How to interpret that 1$ ouput of a process (sector) may need more that 1$ input in PSILCA ?

Question

Hello,

I am trying to interpret the meaning of sectors of PSILA that may need more than 1$ input for 1$ output.

I find that often for commodities. For example 1$ output of "Commodities - Fishing - IND" has a single input of "Industries - Fishing - IND" for 1,004 $ in PSILCA 3.11.

Does this mean that there are losses?

It is not clear to me, then, if the risk assessed hours are assessed to the 1$ of the considered process, or the 1,004 $ of the child input process (I guess that would imply double counting), or the difference between the 2 numbers (which would be negative ???).

I am sorry for the basic question, but I would be very grateful if someone could enlighten me, and prevent me from making big mistakes :-)

All the best,

Richard

Answer 1

Hi, good observation, this means that processes / sectors do not run in a profitable way, so they generate less money than they need (simply put). We do not consider subsidies etc. in the prices in the database, so there are quite some cases where this happens (and even with subsidies considered, there are cases - due to rounding and algorithm "issues" or also, maybe, caused by sectors not profitable in a year).