775	4,828	4,887	4,939	5,008	5,094	5,194	5,304
Residential	4,921	5,012	5,072	5,187	5,329	5,471	5,641	5,808	6,822	6,994	7,142	7,251	7,384	7,547	7,720	7,884	8,074	8,263	8,478

Government	3,127	3,169	3,207	3,253	3,310	3,382	3,462	3,541	4,006	4,095	4,192	4,284	4,371	4,445	4,512	4,585	4,668	4,743	4,822
Federal	969	970	974	985	1,000	1,022	1,047	1,076	1,245	1,268	1,291	1,308	1,322	1,327	1,326	1,326	1,334	1,329	1,327
State and local	2,156	2,196	2,230	2,264	2,307	2,357	2,411	2,466	2,761	2,827	2,901	2,976	3,049	3,117	3,185	3,259	3,334	3,415	3,495

Consumer durable goods	1,198	1,220	1,237	1,286	1,363	1,455	1,561	1,656	1,748	1,841	1,906	1,927	1,962	2,021	2,099	2,180	2,268	2,365	2,498

| Source: U.S. Bureau of Economic Analysis, Fixed Assets and Consumer Durable Goods in the United States, 1925-97 (forthcoming in early 2001); and Survey of Current Business, April 2000.

http://www.bea.doc.gov/bea/dn2.htm

* Methodology for Net Stocks and Depreciation

The primary measure of the value of fixed reproducible tangible wealth is the net stock, that is, the value of the stock adjusted for depreciation. Depreciation is the decline in value due to wear and tear, obsolescence, accidental damage, and aging. For business and government, in addition to its use in calculating net stocks, the same depreciationconsumption of fixed capitalis presented as part of the NIPA's. Consumption of fixed capital is a charge for the using up of fixed capital, and as such, it is, along with compensation of employees and other components of gross domestic income and gross national income, one of the costs incurred and the profits earned in the production of gross domestic product (GDP) and gross national product (GNP). Consumption of fixed capital is deducted from GDP and GNP to derive net domestic product and net national product. In addition, government consumption of fixed capital is a component of government consumption expenditures (and GDP) as a measure of the value of the services of government fixed assets.

The net stock estimates in this article are presented in terms of two valuationscurrent cost and real cost. Current-cost (or "replacement-cost") valuation expresses all assets in the net stock in terms of the prices that prevailed in the period to which the stock estimates refer. For example, the yearend 1995 net stock estimate in current-cost valuation shows the assets that were in the stock at yearend 1995 expressed at the market prices prevailing for those assets at yearend 1995. The real-cost estimates are expressed either as quantity indexes or in "real" dollars, with 1996 as the base period.

Overview of methodology

Estimates of net stock and depreciationunder both the new and old methodologiesare derived using the perpetual inventory method, which is based on the accumulation of investment flows. With this method, both the net stock and depreciation of any given type of asset is a weighted average of past investment in that asset. Specifically, the net stock is calculated as the cumulative value of past gross investment less the cumulative value of past depreciation. The initial calculations are performed in real terms; current-dollar values are estimated by reflation.

Calculations of net stocks and depreciation are based on real investment data at the type-of-asset level of detail, which generally is the same level of detail as that presented in NIPA tables 5.7, 5.9, and 5.15, and real consumer purchases of durable goods, which generally is the same level of detail presented in NIPA table 2.7. At this detailed level, real investment in a given type of asset is obtained by dividing current-dollar investment in that type by the price index for new assets of that type, expressed as 1996=100, multiplied by 100. (Real investment for higher levels of detail shown in the NIPA tables is calculated using BEA's chain-type annual-weighted indexes.)

Under the new methodology, most assets are assumed to have depreciation patterns that decline geometrically over time. For a given year, the depreciation charges on existing assets are obtained by multiplying the prior year's charge by one minus the annual depreciation rate. For each type of asset, depreciation is cumulated over all vintages, and net stocks are estimated by subtracting cumulative depreciation from cumulative gross investment.

As is the case for real investment, year-to-year growth rates for both depreciation and net stocks on a real-cost basis for higher level aggregates are then computed using the annual-weighted Fisher index. These rates are chained together to obtain cumulative growth rates, which in turn are used to obtain estimates of levels expressed as indexes (1996=100) and as chained (1996) dollars.

Current-cost estimates (in dollars) are obtained by "reflating" real estimates at the type-of-asset level. Depreciation is reflated to current cost using indexes that reflect average prices of new assets for the year; net stock is reflated to current cost using indexes of prices of new assets for the current yearend. Current-cost aggregates are obtained by directly summing current-cost estimates for the various types of assets. Finally, estimates by type of asset are adjusted for the net value of assets destroyed in wars and natural disasters.

Investment flows

The investment flows in new equipment and structures by type and the transfers of used assets used to implement the perpetual inventory method come from the revised NIPA's. For privately owned assets, investment by type of asset is distributed by industry and by legal form of organization, primarily through the use of data from BEA's benchmark input-output accounts for 1982 and 1987 and from the 1987 and 1992 Economic Censuses. These flows are modified to account for transfers of used assets between sectors of the economy. (Because of the lack of information, transfers of used assets within sectors are not accounted for in the wealth estimates.)

Depreciation patterns and depreciation profiles

In the perpetual inventory method, the pattern of depreciation charges for a given asset is determined by its "depreciation profile." The new methodology for estimating depreciation uses depreciation profiles that reflect a geometric pattern and that replace the previously used profiles, which were based on straight-line depreciation and on assumed patterns of retirements. The depreciation profile for a given type of asset describes the pattern of how, in the absence of inflation, the price of an asset of that type declines as it ages. Although the profile for a given type of asset is assumed to be constant over time, different vintages of a given type of asset may have profiles that differ from those of other vintages of the same type of asset.

The new net stock and depreciation methodology uses depreciation profiles that are based on empirical evidence on used asset prices. Ideally, the profiles for each type of asset should be estimated using prices for used assets in resale markets, but such studies have only been conducted for some types of assets. However, the available studies suggest that, in general, depreciation profiles are more closely approximated by a geometric pattern of price declines than by a straight-line pattern. Consequently, in the revised estimates, the depreciation profiles for most assets were assumed to be strictly geometric, and the appropriate rate of declining-balance depreciation was taken from empirical studies of similar classes of assets. The depreciation rates for specific types of assets were then determined by dividing the appropriate declining-balance rate for each asset by the asset's assumed service life. For autos and for computers and computer peripheral equipment, two classes of assets for which information on used asset prices makes it possible to estimate the underlying depreciation profiles, the actual empirical profiles were used. For computers and peripheral equipment, the profiles were taken from studies by Stephen Oliner. For missiles and nuclear fuel rods, depreciation was estimated using a straight-line pattern and a Winfrey retirement pattern, which is essentially a bell-shaped curve.

The new geometric depreciation rates and the associated declining-balance depreciation rates and service lives used by BEA to derive the new estimates of net stocks and depreciation are shown in table A. Except as previously noted, BEA's depreciation rate equals the declining-balance rate divided by the service life. The rate of declining-balance depreciation is the multiple of the comparable straight-line rate used to calculate the geometric rate of depreciation. For example, a 1.65 declining-balance depreciation rate refers to a geometric rate of depreciation of 1.65/L, where L is the service life of the asset in years and 1/L is the straight-line rate. Separate service lives are used for each type of asset and for the estimates of fixed private capital; separate service lives are also used in different industries for certain types of assets. Most of the service lives are held constant over time because the information necessary to estimate changes in them is not available. The lives themselves are based on a wide variety of sources and for most types of assets, are the same as those used for the previously published estimates.

* Wealth estimates

Fixed reproducible tangible wealth consists of fixed private capital, fixed government capital, and durable goods owned by consumers.

Fixed private capital consists of equipment and structures, including owner-occupied housing, that are owned by private business or nonprofit institutions and that are located in the United States.

Fixed government capital consists of equipment and structures that are owned by the Federal Government and by State and local government agencies, including government enterprises, and that are located in the United States (except for national defense equipment, for which coverage is worldwide).

Durable goods owned by consumers are the goods that are purchased by households for their nonbusiness use and that have a life expectancy of at least 3 years.

Capital stock consists of fixed private capital and fixed government capital.

All of the wealth estimates are classified by type of asset. In addition, estimates of fixed private capital are further classified by legal form of organization.

Corporate business consists of all entities required to file Federal corporate income tax returns (IRS Form 1120 series), including mutual financial institutions and cooperatives subject to Federal income tax, private noninsured pension funds, nonprofit organizations that primarily serve business, Federal Reserve banks, and Federally sponsored credit agencies.

Sole proprietorships consists of all entities that are required to file IRS Schedule C (Profits or Loss From Business) or Schedule F (Farm Income and Expenses) if the proprietor meets the filing requirements and of owner-occupied farm housing.

Partnerships consists of all entities required to file Federal partnership income tax returns, IRS Form 1065 (U.S. Partnership Return of Income).

Other private business consists of all entities that are required to report rental and royalty income on the individual income tax return in IRS Schedule E (Supplemental Income and Loss) if the individual meets the filing requirements, tax-exempt cooperatives, owner-occupied nonfarm housing, and buildings and equipment owned and used by nonprofit institutions that primarily serve individuals.

Estimates for fixed private capital are also presented by industry on the basis of the 1987 Standard Industrial Classification (SIC). Industry data are presented on an "establishment" basis; an establishment, as defined for the purposes of the SIC, is an economic unit, generally at a single location, where business is conducted or where services or industrial operations are performed.

In addition, the corporate business stock estimates are presented in two groups of SIC industries. Financial industries consists of the following SIC industries: Depository institutions, nondepository institutions, security and commodity brokers, insurance carriers, regulated investment companies, small business investment companies, and real estate investment trusts. Nonfinancial industries consists of all other private industries.

Estimates of residential capital are also classified by "tenure group"that is, tenant-occupied residential capital and owner-occupied residential capital. Tenant-occupied residential capital consists of rental housing, including all government-owned residential capital. Owner-occupied residential capital consists of housing occupied by private owners.

In the distributions of capital by type of owner, legal form of organization, and industry presented here, capital assets are classified on an ownership basis; that is, capital assets held under operating leases are recorded in the stock of the lessor, while capital assets held under capital leases are recorded in the stock of the lessee. The ownership basis is used in order to be consistent with the NIPA's and because the data necessary to compute capital stock estimates on a use basis are not available annually.

Estimates of fixed capital for the Federal Government are further classified by national defense and nondefense. National defense fixed capital consists of equipment and structures owned by the U.S. Department of Defense; it excludes family housing for the armed forces, civil works construction by the Army Corps of Engineers, industrial facilities, military hospitals, and the Soldiers' and Airmen's Home. Nondefense fixed capital consists of all other fixed capital owned by the Federal Government.

Gross investment, depreciation, net stock, and average age of net stock

Gross investment is the value of purchases of new fixed capital assets. For a given type of owner, it also includes net purchases of used assets from other types of owners (private business, governments, households, and nonresidents). Data are not available to adjust for transfers of used assets among industries or among legal forms of organization.

Depreciation is the decline in value due to wear and tear, obsolescence, accidental damage, and aging. For the estimates presented here, most assets are assumed to have depreciation patterns that decline geometrically over time so that, for a given year, the depreciation charges on existing assets are obtained by multiplying the prior year's charge by one minus the annual depreciation rate.

Net stock is the value of fixed reproducible tangible wealth after adjustment for depreciation. With the perpetual inventory method that is used to derive the estimates presented here, the net stock in the historical-cost valuation and (at the deflation level) in the real-cost valuation is calculated as the cumulative value of past gross investment less the cumulative value of past depreciation. Net stock in current-cost valuation is the value of the items in the real-cost net stock measured in the prices of the current yearend.

Average age of net stock at a given yearend is a weighted average of the ages of all investment in the stock at that yearend. The weight for each age is based on its value in the net stock.

Valuation of the estimates

The estimates of private net stocks and depreciation presented here are computed in historical-cost, real-cost, and current-cost valuations, using investment data in historical-cost and real-cost valuations. The average ages of net stocks are presented only for the current-cost and historical-cost valuations. Estimates for government capital are presented on a similar basis except that estimates of net stocks and depreciation are not presented in a historical-cost valuation.

Historical-cost valuation measures the value of fixed assets in the prices of the periods in which the assets were purchased new.

Real-cost valuation measures the value of these assets after the effects of price change have been removed. For this valuation, estimates for aggregate series are presented as chain-type quantity indexes, with 1992 equal to 100. These indexes are computed using annual-weighted Fisher-type indexes to obtain year-to-year growth rates, which are chained together to obtain cumulative growth rates. Estimates for selected higher level aggregates are also presented in chained (1992) dollars.

Current-cost valuation measures the value of these assets in the prices of the given period, which are yearends for net stocks and annual averages for depreciation.

*

http://www.allcountries.org/uscensus/766_net_stock_of_fixed_reproducible_tangible.html

These tables are based on figures supplied by the United States Census Bureau, U.S. Department of Commerce and are subject to revision by the Census Bureau.

Copyright © 2006 Photius Coutsoukis and Information Technology Associates, all rights reserved.