4.3 Data Sources

• identification and location of potentially affected manufacturing plants,
• identification of parent company owner of each plant,
• industrial processes and input usage at each plant,
• Industry codes and/or final product descriptions (i.e., type of product and/or end use),
• individual plant capacity (or process/equipment capacities), and
• age of manufacturing plant and/or equipment.

The analyst should review the data for accuracy and adequacy and report any major questions, data gaps, or other deficiencies to the work group to address possible shortcomings at the early stage of profile development. The economic analyst should then supplement these survey data with available primary and secondary sources to complete the industry profile.

To facilitate an understanding of subject industries and to identify data sources, EPA's Office of Enforcement and Compliance Assurance (OECA) has developed a series of profiles containing information on selected major industrial groups. These industry profiles, or Industry Sector Notebooks, provide useful summary information on industrial processes and input usage, final product characterization, industry organization, general economic trends, and existing regulatory requirements. These documents also provide an extensive list of bibliographic references that can assist economic analysts in their initial literature search and data collection efforts. Industry Sector Notebooks range in length from 84 to 180 pages and are currently available for those industries listed in Table 4-2. OECA is also planning to add profiles on the following industries in the near future:

• aerospace,
• agricultural chemicals,
• agricultural crop production,
• agricultural stock production,
• coal mining, and
• oil and gas exploration and production.

These Notebooks are available for downloading from EPA’s web site < http://es.epa.gov/oeca/sector/index.html> in one or more electronic file formats including HTML, Adobe Acrobat (PDF), WordPerfect for Macintosh 3.0/DOS 5.1/Windows 6.1, and Word for Macintosh 5.1a.

Primary sources of information for industry profiles will be industry trade associations and government agencies.  Major trade associations related to the subject industry can be identified through the Industry Sector Notebooks, through discussions with the engineers, or through Internet searches.  Additional sources for identifying trade associations include the Encyclopedia of Associations published by Gale Research Company and National Trade and Professional Associations of the United States published by Columbia Books, Inc.  Major government sources of information include the U.S. Department of Commerce’s Bureau of Census, the U.S. Department of Energy’s Energy Information Administration and Office of Industrial Technologies, and the U.S. International Trade Commission.  In particular, useful industry overviews and general data are provided by the U.S. International Trade Commission’s Industry and Trade Summaries (individual reports for selected industries) and the U.S. Department of Commerce’s U.S. Industry and Trade Outlook (single report covering all industries across U.S. economy, formerly the U.S. Industrial Outlook).

The analyst, of course, should always conduct a detailed literature search through academic, research, or government libraries for books and articles related to the subject industry.  These searches can now be performed online through the Internet.  For example, the North Carolina State University libraries can be accessed through the Internet at < http://www.lib.ncsu.edu/index.html>, while other academic and research libraries with web servers can be identified and accessed through Libweb at < http://www.lib-web.org/>.  Furthermore, other general sources for industry overviews and statistics include the following:

• Gale Research Company publications such as Encyclopedia of American Industries, U.S. Industry Profiles: The Leading 100, and Manufacturing U.S.A.;
• private consulting firm studies available online through information service providers (e.g., Profound, DIALOG) or directly from the consulting firm’s web site (e.g., The Freedonia Group, SRI International);
• investor research reports published by Standard and Poor’s, Moody’s, and Value-Line Investments; and
• Chemical Economics Handbook (CEH), SRI International.  The CEH is a comprehensive multi-volume study of the chemical industry consisting of hundreds of reports on major segments of the industry and on individual chemicals or related groups of chemicals.  Each report in CEH is periodically updated and the reports range in age from 6 months to 6 or 7 years, with 2 or 3 years being average.

In addition, several web sites provide access to industry information and resources such as The Chemical Industry Home Page at < http://www.neis.com/> (industry-specific source) or Yahoo! Finance at < http://biz.yahoo.com> (general source across many industries).  The specific sources typically used for each section of the profile outline presented in Table 4-1 are summarized below.

   4.3.1    The Supply Side

This section of the profile provides information about the supply side of the affected industry, focusing on identification and characterization of the affected production processes, the resulting final and residual products, and the costs of production. Table 4-3 provides several resources that have been identified as providing useful information for this section of the profile. A discussion of these sources and the relevant information they are likely to provide is presented below.

In the engineering analysis stage of the regulatory process (see Figure 3-2), EPA identifies and characterizes affected production processes and, sometimes, the resulting products and residuals. Typically, the economic analyst must consult other sources to provide this information or to supplement the information provided by the engineering analysis. Additional primary sources for this type of information include the following:

• EPA Sector Notebooks.  This government source provides very good summaries of the technologies, processes, and products for selected industries (current list shown in Table 4-2).  These summaries include useful diagrams of the production flows as well as illustrations of specific equipment or processes.
• Trade Associations.  Trade associations often publish brochures or summary reports that provide information on technologies, processes, and products.  Many of these associations have World Wide Web sites that provide online reference materials, publications lists, and links to other data sources.
• Company Web Sites.  Companies often provide general descriptions and diagrams of their production technologies and processes, as well as information on the resulting final and residual products (i.e., saleable or recyclable products and pollutants).

As shown, other sources include previous EPA investigations (i.e., profiles or economic analyses), textbooks and technical manuscripts published by industry or academic experts, Gale Research Company’s How Products are Made, and industry or specialty reference materials such as the Kirk-Othmer and the Ullmann’s chemical-related encyclopedias.  The Ullmann’s Encyclopedia of Industrial Chemistry contains 36 volumes with more than 800 major articles and over 26,000 pages of information in industrial chemistry, process engineering, materials science, environmental chemistry, food science, and biotechnology.

Information on production costs for affected entities can also be provided through EPA’s engineering analysis.  However, most often, the economic analyst is required to consult other sources for this information.  For source-specific regulations, general information on production costs for the subject industry can be obtained from trade association publications or economic or technical research literature.  For example, some trade journals have annual survey articles that summarize these costs (i.e., Rock Products for cement operations), or some researchers have already estimated these costs or the relevant functional relationships.

In addition, the Industry and Trade Summaries reports published by the U.S. International Trade Commission often provide industry survey data on the production costs of the subject industry.  Sources that can provide costs of specific factors of production include the following:

• BLS LABSTAT Database (labor),
• Energy Information Administration (energy and power),
• U.S. Geological Survey (raw materials), and
• Synthetic Organic Chemicals and Chemical Marketing Reporter (chemicals).

The factor-specific cost data obtained from these and other sources can be used to generate estimates of the production costs, given specification of the appropriate production or cost function.

   4.3.2    The Demand Side

This section of the profile provides information about the demand side of the affected industry focusing on identification and characterization of the attributes of the affected product(s), consumers and end uses, and the substitution possibilities in consumption.  Table 4-4 provides several resources that have been identified as providing such information.  Typically, the economic analyst must consult other sources to provide this information or to supplement the information provided by the engineering analysis.  Furthermore, the U.S. ITC’s Industry and Trade Summary reports provide very good summary information to identify and characterize consumers and end uses, as well as substitutes.  Additional primary sources for this type of information include the following:

• Trade Associations.  Trade associations often publish brochures detailing product characteristics and comparisons with substitutes, as well as statistic reports that provide historical and projected data on end-use market shares and volumes consumed.  Many of these associations have World Wide Web sites that provide on-line reference materials, publications lists, and links to other sources of data.
• Company Web Sites.  Companies often provide general descriptions of their products as well as useful comparisons of their product lines with competitors’ products or other general substitute products.
• U.S. Bureau of Census.  This government sources provide publications and data on U.S. economic activity and specific industries as identified formerly by SIC codes and currently by NAICS codes.  For historical data on end-use volumes, the Current Industrial Report is a very good source for selected industries and products (available online at <http://www.census.gov/ftp/pub/cir/www/>.
• U.S. Geological Survey.  This government source provides publications and data on the U.S. and global supply, demand, and flow of minerals and materials.  For some minerals and materials, the information provides an identification of end uses and the historical volumes consumed by each end use (available online at <http://minerals.er. usgs.gov/minerals/pubs/product.html>).
• Private Consulting Firm Studies.  These studies may be a good source of detailing product characteristics, identifying substitutes, and providing historical and projected data on end-use market shares and volumes consumed.  However, the analyst should be aware that the data provided in these sources may be compilations of publicly available information, and the methodology or assumptions for projections are typically not provided in sufficient detail.

As shown, other sources of this type of information include previous EPA investigations (i.e., profiles or economic analyses), textbooks and technical manuscripts published by industry or academic experts, and industry or specialty reference materials such as Kirk-Othmer and Ullmann’s encyclopedias.

   4.3.3    Industry Organization

This section of the profile characterizes the structure of the subject markets, the plants that manufacture the affected products, and the firms that own these manufacturing plants.

   4.3.3.1  Market Structure

Market structure is important to understanding an industry because it determines the behavior of producers and consumers in the industry. To assess the competitiveness of a market, economists often estimate four-firm concentration ratios (CR4) and Herfindahl-Hirschman indexes (HHI) for the subject market or industry. These measures of market

concentration are provided by four-digit SIC codes in the U.S. Bureau of the Census publication Concentration Ratios in Manufacturing.  An additional source of seller concentration measures is the Market Share Reporter, published by Gale Research Company, which annually compiles market share data on companies, products, and services.  However, additional information must be obtained and evaluated in the industry profile because no objective criteria exist for determining market structure based on these concentration measures.  Thus, the economic analyst should consult the economic and industry literature to inform the selection or characterization of markets.

   4.3.3.2  Manufacturing Plants

Although sources providing information at the facility level are limited, Table 4-5 provides several resources identified as providing such information. A discussion of these sources and the relevant information they are likely to provide is presented below.

Trade Associations.  Trade associations often publish directories that list individual facility characteristics and other valuable information.  Many of these associations have World Wide Web sites that provide publications lists, industry statistics, and links to other sources of data.  For example, the American Portland Cement Association maintains a web site at <http://www.portcement.org> with useful general and economic information on this industry in addition to publishing an annual plant information summary that provides detailed data on location, technology, capacity, and company ownership information of manufacturing plants.

Industry Buyers’ Guides.  Many industries publish buyers’ guides that list facility location information as well as product information.  For example, the Chemical Marketing Reporter publishes the Chemical Buyers Directory that lists supplier and product information, while Chemical Week and Vertical Net, Inc. provide similar information through online guides (i.e., Buyers’ Guide at < http://www.chemweek.com/tools/cwbg.html> and Chemical Online at < http://www.chemicalonline.com/suppliers.html>).  In addition, MacRAE’S Blue Book is a comprehensive national buying guide of 50,000 prominent U.S. manufacturers including their products and trade names.  This source is available in print and online through a fee-based subscription service at <http://www.macraesbluebook.com>.

U.S. Security and Exchange Commission.  EDGAR Database.  This source consists of electronic filings by public corporations to the Securities and Exchange Commission (i.e., 10-K reports) and is available through the Internet at < http://www.sec.gov/edgarhp.htm>.  Some companies publish detailed information on their manufacturing operations as well as markets served.  However, this information may often times only include plant location.

Corporate Web Sites.  Many corporations maintain web sites that may provide data on manufacturing facilities.  The level of detail varies greatly across owning companies:  some provide no information while others provide highly detailed facility information.  Web addresses for companies may be provided in some company data sources or obtained through web searches via Internet search engines.

Other Sources.  The Dun & Bradstreet Market Identifiers, American Business Disk, and U.S. Manufacturers Database generally only provide location, sales, and employment information.  In addition, there are strict use limitations from these sources.

   4.3.3.3  Firm Characterization

The profile must also characterize the potentially affected legal entities that own these manufacturing facilities. As shown in Figure 4-1, the chain of ownership may be as simple as one facility owned by one company (i.e., direct owner is parent company) or as complex as one facility owned by multiple companies (i.e., direct owner is subsidiary company or other legal entity). The legal entity of interest to the ISEG analyst is the ultimate parent company. Sources of data to be used in characterizing these parent companies include the following:

• InfoTrac—Information Access Company,
• SEC 10-K reports (via EDGAR search),
• Ward’s Directory of U.S. Private and Public Companies,
• Standard and Poor’s Stock Report Services,
• company annual reports and web sites, and
• industry trade publications and journals.

Based on the appropriate SBA size definitions, the ISEG analyst must characterize the owning firms by size to facilitate the future preparation of a regulatory flexibility analysis. For example, under SIC 3312, the SBA defines a small company as one having 1,000 or fewer employees. Therefore, based on the firms' sales or employment, the profile will identify the firms owning potentially affected manufacturing plants as small or not small. This characterization will also include an examination of vertical and horizontal integration that will affect how the firms will respond to the regulation. The profile will also include data, where possible, that will characterize the baseline financial condition of these companies, including income statements, balance sheets, and cash flow statements.

The New York Public Library publishes a guide to doing basic research on United States Companies that provides a fairly comprehensive list of company information resources.  This guide is available through the Internet at <http://web.nypl.org/research/sibl/company/companyinfo.html>.  Several of these sources can be classified as primary resources because they have consistently been used to provide company-specific information for previous industry profiles.  In addition, other databases have also been identified as valuable sources of industrywide financial information.  Table 4-6 presents a summary of company-specific resources, while Table 4-7 presents the data elements that they provide.  Each source is briefly described below.

The following sources provide information for specific companies of interest to the economic analyst.

Information Access Company’s Business Index.  This electronic source allows the user to search for individual companies by name or search for a list of companies in a particular industry based on four-digit SIC codes.  Once a company has been identified, this source provides links to its corporate owner as well as recent articles about the company.  This database provides information on the company’s legal form of organization, sales and employment, and SIC codes.   For some companies, the company’s Internet address is also included.   Although this source is updated weekly, information for some companies may be dated.  The index is available at most university libraries or through the Internet at < http://www.insitepro.com/>.  However, Internet access is restricted to subscribers.

Ward’s Business Directory of U.S. and Private Companies.  This print source allows the user to search company names alphabetically or by a particular industry based on four-digit SIC codes.  The directory provides information on the company’s legal form of organization, sales and employment, and SIC codes.  It also identifies the immediate owner of the company, if applicable.  The directory is published annually; however, the reported information does not necessarily correspond to one particular time period.  For example, the 1998 directory reports sales and employment information based and several years of data (1994 through 1996).

Dun & Bradstreet (D&B) Database Available Through EPA’s Facility Index System (FINDS).  This electronic database allows the user to search for companies using a DUNS identification number or company name.  However, information on the state in which the company is located is required to complete a company name search.  Links to the ultimate parent companies are provided, if available, as well as sales, employment, and SIC code information.  Although D&B is a good source of company data, there are strict use limitations for this database.

Worldscope.  This electronic database is very good source for information on international companies.  Users can search for companies by name and the database reports sales, employment, and SIC code information.  It also provides historical information for company sales for the past 5 years.

Standard and Poor’s Corporations.  This electronic database is an excellent source of information on small and/or private companies.  Users can search for companies by name or SIC codes.  It provides corporate ownership, sales, employment, and SIC information.

Hoover’s Online.  This electronic database is an excellent source of information on U.S. public and private companies.  Users can search for companies by name, ticker symbol, or keyword.  It provides corporate ownership, sales, net income, and employment.  Links are also provided to the company’s web site and those of top competitors (if available), SEC filings in EDGAR Online, investor research reports, and news and commentary.

Directory of Corporate Affiliations.  This print source provides good information on international corporations.  Users can search an alphabetical list for company names.  This database identifies corporate ownership and reports sales and employment data.  Information is limited to larger corporations.

U.S. Security and Exchange Commissions:  EDGAR Database.  This source consists of electronic filings by public corporations to the Securities and Exchange Commission (e.g., 10-K reports) and is available through the Internet at <http://www.sec.gov/edgarhp.htm>.  Users can search by company name to locate appropriate reports.  In addition to sales and employment data, these reports typically include detailed financial information such as income statements, balance sheets, and cash flow statements that are not available from other sources.  However, this source only includes information on publicly traded U.S. companies.

Corporate Web Sites.  Many companies maintain web sites that can be good sources of financial information.  These sites often include recent annual reports and links to industry-related sites.  A starting point for searching for company web sites is <http://www.yahoo.com/Business_and_Economy/
Companies/Directories/Regional/U_S__States/>.  However, individual company names can be searched using any Internet search engine.  As noted earlier, Information Access Company’s Business Index also provides Internet addresses for selected companies.

Sources containing information on industry financial conditions and trends often provide general data that can be used to estimate missing data for specific companies.  The following resources may provide this type of information:

• Dun & Bradstreet’s  Industry Norms & Key Business Ratios;
• Leo Troy’s Almanac of Business and Industrial Financial Ratios;
• Robert Morris Associates’ Annual Statement Studies;
• U.S. Department of Commerce’s Quarterly Financial Reports for Manufacturing, Mining, and Trade Corporations <http://www.census.gov/prod/www/titles.html - qfr>; and
• Value Line Publications’ Value Line Investment Survey.

These sources should be available in print or electronic format at most academic or research libraries.

   4.3.3.4  Other Owning Entities

The profile must also characterize the other entities that are not firms but may own affected facilities or emissions sources. These other entities include Federal agencies; state, local, and tribal governments; and non-profit organizations. Table 4-8 provides several resources that have been identified as providing information to characterize these owning entities, including the following:

1992 Census of Governments:  Government Finances–Compendium of Government Finances.  Presents statistics on governmental finances for Federal, state, and local governments (separate tabulations are included for counties summarized by size).  Data include revenue by source, expenditures by function, per capita figures, percentage distributions, and rankings.  Finances of utilities operated by local governments are detailed by state and by type of utility and government.

City Government Finances.  Provides a summary of city government finances as well as data on finances of city-operated utilities; supplementary detail on other utilities for individual cities and selected urban towns and townships of over 75,000 population; city finance items and per capita amounts of these items, by population-size groups; finances of individual cities and selected urban towns and townships of over 75,000 population; per capita amounts of financial items; and finances of individual city governments having 300,000 population or more.

County Government Finances.  Provides a summary of county government finances including data on revenue and expenditures, finances of county governments by population-size groups, finances of individual county governments in counties of over 100,000 population, per capita amounts of selected financial items by counties, detailed finances of individual counties of over 500,000 population, and finances of individual city-counties of over 100,000 population.

To facilitate RFA and SBREFA analysis, based on the information obtained from these sources and others, the industry profile will identify these other entities as small or not small. In addition, some of the sources listed in Table 4-8 allow the analyst to characterize the demographics and economic conditions within relevant governmental jurisdictions and geographic areas.

   4.3.4    Markets

This section of the profile provides historical and/or projected market data on U.S. production, consumption, and foreign trade, as well as prices of affected commodities. Table 4-9 provides several resources identified as providing such information. As shown, these sources include statistical reports and trade articles published by trade associations and government publications from the U.S. Department of Commerce, U.S. Department of Energy, U.S. Geological Survey, and others. In addition, the U.S. International Trade Commission periodically publishes industry profiles, which contain market data and assessments of current and future market conditions for selected industries and/or products. The primary sources of this type of information include the following:

• Trade Associations.  Trade associations often publish statistic reports that provide historical and projected data on U.S. production/shipments and foreign trade.  Many of these associations have World Wide Web sites that provide online data tables and text descriptions, publications lists, and links to other sources of data.
• U.S. Bureau of Census.  This government source provides publications and data on U.S. economic activity and specific industries as identified by SIC codes.  For historical data on value and volume of U.S. shipments, the Census publications are very good sources for numerous industries and products/services (available online at < http://www.census.gov/prod/www/titles.html/>.
• U.S. Geological Survey.  This government source provides publications and data on the U.S. and global supply, demand, and flow of minerals and materials.  For most minerals and materials, this source provides historical data on U.S. production, foreign trade, and apparent consumption, as well as market prices (available online at < http://minerals.er.usgs.gov/minerals/pubs/product.html>).

• U.S. ITC Trade DataWeb.  This government source provides U.S. imports and exports by customized list of products to obtain value, quantity, and unit value for products. (Version 1.7 of this database is currently available online at < http://205.197.120.17/>).
• Private Consulting Firm Studies.  These studies may be a good source of historical and projected data on U.S. production/shipments, foreign trade, and apparent consumption.  However, the analyst should be aware that the data provided in these sources may be compilations of publicly available information and the methodology or assumptions for projections are typically not provided in sufficient detail.

In addition to confirming the current status of the industry, these sources are often useful in exploring trends and projections. Future projections are available from trade associations, trade journals, government sources (e.g., U.S. Department of Energy forecasts), or industry experts. The economic analyst should review the assumptions upon which the forecasts are provided to determine the quality of these estimates and their validity given acquired knowledge of the subject industry and/or markets. These assumptions should be provided with the industry profile. Alternatively, the economic analyst can employ the historical data to develop future growth projections based on simple growth rates or econometric techniques using additional data on U.S. and global economic activity.

1 Tables from the  U.S. Industry and Trade Outlook by industry sector are available online at < http://www.ita.doc.gov/industry/otea/usito98/tables.htm>.

2 The recently released 6th edition is available in electronic format, see the Ullmann home page at   < http://www.wiley_vch.de/vch/software/ullmann/index.html> for more details.

3 This section may also include specification of the elasticity of demand, which measures the responsiveness of quantity demanded to price changes.  The demand elasticity is a necessary parameter in the market-based approach to conducting EIAs (as described fully in Section 5).  Values for this key parameter can be obtained from previous academic or EPA analyses of the subject industry or can be estimated using econometric techniques as discussed in previous EIA reports (see  Research Triangle Institute, 1998).  If parameter estimates are not available or feasible to estimate, then the analyst may rely on other means to determine whether an elastic or inelastic characterization would be most appropriate for the economic analysis.

4 See the pharmaceuticals (Research Triangle Institute, 1996b) or portland cement (Research Triangle Institute, 1996a) industry profiles for more detailed description of this issue.