For the nation, BEA defines gross domestic product by industry, often referred to as "value added," as an industry's gross output (sales or receipts and other operating income, commodity taxes and inventory change) minus its intermediate inputs (consumption of goods and services purchased from other industries or imported). The Census Bureau's measure of value added by industry differs conceptually from BEA's in that it includes the purchased services that are used in production of an industry's product, excludes excise and sales taxes from gross receipts, and does not value inventories on a replacement cost basis, as BEA does.
For the states, further differences between the BEA measure of GDP by state and the Census value added measure arise because 1) for SIC industries, BEA assigns the value added by central administrative offices (CAO's) of multi-establishment firms to the states where the CAO's are located while Census assigns it to the states where the operating establishments administered by the CAO's are located; 2) there may be industry classification differences between the two series; and 3) for construction, BEA assigns GDP to the state where the construction is performed rather than to the state where the construction establishment is located.
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