MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Appendix A: Detailed Economic Impact Analysis Information INTRODUCTION This appendix provides information to support the economic analyses of MP& M industries evaluated for the final rule and presented in Chapter 3 through Chapter 11 of the EEBA.

The first section below provides the SIC and NAICS codes that define the MP& M industrial sectors. The second section presents information on the annual turnover of establishments (  births  and   deaths ) in the industrial sectors. The third section provides a description of the MP & M surveys that supported the economic impact and benefits analyses presented in the EEBA ( see Section 3 of the TDD ).

A. 1 MP& M SIC AND NAICS CODES Standard Industrial Classification ( SIC) codes and North American Industrial Classification System ( NAICS) codes are hierarchical systems that allow for detailed classification of industries using numerical codes. This section lists and describes the SIC codes that make up the MP& M industry sectors. It also describes the process by which data organized by NAICS code was converted to SIC code format. CHAPTER CONTENTS A. 1 ................ A 1 A. 1.1 SIC Codes by Sector ................. ... A 1 A. 1.2 ..... A 7 A. 2 l Establishment   Births  and   Deaths  in MP& M Industries ................. ..... A 26 A. 3 escription of MP& M Surveys ............... A 28 A. 3.1 reener Surveys ................. .... A 28 A. 3.2 io Screener Surveys ................ A 28 A. 3.3 ailed MP& M Industry Surveys ....... A 28 A. 3.4 ................. A 29 A. 3.5 ................. . A 29 A. 3.6 ................ A 29 A. 3.7 ................. ...... A 29 References ................. ................. . A 31 MP& M SIC and NAICS Codes Bridge Between NAICS and SIC codes Annua D Sc Oh Det Iron and Steel Survey Municipality Survey Federal Facility Survey POTW Survey A. 1.1 SIC Codes by Sector Table A. 1 lists and describes the 4 digit SIC codes that make up the MP& M industry sectors. These codes were used until recently to define industries for reporting of Federal Census data, and are the framework for the part of the industry profile ( Chapter 3) based on publicly available material.

Table A. 1: MP& M Sectors and SIC Codes Evaluated for the Final Rulea SIC Code Standard Industrial Classification Groups Aerospace 3761 Guided Missiles and Space Vehicles 3764 Guided Missile and Space Vehicle Propulsion 3769 Other Space Vehicle and Missile Parts Aircraft 3721 Aircraft 3724 Aircraft Engines and Engine Parts 3728 Aircraft Parts and Auxiliary Equipment 4581 Airports, Flying Fields, Airport Terminal Services Bus And Truck 3713 Truck and Bus Bodies 3715 Truck Trailers A 1 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 1: MP& M Sectors and SIC Codes Evaluated for the Final Rulea SIC Code Standard Industrial Classification Groups 4111 Local And Suburban Transit 4119 Local Passenger Transit, N. E. C.

4131 Intercity And Rural Bus Transportation 4141 Local Bus Charter Service 4142 Bus Charter Service, Except Local 4173 Bus Terminal And Service Facilities 4212 Local Trucking without Storage 4213 Trucking, Except Local 4214 Local Trucking with Storage 4215 Courier Services, Except by Air 4231 Trucking Terminal Facilities Electronic Equipment 3661 Telephone and Telegraph Apparatus 3663 Radio and Television Broadcast and Communications Equipment 3669 Communications Equipment, N. E. C.

3671 Electron Tubes 3675 Electronic Capacitors 3677 Electronic Coils and Transformers 3678 Connectors for Electronic Applications 3679 Electronic Components, N. E. C.

3699 Electrical Machinery, Equipment, And Supplies, N. E. C.

Hardware 2796 Platemaking and Related Services 3398 Metal Heat Treating 3412 Metal Shipping Barrels, Drums, Kegs, Pails 3421 Cutlery 3423 Hand And Edge Tools, Except Machine Tools and Handsaws 3425 Hand Saws and Saw Blades 3429 Hardware, N. E. C.

3433 Heating Equipment, Except Electric and Warm Air Furnace 3441 Fabricated Structural Metal 3443 Fabricated Plate Work ( Boiler Shops)

3444 Sheet Metal Work 3446 Architectural and Ornamental Metal Work 3448 Prefabricated Metal Buildings And Components 3449 Miscellaneous Metal Work 3451 Screw Machine Products 3452 Bolts, Nuts, Screws, Rivets, and Washers 3462 Iron and Steel Forgings 3466 Crowns and Closures 3469 Metal Stamping, N. E. C.

3492 Fluid Power Valves and Hose Fittings 3493 Steel Springs 3494 Valves And Pipe Fittings, Except Brass A 2 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 1: MP& M Sectors and SIC Codes Evaluated for the Final Rulea SIC Code Standard Industrial Classification Groups 3495 Wire Springs 3496 Miscellaneous Fabricated Wire Products 3498 Fabricated Pipe and Fabricated Pipe Fitting 3499 Fabricated Metal Products, N. E. C.

3541 Machine Tools, Metal Cutting Types 3542 Machine Tools, Metal Forming Types 3544 Special Dies and Tools, Die Sets, Jigs and Fixtures, and Industrial Molds 3545 Machine Tool Access and Measuring Devices 3546 Power Driven Hand Tools 3965 Fasteners, Buttons, Needles, Pins Household Equipment 2514 Metal Household Furniture 2522 Office Furniture, Except Wood 2531 Public Building and Related Furniture 2542 Partitions and Fixtures, Except Wood 2591 Drapery Hardware and Window Blinds/ shades 2599 Furniture and Fixtures, N. E. C.

3431 Metal Sanitary Ware 3432 Plumbing Fittings and Brass Goods 3442 Metal Doors, Sash, and Trim 3631 Household Cooking Equipment 3632 Household Refrigerators and Home and Farm and Freezers 3633 Household Laundry Equipment 3634 Electric Housewares and Fans 3635 Household Vacuum Cleaners 3639 Household Appliances, N. E. C.

3641 Electric Lamps 3643 Current carrying Wiring Devices 3644 Noncurrent carrying Wiring Devices 3645 Residential Electrical Lighting Fixtures 3646 Commercial, Industrial, and Institutional 3648 Lighting Equipment, N. E. C.

3651 Radio/ television Sets Except Communication Types 7623 Refrigeration and Air conditioning Service and Repair Shops Instruments 3812 Search, Detection, Navigation, Guidance, Aeronautical, Nautical Systems and Instruments 3821 Laboratory Apparatus and Furniture 3822 Automatic Environmental Controls 3823 Process Control Instruments 3824 Fluid Meters and Counting Devices 3825 Instruments to Measure Electricity 3826 Laboratory Analytical Instruments 3827 Optical Instruments and Lenses 3829 Measuring and Controlling Devices, N. E. C.

A 3 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 1: MP& M Sectors and SIC Codes Evaluated for the Final Rulea SIC Code Standard Industrial Classification Groups 3841 Surgical and Medical Instruments and Apparatus 3842 Orthopedic, Prosthetic and Surgical Suppl.

3843 Dental Equipment and Supplies 3844 X ray Apparatus and Tubes 3845 Electromedical Equipment 3851 Ophthalmic Goods 7629 Electric Repair Shop Iron and Steel 3315 Steel Wiredrawing and Steel Nails and Spikes 3316 Cold Rolled Steel Sheet, Strip, and Bars 3317 Steel Pipe and Tubes Job Shop 3471 Plating and Polishing 3479 Metal Coating and Allied Services Mobile Industrial Equipment 3523 Farm Machinery and Equipment 3524 Garden Tractors and Lawn and Garden Equipment 3531 Construction Machinery and Equipment 3532 Mining Machinery and Equipment, Except Oil Field 3536 Hoists, Industrial Cranes and Monorails 3537 Industrial Trucks, Tractors, Trailers 3795 Tanks and Tank Components Motor Vehicle 3465 Automotive Stampings 3592 Carburetors, Piston Rings, Valves 3647 Vehicular Lighting Equipment 3694 Electrical Equipment for Motor Vehicles 3711 Motor Vehicle and Automobile Bodies 3714 Motor Vehicle Parts and Accessories 3716 Mobile Homes 3751 Motorcycles 3792 Travel Trailers and Campers 3799 Miscellaneous Transportation Equipment 4121 Taxicabs 5013 Motor Vehicle Supplies and New Parts 5511 Motor Vehicle Dealers ( New and Used)

5521 Motor Vehicle Dealers ( Used Only)

5561 Recreational Vehicle Dealers 5571 Motorcycle Dealers 5599 Automotive Dealers, N. E. C.

7514 Passenger Car Rental 7515 Passenger Car Lease 7519 Utility Trailer and Recreational Vehicle Rental 7532 Top, Body, and Upholstery Repair and Paint Shops A 4 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 1: MP& M Sectors and SIC Codes Evaluated for the Final Rulea SIC Code Standard Industrial Classification Groups 7533 Auto Exhaust Systems 7537 Auto Transmission Repair 7538 General Automotive Repair 7539 Auto Repair Shop, N. E. C.

7549 Auto Services, Except Repair and Carwashes Office Machine 3571 Electronic Computers 3572 Typewriters 3575 Computer Terminals 3577 Computer Peripheral Equipment, N. E. C.

3578 Calculating, Accounting Machines Except Computers 3579 Office Machines, N. E. C.

7378 Computer Maintenance and Repairs 7379 Computer Related Services, N. E. C.

Ordnance 3482 Small Arms Ammunition 3483 Ammunition, Except for Small Arms 3484 Small Arms 3489 Ordnance and Accessories, N. E. C.

Miscellaneous Metal Products 3497 Metal Foil and Leaf 3861 Photographic Equipment and Supplies 3931 Musical Instruments 3944 Games, Toys, Children's Vehicles 3949 Sporting and Athletic Goods, N. E. C.

3951 Pens and Mechanical Pencils 3953 Marking Devices 3993 Signs and Advertising Displays 3995 Burial Caskets 3999 Manufacturing Industries, N. E. C.

7692 Welding Repair 7699 Repair Shop, Related Service Precious Metals and Jewelry 3873 Watches, Clocks, and Watchcases 3911 Jewelry, Precious Metal 3914 Silverware, Plated Ware and Stainless 3915 Jewelers' Materials and Lapidary Work 3961 Costume Jewelry 7631 Watch, Clock, Jewelry Repair Printed Circuit Boards 3672 Printed Circuit Boards Railroad 3743 Railcars, Railway Systems 4011 Railroad Transportation A 5 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 1: MP& M Sectors and SIC Codes Evaluated for the Final Rulea SIC Code Standard Industrial Classification Groups 4013 Railroad Transportation Ships and Boats 3731 Ship Building and Repairing 3732 Boat Building and Repairing 4412 Deep Sea Foreign Transportation 4424 Deep Sea Domestic Transportation 4432 Freight Transportation Great Lakes 4449 Water Transportation of Freight, N. E. C.

4481 Deep Sea Passenger Transportation 4482 Ferries 4489 Water Passenger Transportation, N. E. C.

4491 Marine Cargo Handling 4492 Towing and Tugboat Service 4493 Marinas 4499 Water Transportation Services, N. E. C.

Stationary Industrial Equipment 3511 Steam, Gas, Hydraulic Turbines, Generating Units 3519 Internal Combustion Engines, N. E. C.

3533 Oil Field Machinery and Equipment 3534 Elevators and Moving Stairways 3535 Conveyors and Conveying Equipment 3543 Industrial Patterns 3547 Rolling Mill Machinery and Equipment 3548 Electric and Gas Welding and Soldering 3549 Metal Working Machinery, N. E. C.

3552 Textile Machinery 3553 Woodworking Machinery 3554 Paper Industries Machinery 3555 Printing Trades Machinery and Equipment 3556 Food Products Machinery 3559 Special Industry Machinery, N. E. C.

3561 Pumps and Pumping Equipment 3562 Ball and Roller Bearings 3563 Air and Gas Compressors 3564 Blowers and Exhaust and Ventilation Fans 3565 Industrial Patterns 3566 Speed Changers, High Speed Drivers and Gears 3567 Industrial Process Furnaces and Ovens 3568 Mechanical Power Transmission Equipment, N. E. C.

3569 General Industrial Machinery, N. E. C.

3581 Automatic Merchandising Machines 3582 Commercial Laundry Equipment 3585 Refrigeration and Air and Heating Equipment 3586 Measuring and Dispensing Pumps A 6 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 1: MP& M Sectors and SIC Codes Evaluated for the Final Rulea SIC Code Standard Industrial Classification Groups 3589 Service Industry Machines, N. E. C.

3593 Fluid Power Cylinders and Actuators 3594 Fluid Power Pumps and Motors 3596 Scales and Balances, Except Laboratory 3599 Machinery, Except Electrical, N. E. C.

3612 Transformers 3613 Switchgear and Switchboard Apparatus 3621 Motors and Generators 3629 Electric Industrial Apparatus, N. E. C.

7353 Heavy Construction Equip Rental, Leasing 7359 Equipment Rental, Leasing, N. E. C.

a EPA evaluated options for these industrial sectors but did not regulate them all under the final rule.

N. E. C. = Not Elsewhere Classified Source: Executive Office of the President, Office of Management and Budget, Standard Industrial Classification Manual 1987.

A. 1.2 Bridge Between NAICS and SIC codes In 1997, the Census Bureau switched from using SIC codes to using NAICS codes. NAICS codes allow for greater comparability with the International Standard Industrial Classification System ( ISIC), which is developed and maintained by the United Nations. NAICS codes also better reflect the structure of today s economy, including the growth of the service sectors and new technologies, than do the decades old SIC codes. Because EPA chose to create regulatory subgroups for the MP& M industries based on aggregated four digit SIC codes, it was necessary for EPA to convert some data based on NAICS codes into SIC code format.

The SIC NAICS conversion is not always straightforward because NAICS and SIC codes often don t map on a one to one basis. Specific industries that were grouped together in one SIC code sometimes map to several NAICS codes, and sometimes several SIC codes were aggregated together in one NAICS code.

To address this conversion problem, EPA created a   bridge  that converts the NAICS classification structure to the SIC structure using share values computed from Economic Census data. This bridge is based on data from the 1997 Census,

which reported the share of number of establishments and value of output that each SIC code that contributed to each NAICS code, and vice versa.

The first step in creating the bridge was to obtain a table that listed the value of shipments ( VOS) that each NAICS code contributed to each SIC code. Since the total VOS for each NAICS code was known, EPA computed share values for each NAICS, which were equal to the percent of total VOS in that NAICS code that was classified in a certain SIC code. The equation is:

Share of NAICSx going to SICy = ( VOS that NAICSx contributed to SICy) / ( total VOS for NAICSx) ( A 1)

Using these share values, EPA converted data classified by NAICS to SIC format, simply by multiplying VOS for each NAICS by its share value, for each SIC, and then summing up the totals for each SIC. For example, if NAICS codes 333121,

332456, and 332457 all contributed a portion of their output to SIC 3322, then:

VOS for SIC3322 = ( share of NAICS333121 going to SIC3322 ) * ( VOS for NAICS333121 )

+ ( share of NAICS332456 going to SIC3322) * ( VOS for NAICS332456) ( A 2)

+ ( share of NAICS332457 going to SIC3322 ) * ( VOS for NAICS332457 )

A 7 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Occasionally it was not possible to compute share values because the Census Bureau withheld some 1997 VOS data because 1 of disclosure issues . In those cases, EPA estimated 1997 VOS based on 1992 Census data and then used those estimates to compute share values. First, EPA calculated the average VOS per establishment in 1992 for each relevant SIC code:

VOS per establishment for SICy = ( A 3) ( VOS for SICy in 1992) / ( number of establishments for SICy in 1992)

EPA then multiplied this average VOS per establishment for a certain SIC by the number of establishments that each NAICS contributed to that SIC in 1997:

Estimated VOS that NAICSx contributed to SICy in 1997 = ( A 4) ( VOS per establishment for SICy) * ( number of establishments NAICSx contributed to SICy in 1997)

EPA used this estimated VOS to compute an estimated share value.

To gain a rough measure of how accurately the NAICS codes could be broken into sectors, EPA calculated, by sector: ( 1) the percentage of NAICS codes that matched   one to one  with an SIC code, ( 2) the percentage that did not match one to one but were contained in a single sector, and ( 3) the percentage that didn t match one to one and were contained in multiple sectors ( Figure A. 1, Table A. 2).

Figure A. 1: Percentage of VOS 1997 to 1999 Attributable to One to One NAICS SIC Match, Not One to One but in the Same Sector, and Not One to One but in Different Sectors Sectors: 1 Hardware; 2 Aircraft; 3 Electronic Equipment; 4 Stationary Industrial Equipment; 5 Ordnance; 6 Aerospace; 7 Mobile Industrial Equipment; 8 Instruments; 9 Precious Metals and Jewelry; 10 Ships and Boats; 11 Household Equipment; 12 Railroad; 13 Motor Vehicle; 14 Bus and Truck; 15 Office Machine; 16 Printed Circuit Boards; 17 Job Shop; 18 Miscellaneous Metal Products; 19 Iron and Steel Source: Department of Commerce, Bureau of the Census, Manufacturing Industry Series; U. S. EPA analysis.

1 The Bureau of the Census does not release any data that could reveal data about a specific firm. In cases when a NAICS or SIC code is so specific that it includes only a few firms, information about VOS is not released. However, the number of establishments in a specific industry is not considered private information.

A 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 2: Percentage of Input One to One, Not One to One but in the Same Sector, and Not One to One and in Different Sectors Sector VOS One to One Employment One to One VOS Same Sector Employment Same Sector VOS Different Sectors Employment Different Sectors YEAR: 1997 62.5% 64.3% 18.2% 16.5% 19.3% 19.2%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

46.7% 47.2% 47.2% 43.2% 6.2% 9.7%

63.3% 68.1% 3.9% 4.4% 32.8% 27.6%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

91.8% 88.1% 5.5% 7.8% 2.7% 4.1%

30.4% 30.2% 14.4% 14.4% 55.2% 55.4%

10.2% 8.3% 0.0% 0.0% 89.8% 91.7%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

67.5% 60.6% 6.3% 4.5% 26.3% 34.9%

0.0% 0.0% 0.0% 0.0% 100.0% 100.0%

85.3% 69.5% 1.1% 3.1% 13.6% 27.4%

39.1% 42.8% 0.0% 0.0% 60.9% 57.2%

73.1% 59.9% 26.4% 38.6% 0.5% 1.5%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

99.9% 99.9% 0.0% 0.0% 0.1% 0.1%

83.1% 76.5% 12.2% 17.8% 4.6% 5.7%

98.1% 95.3% 0.0% 0.0% 1.9% 4.7%

YEAR: 1998 62.8% 64.9% 17.9% 16.3% 19.3% 18.8%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

47.6% 47.3% 46.0% 42.7% 6.4% 10.0%

62.0% 68.3% 3.8% 4.4% 34.2% 27.3%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

91.8% 88.0% 5.5% 8.0% 2.7% 4.1%

29.4% 29.3% 15.1% 14.7% 55.5% 55.9%

8.4% 8.7% 0.0% 0.0% 91.6% 91.3%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

66.2% 60.0% 6.9% 4.8% 26.9% 35.2%

0.0% 0.0% 0.0% 0.0% 100.0% 100.0%

84.2% 68.0% 1.3% 3.4% 14.6% 28.6%

40.7% 43.4% 0.0% 0.0% 59.3% 56.6%

73.5% 58.9% 26.0% 39.7% 0.5% 1.4%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

99.9% 99.9% 0.0% 0.0% 0.1% 0.1%

82.1% 76.1% 12.9% 18.2% 4.9% 5.8%

97.9% 95.3% 0.0% 0.0% 2.1% 4.7%

A 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 2: Percentage of Input One to One, Not One to One but in the Same Sector, and Not One to One and in Different Sectors Sector VOS One to One Employment One to One VOS Same Sector Employment Same Sector VOS Different Sectors Employment Different Sectors YEAR: 1999 62.3% 64.3% 18.3% 16.4% 19.4% 19.3%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

48.7% 47.9% 45.4% 42.3% 5.9% 9.8%

61.6% 67.8% 3.6% 4.3% 34.7% 27.9%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

89.6% 87.0% 7.4% 8.8% 3.0% 4.2%

29.9% 29.8% 15.2% 15.2% 54.9% 55.1%

7.1% 7.5% 0.0% 0.0% 92.9% 92.5%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

65.5% 57.8% 7.7% 5.4% 26.9% 36.8%

0.0% 0.0% 0.0% 0.0% 100.0% 100.0%

84.6% 68.3% 1.3% 3.9% 14.1% 27.9%

40.5% 45.8% 0.0% 0.0% 59.5% 54.2%

75.6% 56.6% 23.8% 41.9% 0.6% 1.6%

100.0% 100.0% 0.0% 0.0% 0.0% 0.0%

99.9% 99.9% 0.0% 0.0% 0.1% 0.1%

82.0% 76.8% 13.0% 17.1% 5.0% 6.1%

97.7% 95.0% 0.0% 0.0% 2.3% 5.0%

Sectors: 1 Hardware; 2 Aircraft; 3 Electronic Equipment; 4 Stationary Industrial Equipment; 5 Ordnance; 6 Aerospace; 7 Mobile Industrial Equipment; 8 Instruments; 9 Precious Metals and Jewelry; 10 Ships and Boats; 11 Household Equipment; 12 Railroad; 13 Motor Vehicle; 14 Bus and Truck; 15 Office Machine; 16 Printed Circuit Boards; 17 Job Shop; 18 Miscellaneous Metal Products; 19 Iron and Steel Source: Department of Commerce, Bureau of the Census, Manufacturing Industry Series; U. S. EPA analysis.

Table A. 3 presents the data that was used to calculate the relationship between NAICS and SIC codes. The table lists the MP& M sector to which each SIC code belongs, gives a short description of each SIC, and lists NAICS codes that encompass similar industries. The table also lists the number of establishments, the value of shipments, and the number of employees that are contributed to each SIC by each NAICS, as well as the share values, i. e. the portion of its total value of shipments that a given NAICS code contributes to a given SIC code.

A 10 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value Aerospace 3761 Guided Missiles and Space Vehicles 336414 Guided Missile and Space Vehicle Manufacturing 22 14,791,466 100.0%

3764 Guided Missile and Space Vehicle Propulsion 336415 Guided Missile and Space Vehicle Propulsion Unit and Propulsion Unit Parts Manufacturing 28 3,239,033 100.0%

3769 Other Space Vehicle and Missile Parts 336419 Other Guided Missile and Space Vehicle Parts and Auxiliary Equipment Manufacturing 49 898,758 100.0%

Aircraft 3721 Aircraft 336411 Aircraft Manufacturing 204 56,273,651 100.0%

3724 Aircraft Engines and Engine Parts 336412 Aircraft Engine and Engine Parts Manufacturing 369 22,617,284 100.0%

3728 Aircraft Parts and Auxiliary Equipment 336413 Other Aircraft Parts and Auxiliary Equipment Manufacturing 1,138 20,073,061 100.0%

4581 Airports, Flying Fields,

Airport Terminal Services 488111 Air Traffic Control 114 43,450 100.0%

488119 Other Airport Operations 1,699 3,243,149 99.8%

488190 Other Support Activities for Air Transportation 2,400 5,859,631 100.0%

561720 Janitorial Services 127 203,918 1.0%

Bus & Truck 3713 Truck and Bus Bodies 336211 Motor Vehicle Body Manufacturing 715 8,719,326 96.2%

3715 Truck Trailers 336212 Truck Trailer Manufacturing 390 5,507,768 100.0%

4111 Local And Suburban Transit 485111 Mixed Mode Transit Systems 28 51,567 100.0%

485113 Bus and Other Motor Vehicle Transit Systems 542 1,152,525 100.0%

485999 All Other Transit and Ground Passenger Transportation 534 601,988 89.9%

4119 Local Passenger Transit,

N. E. C. 485320 Limousine Service 3,234 1,873,924 100.0%

485410 School and Employee Bus Transportation 158 158,947 3.6%

485991 Special Needs Transportation 1,789 1,141,413 100.0%

485999 All Other Transit and Ground Passenger Transportation 232 67,395 10.1%

487110 Scenic and Sightseeing Transportation, Land 307 462,186 82.9%

621910 Ambulance Services 3,275 4,443,174 88.4%

4131 Intercity And Rural Bus Transportation 485210 Interurban and Rural Bus Transportation 407 1,147,432 100.0%

4141 Local Bus Charter Service 485510 Charter Bus Industry 482 459,953 26.0%

4142 Bus Charter Service, Except Local 485510 Charter Bus Industry 1,049 1,308,246 74.0%

4173 Bus Terminal And Service Facilities 488490 Other Support Activities for Road Transportation 26 15,253 3.9%

A 11 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 4212 Local Trucking without Storage 484110 General Freight Trucking, Local 14,545 11,108,345 90.5%

484210 Used Household and Office Goods Moving 3,259 1,198,983 9.5%

484220 Specialized Freight ( except Used Goods)

Trucking, Local 34,935 18,932,851 96.0%

562111 Solid Waste Collection 7,083 18,211,495 100.0%

562112 Hazardous Waste Collection 414 1,095,553 100.0%

562119 Other Waste Collection 827 837,625 100.0%

4213 Trucking, Except Local 484121 General Freight Trucking, Long Distance,

Truckload 23,111 51,142,148 100.0%

484122 General Freight Trucking, Long Distance,

Less Than Truckload 6,210 25,010,091 100.0%

484210 Used Household and Office Goods Moving 3,555 9,111,477 72.4%

484230 Specialized Freight ( except Used Goods)

Trucking, Long Distance 14,439 20,500,392 100.0%

4214 Local Trucking with Storage 484110 General Freight Trucking, Local 915 1,164,931 9.5%

484210 Used Household and Office Goods Moving 2,286 2,273,241 18.1%

484220 Specialized Freight ( except Used Goods)

Trucking, Local 543 782,939 4.0%

4215 Courier Services, Except by Air 492110 Couriers 2,362 19,289,602 53.1%

492210 Local Messengers and Local Delivery 5,384 3,519,100 100.0%

4231 Trucking Terminal Facilities 488490 Other Support Activities for Road Transportation 14 12,989 3.3%

Electronic Equipment 3661 Telephone and Telegraph Apparatus 334210 Telephone Apparatus Manufacturing 598 38,300,044 100.0%

334416 Electronic Coil, Transformer, and Other Inductor Manufacturing 7 8,904 0.6%

334418 Printed Circuit Assembly ( Electronic Assembly) Manufacturing 20 1,364,671 5.2%

3663 Radio and Television Broadcast and Comm Eq 334220 Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing 1,091 37,042,241 94.2%

3669 Communications Eq, N. E. C. 334290 Other Communications Equipment Manufacturing 497 4,233,288 100.0%

3671 Electron Tubes 334411 Electron Tube Manufacturing 159 3,858,499 100.0%

3675 Electronic Capacitors 334414 Electronic Capacitor Manufacturing 129 2,482,163 100.0%

3677 Electronic Coils and Transformers 334416 Electronic Coil, Transformer, and Other Inductor Manufacturing 426 1,512,232 97.9%

3678 Connectors for Electronic Applications 334417 Electronic Connector Manufacturing 347 5,598,906 100.0%

A 12 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3679 Electronic Components N. E. C. 334220 Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing 126 2,265,873 5.8%

334418 Printed Circuit Assembly ( Electronic Assembly) Manufacturing 695 24,704,154 94.8%

334419 Other Electronic Component Manufacturing 1,851 10,547,090 100.0%

336322 Other Motor Vehicle Electrical and Electronic Equipment Manufacturing 253 1,420,996 8.4%

3699 Electronic Mach.,

Equipment, & Suppl. N. E. C. 332212 Hand and Edge Tool Manufacturing 4 140,811 2.1%

333293 Printing Machinery and Equipment Manufacturing 5 0 0.9% b 333314 Optical Instrument and Lens Manufacturing 5 7,320 0.2%

333319 Other Commercial and Service Industry Machinery Manufacturing 57 934,728 10.0%

333512 Machine Tool ( Metal Cutting Types)

Manufacturing 8 151,363 2.8%

333618 Other Engine Equipment Manufacturing 2 0 0.7% b 333992 Welding and Soldering Equipment Manufacturing 6 11,101 0.2%

334510 Electromedical and Electrotherapeutic Apparatus Manufacturing 11 52,855 0.5%

334511 Search, Detection, Navigation, Guidance,

Aeronautical, and Nautical System and Instrument Manufacturing 7 77,832 0.2%

334516 Analytical Laboratory Instrument Manufacturing 10 36,473 0.5%

334519 Other Measuring and Controlling Device Manufacturing 5 6,174 0.1%

335129 Other Lighting Equipment Manufacturing 4 859 0.0%

335999 All Other Miscellaneous Electrical Equipment and Component Manufacturing 567 4,051,267 58.8%

Hardware 2796 Platemaking and Related Services 323122 Prepress Services 1,276 2,663,020 53.2%

3398 Metal Heat Treating 332811 Metal Heat Treating 808 3,485,459 100.0%

3412 Metal Shipping Barrels,

Drums, Kegs, Pails 332439 Other Metal Container Manufacturing 151 1,310,595 57.8%

3421 Cutlery 332211 Cutlery and Flatware ( except Precious)

Manufacturing 164 2,198,365 99.6%

3423 Hand & Edge Tools, Except Mach. Tools, Saws 332212 Hand and Edge Tool Manufacturing 1,069 5,677,903 86.0%

3425 Hand Saws and Saw Blades 332213 Saw Blade and Handsaw Manufacturing 176 1,452,540 100.0%

A 13 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3429 Hardware N. E. C. 332439 Other Metal Container Manufacturing 117 402,378 17.7%

332510 Hardware Manufacturing 952 10,359,952 96.0%

332919 Other Metal Valve and Pipe Fitting Manufacturing 16 0 3.9% b 3433 Heatg. Equip. Except Elec. &

Warm Air Frnc. 333414 Heating Equipment ( except Warm Air Furnaces) Manufacturing 453 3,387,391 91.1%

3441 Fabricated Structural Metal 332312 Fabricated Structural Metal Manufacturing 2,900 14,200,270 86.8%

3443 Fabricated Plate Work ( Boiler Shops) 332313 Plate Work Manufacturing 1,035 2,806,913 100.0%

332410 Power Boiler and Heat Exchanger Manufacturing 472 3,849,100 100.0%

332420 Metal Tank ( Heavy Gauge) Manufacturing 614 4,764,118 100.0%

333415 Air Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing 9 43,264 0.2%

3444 Sheet Metal Work 332322 Sheet Metal Work Manufacturing 4,479 15,957,992 100.0%

332439 Other Metal Container Manufacturing 126 275,440 12.1%

3446 Architectural and Ornamental Metal Work 332323 Ornamental and Architectural Metal Work Manufacturing 1,744 3,536,413 88.2%

3448 Prefabricated Metal Buildings & Components 332311 Prefabricated Metal Building and Component Manufacturing 604 4,199,550 100.0%

3449 Miscellaneous Metal Work 332114 Custom Roll Forming 401 3,074,662 100.0%

332312 Fabricated Structural Metal Manufacturing 152 2,166,021 13.2%

332321 Metal Window and Door Manufacturing 33 364,564 3.6%

332323 Ornamental and Architectural Metal Work Manufacturing 6 91,939 2.3%

3451 Screw Machine Products 332721 Precision Turned Product Manufacturing 2,745 8,326,077 100.0%

3452 Bolts, Nuts, Screws, Rivets,

and Washers 332722 Bolt, Nut, Screw, Rivet, and Washer Manufacturing 1,040 8,134,661 100.0%

3462 Iron and Steel Forgings 332111 Iron and Steel Forging 421 4,924,426 100.0%

3466 Crowns and Closures 332115 Crown and Closure Manufacturing 67 969,982 100.0%

3469 Metal Stamping N. E. C. 332116 Metal Stamping 2,166 12,041,638 100.0%

332214 Kitchen Utensil, Pot, and Pan Manufacturing 77 1,369,914 100.0%

3492 Fluid Power Valves and Hose Fittings 332912 Fluid Power Valve and Hose Fitting Manufacturing 424 6,602,909 100.0%

3493 Steel Springs 332611 Spring ( Heavy Gauge) Manufacturing 129 761,711 100.0%

3494 Valves & Pipe Fittings,

Except Brass 332919 Other Metal Valve and Pipe Fitting Manufacturing 222 2,753,397 94.4%

332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 23 73,983 0.7%

3495 Wire Springs 332612 Spring ( Light Gauge) Manufacturing 394 2,481,151 100.0%

334518 Watch, Clock, and Part Manufacturing 2 0 2.5% b A 14 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3496 Miscellaneous Fabricated Wire Products 332618 Other Fabricated Wire Product Manufacturing 1,253 4,587,656 87.3%

3498 Fabricated Pipe and Fabricated Pipe Fitting 332996 Fabricated Pipe and Pipe Fitting Manufacturing 856 4,024,999 100.0%

3499 Fabricated Metal Products N. E. C. 332117 Powder Metallurgy Part Manufacturing 128 1,317,301 100.0%

332439 Other Metal Container Manufacturing 98 273,541 12.1%

332510 Hardware Manufacturing 58 435,815 4.0%

332919 Other Metal Valve and Pipe Fitting Manufacturing 7 0 1.7% b 332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 2,592 7,558,137 71.9%

337215 Showcase, Partition, Shelving, and Locker Manufacturing 78 123,057 1.5%

339914 Costume Jewelry and Novelty Manufacturing 82 49,953 3.9%

3541 Machine Tools, Metal Cutting Types 333512 Machine Tool ( Metal Cutting Types)

Manufacturing 393 5,183,521 97.2%

3542 Machine Tools, Metal Forming Types 333513 Machine Tool ( Metal Forming Types)

Manufacturing 225 2,255,011 100.0%

3544 Special Dies & Tools, Die Sets, Jigs, Etc. 333511 Industrial Mold Manufacturing 2,529 5,116,635 100.0%

333514 Special Die and Tool, Die Set, Jig, and Fixture Manufacturing 4,746 8,244,855 100.0%

3545 Machine Tool Access &

Measuring Devices 332212 Hand and Edge Tool Manufacturing 185 714,277 10.8%

333515 Cutting Tool and Machine Tool Accessory Manufacturing 1,920 5,347,173 100.0%

3546 Power Driven Hand Tools 333991 Power Driven Handtool Manufacturing 217 3,609,779 100.0%

3965 Fasteners, Buttons, Needles,

Pins 339993 Fastener, Button, Needle, and Pin Manufacturing 249 0 99.2% b Household Equipment 2514 Metal Household Furniture 337124 Metal Household Furniture Manufacturing 420 2,422,853 100.0%

2522 Office Furniture, Except Wood 337214 Office Furniture ( except Wood)

Manufacturing 359 8,230,935 100.0%

2531 Public Buildng & Relatd Furniture 336360 Motor Vehicle Seating and Interior Trim Manufacturing 184 6,060,320 57.1%

337127 Institutional Furniture Manufacturing 267 1,697,870 41.9%

339942 Lead Pencil and Art Good Manufacturing 17 110,985 9.0%

2542 Partitions & Fixtures, Exc Wood 337215 Showcase, Partition, Shelving, and Locker Manufacturing 926 5,249,474 65.6%

2591 Drapery Hardware and Window Blinds/ Shades 337920 Blind and Shade Manufacturing 488 2,393,564 100.0%

2599 Furniture and Fixtures,

N. E. C. 337127 Institutional Furniture Manufacturing 727 2,305,770 57.0%

339113 Surgical Appliance and Supplies Manufacturing 16 645,688 4.2%

A 15 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3431 Metal Sanitary Ware 332998 Enameled Iron and Metal Sanitary Ware Manufacturing 88 1,575,505 100.0%

3432 Plumbing Fittings and Brass Goods 332913 Plumbing Fixture Fitting and Trim Manufacturing 116 3,590,128 100.0%

332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 5 118,059 1.1%

3442 Metal Doors, Sash, and Trim 332321 Metal Window and Door Manufacturing 1,384 9,876,049 96.4%

3631 Household Cooking Equipment 335221 Household Cooking Appliance Manufacturing 84 3,543,231 100.0%

3632 Household Refrig. & Home & Farm & Freezers 335222 Household Refrigerator and Home Freezer Manufacturing 27 4,887,364 100.0%

3633 Household Laundry Equipment 335224 Household Laundry Equipment Manufacturing 17 3,723,375 100.0%

3634 Electric Housewares and Fans 333414 Heating Equipment ( except Warm Air Furnaces) Manufacturing 16 329,270 8.9%

335211 Electric Housewares and Household Fan Manufacturing 138 3,488,251 100.0%

3635 Household Vacuum Cleaners 335212 Household Vacuum Cleaner Manufacturing 34 2,399,206 100.0%

3639 Household Appliances N. E. C. 333298 All Other Industrial Machinery Manufacturing 4 0 0.2% b 335228 Other Major Household Appliance Manufacturing 36 3,300,662 100.0%

3641 Electric Lamps 335110 Electric Lamp Bulb and Part Manufacturing 82 3,306,009 100.0%

3643 Current Carrying Wiring Devices 335931 Current Carrying Wiring Device Manufacturing 519 5,877,522 100.0%

3644 Noncurrent Carrying Wiring Devices 335932 Noncurrent Carrying Wiring Device Manufacturing 219 4,451,186 100.0%

3645 Residential Electrical Lighting Fixtures 335121 Residential Electric Lighting Fixture Manufacturing 497 2,177,355 96.6%

3646 Commercial, Industrial, and Institutional 335122 Commercial, Industrial, and Institutional Electric Lighting Fixture Manufacturing 356 4,047,437 100.0%

3648 Lighting Equipment N. E. C. 335129 Other Lighting Equipment Manufacturing 327 3,054,806 100.0%

3651 Radio/ Television Sets Except Commun. Types 334310 Audio and Video Equipment Manufacturing 554 8,454,194 100.0%

7623 Refrig, air condition 811310 Commercial and Industrial Machinery and Equipment ( except Automotive and Electronic) Repair and Maintenance 2,343 1,890,237 10.8%

811412 Appliance Repair and Maintenance 1,671 789,622 19.9%

Instruments 3812 Search, Det, Nav, Ggnc,

Aero, Naut Sys/ Inst 334511 Search, Detection, Navigation, Guidance,

Aeronautical, and Nautical System and Instrument Manufacturing 680 32,497,776 99.8%

3821 Laboratory Apparatus and Furniture 339111 Laboratory Apparatus and Furniture Manufacturing 385 2,471,153 100.0%

A 16 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3822 Automatic Environmental Controls 334512 Automatic Environmental Control Manufacturing for Residential, Commercial,

and Appliance Use 317 2,935,692 100.0%

3823 Process Control Instruments 334513 Instruments and Related Products Manufacturing for Measuring, Displaying,

and Controlling Industrial Process Variables 1,002 7,890,923 100.0%

3824 Fluid Meters and Counting Devices 334514 Totalizing Fluid Meter and Counting Device Manufacturing 222 3,765,769 100.0%

3825 Instruments to Measure Electricity 334416 Electronic Coil, Transformer, and Other Inductor Manufacturing 17 24,303 1.6%

334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals 826 13,852,897 100.0%

3826 Laboratory Analytical Instruments 334516 Analytical Laboratory Instrument Manufacturing 664 7,157,038 99.5%

3827 Optical Instruments and Lenses 333314 Optical Instrument and Lens Manufacturing 495 3,174,652 99.8%

3829 Measuring and Controlling Devices N. E. C. 334519 Other Measuring and Controlling Device Manufacturing 853 5,114,547 99.9%

339112 Surgical and Medical Instrument Manufacturing 6 62,148 0.3%

3841 Surgical & Medical Instruments & Apparatus 339112 Surgical and Medical Instrument Manufacturing 1,598 18,450,024 99.7%

3842 Orthopedic, Prosthetic &

Surgical Suppl. 322121 Paper ( except Newsprint) Mills 2 0 1.4% b 322291 Sanitary Paper Product Manufacturing 16 651,398 6.7%

334510 Electromedical and Electrotherapeutic Apparatus Manufacturing 74 807,427 7.1%

339113 Surgical Appliance and Supplies Manufacturing 1,636 14,743,779 95.8%

3843 Dental Equipment and Supplies 339114 Dental Equipment and Supplies Manufacturing 877 2,699,867 100.0%

3844 X Ray Apparatus and Tubes 334517 Irradiation Apparatus Manufacturing 155 3,942,256 100.0%

3845 Electromedical Equipment 334510 Electromedical and Electrotherapeutic Apparatus Manufacturing 460 10,567,566 92.5%

3851 Ophthalmic Goods 339115 Ophthalmic Goods Manufacturing 575 3,607,813 100.0%

7629 Electric repair shop 811212 Computer and Office Machine Repair and Maintenance 1,538 913,258 10.7%

811213 Communication Equipment Repair and Maintenance 201 231,458 14.4%

811219 Other Electronic and Precision Equipment Repair and Maintenance 2,033 2,509,452 86.1%

811411 Home and Garden Equipment Repair and Maintenance 579 185,507 18.5%

811412 Appliance Repair and Maintenance 4,327 3,125,853 78.6%

A 17 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value Iron and Steel 3315 Steel Wiredrawing and Steel Nails and Spikes 331222 Steel Wire Drawing 273 4,920,798 100.0%

332618 Other Fabricated Wire Product Manufacturing 31 370,492 7.0%

3316 Cold Rolled Steel Sheet,

Strip, and Bars 331221 Rolled Steel Shape Manufacturing 186 6,343,466 100.0%

3317 Steel Pipe and Tubes 331210 Iron and Steel Pipe and Tube Manufacturing from Purchased Steel 235 7,565,377 100.0%

Job Shop 3471 Plating and Polishing 332813 Electroplating, Plating, Polishing, Anodizing,

and Coloring 3,404 5,979,405 100.0%

3479 Metal Coating & Allied Services 332812 Metal Coating, Engraving ( except Jewelry and Silverware), and Allied Services to Manufacturers 2,156 8,460,896 100.0%

339911 Jewelry ( except Costume) Manufacturing 22 5,798 0.1%

339914 Costume Jewelry and Novelty Manufacturing 16 2,257 0.2%

339912 Silverware and Hollowware Manufacturing 12 6,296 0.7%

Mobile Industrial Equipment 3523 Farm Machinery and Equipment 332212 Hand and Edge Tool Manufacturing 1 0 0.1% b 332323 Ornamental and Architectural Metal Work Manufacturing 140 380,152 9.5%

333111 Farm Machinery and Equipment Manufacturing 1,339 15,921,455 100.0%

333922 Conveyor and Conveying Equipment Manufacturing 28 33,377 0.5%

3524 Garden Tractors & Lawn &

Garden Equipment 332212 Hand and Edge Tool Manufacturing 3 0 0.3% b 333112 Lawn and Garden Tractor and Home Lawn and Garden Equipment Manufacturing 145 7,454,511 100.0%

3531 Constr Mach and Eq 333120 Construction Machinery Manufacturing 785 21,965,455 100.0%

333923 Overhead Traveling Crane, Hoist, and Monorail System Manufacturing 87 1,805,198 57.4%

336510 Railroad Rolling Stock Manufacturing 25 346,760 4.2%

3532 Mining Mach. & Equip.,

Except Oil Field 333131 Mining Machinery and Equipment Manufacturing 292 2,710,923 100.0%

3536 Hoists, Industrial Cranes &

Monorails 333923 Overhead Traveling Crane, Hoist, and Monorail System Manufacturing 220 1,340,561 42.6%

3537 Industrial Trucks, Tractors,

Trailers 332439 Other Metal Container Manufacturing 4 6,775 0.3%

332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 19 27,488 0.3%

333924 Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing 461 5,538,326 100.0%

3795 Tanks and Tank Components 336992 Military Armored Vehicle, Tank, and Tank Component Manufacturing 37 0 86.0% b A 18 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value Motor Vehicle 3465 Automotive Stampings 336370 Motor Vehicle Metal Stamping 810 23,668,110 100.0%

3592 Carburetors, Piston Rings,

Valves 336311 Carburetor, Piston, Piston Ring, and Valve Manufacturing 141 2,755,311 100.0%

3647 Vehicular Lighting Equipment 336321 Vehicular Lighting Equipment Manufacturing 106 3,282,824 100.0%

3694 Electrical Equipment for Motor Vehicles 336322 Other Motor Vehicle Electrical and Electronic Equipment Manufacturing 569 9,074,335 53.6%

3711 Motor Vehicle and Automobile Bodies 336111 Automobile Manufacturing 194 95,385,563 100.0%

336112 Light Truck and Utility Vehicle Manufacturing 112 110,400,169 100.0%

336120 Heavy Duty Truck Manufacturing 84 14,490,344 100.0%

336211 Motor Vehicle Body Manufacturing 76 82,633 0.9%

336992 Military Armored Vehicle, Tank, and Tank Component Manufacturing 6 0 14.0% b 3714 Motor Vehicle Parts and Accessories 336211 Motor Vehicle Body Manufacturing 23 265,552 2.9%

336312 Gasoline Engine and Engine Parts Manufacturing 881 25,974,369 100.0%

336322 Other Motor Vehicle Electrical and Electronic Equipment Manufacturing 193 6,446,681 38.1%

336330 Motor Vehicle Steering and Suspension Components ( except Spring) Manufacturing 212 10,750,312 100.0%

336340 Motor Vehicle Brake System Manufacturing 269 10,033,288 100.0%

336350 Motor Vehicle Transmission and Power Train Parts Manufacturing 523 33,288,093 100.0%

336399 All Other Motor Vehicle Parts Manufacturing 1,508 34,193,298 99.6%

3716 Mobile Homes 336213 Motor Home Manufacturing 88 3,943,709 100.0%

3751 Motorcycles 336991 Motorcycle, Bicycle, and Parts Manufacturing 385 0 99.0% b 3792 Travel Trailers and Campers 336214 Travel Trailer and Camper Manufacturing 315 3,076,049 67.4%

3799 Miscellaneous Transportation Equipment 332212 Hand and Edge Tool Manufacturing 1 0 0.1% b 336214 Travel Trailer and Camper Manufacturing 498 1,485,367 32.6%

336999 All Other Transportation Equipment Manufacturing 378 4,557,989 100.0%

4121 Taxicabs 485310 Taxi Service 3,184 1,280,597 100.0%

5013 Motor Vehicle Supplies and New Parts 421120 Motor Vehicle Supplies and New Parts Wholesalers 12,620 83,214,728 100.0%

441310 Automotive Parts and Accessories Stores 16,253 22,093,428 51.2%

5511 Motor Vehicle Dealers ( New and Used) 441110 New Car Dealers 25,897 518,971,824 100.0%

5521 Motor Vehicle Dealers ( Used Only) 441120 Used Car Dealers 23,340 34,680,468 100.0%

5561 Recreational Vehicle Dealers 441210 Recreational Vehicle Dealers 3,014 10,069,749 100.0%

A 19 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 5571 Motorcycle Dealers 441221 Motorcycle Dealers 3,635 7,369,260 100.0%

5599 Automotive Dealers, N. E. C. 441229 All Other Motor Vehicle Dealers 1,678 2,517,267 100.0%

7514 Passenger Car Rental 532111 Passenger Car Rental 4,367 14,783,704 100.0%

7515 Passenger Car Lease 532112 Passenger Car Leasing 879 3,800,424 100.0%

7519 Utility Trailer and Recreational Vehicle Rental 532120 Truck, Utility Trailer, and RV ( Recreational Vehicle) Rental and Leasing 360 256,119 2.5%

7532 Top, Body, and Upholstery Repair and Paint Shops 811121 Automotive Body, Paint, and Interior Repair and Maintenance 35,569 17,755,296 100.0%

7533 Auto Exhaust Systems 811112 Automotive Exhaust System Repair 5,251 1,985,377 100.0%

7537 Auto Transmission Repair 811113 Automotive Transmission Repair 6,768 2,431,584 100.0%

7538 Gen Automotive Repair 811111 General Automotive Repair 77,751 25,598,455 100.0%

7539 Auto Repair Shop, N. E. C. 811118 Other Automotive Mechanical and Electrical Repair and Maintenance 9,674 3,494,643 100.0%

7549 Auto Services, Except Repair and Carwashes 488410 Motor Vehicle Towing 5,893 2,295,188 100.0%

811191 Automotive Oil Change and Lubrication Shops 7,413 2,787,318 100.0%

811198 All Other Automotive Repair and Maintenance 1,646 798,626 73.5%

Office Machine 3571 Electronic Computers 334111 Electronic Computer Manufacturing 563 66,331,909 100.0%

3572 Typewriters 334112 Computer Storage Device Manufacturing 211 13,907,367 100.0%

3575 Computer Terminals 334113 Computer Terminal Manufacturing 142 1,483,460 100.0%

3577 Computer Peripheral Eq N. E. C. 334119 Other Computer Peripheral Equipment Manufacturing 1,006 25,130,308 93.1%

3578 Calculating, Accounting Machines Except Computers 333313 Office Machinery Manufacturing 35 144,380 4.5%

334119 Other Computer Peripheral Equipment Manufacturing 61 1,870,426 6.9%

3579 Office Machines, N. E. C. 333313 Office Machinery Manufacturing 134 3,047,549 95.5%

334518 Watch, Clock, and Part Manufacturing 16 0 19.6% b 339942 Lead Pencil and Art Good Manufacturing 13 257,020 20.8%

7378 Computer Maintenance and Repairs 811212 Computer and Office Machine Repair and Maintenance 6,087 7,565,169 89.0%

7379 Computer Related Services,

N. E. C. 334611 Software Reproducing 124 1,258,435 100.0%

541512 Computer Systems Design Services 20,233 15,942,861 31.1%

541519 Other Computer Related Services 8,405 4,339,989 100.0%

Ordnance 3482 Small Arms Ammunition 332992 Small Arms Ammunition Manufacturing 113 938,818 100.0%

3483 Ammunition, Except for Small Arms 332993 Ammunition ( except Small Arms)

Manufacturing 53 1,497,045 100.0%

3484 Small Arms 332994 Small Arms Manufacturing 198 1,251,792 100.0%

A 20 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3489 Ordnance and Accessories,

N. E. C. 332995 Other Ordnance and Accessories Manufacturing 70 1,750,485 100.0%

Miscellaneous Metal Products 3497 Metal Foil and Leaf 322225 Laminated Aluminum Foil Manufacturing for Flexible Packaging Uses 43 1,546,143 100.0%

332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 64 1,711,600 16.3%

3861 Photographic Equipment &

Supplies 325992 Photographic Film, Paper, Plate, and Chemical Manufacturing 311 12,895,637 100.0%

333315 Photographic and Photocopying Equipment Manufacturing 428 8,410,124 100.0%

3931 Musical Instruments 339992 Musical Instrument Manufacturing 576 1,356,651 100.0%

3944 Games, Toys, Children's Vehicles 336991 Motorcycle, Bicycle, and Parts Manufacturing 4 0 1.0% b 339932 Game, Toy, and Children's Vehicle Manufacturing 785 4,534,497 100.0%

3949 Sporting and Athletic Goods,

N. E. C. 339920 Sporting and Athletic Goods Manufacturing 2,571 10,591,160 100.0%

3951 Pens and Mechanical Pencils 339941 Pen and Mechanical Pencil Manufacturing 112 1,590,770 100.0%

3953 Marking Devices 339943 Marking Device Manufacturing 634 643,007 100.0%

3993 Signs and Advertising Displays 339950 Sign Manufacturing 5,709 7,910,809 100.0%

3995 Burial Caskets 339995 Burial Casket Manufacturing 177 1,271,184 100.0%

3999 Manufacturing Industries,

N. E. C. 314999 All Other Miscellaneous Textile Product Mills 52 173,353 2.8%

316110 Leather and Hide Tanning and Finishing 26 24,625 0.7%

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 9 80,624 0.6%

326199 All Other Plastics Product Manufacturing 140 319,241 0.5%

332212 Hand and Edge Tool Manufacturing 7 0 0.6% b 332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 185 285,362 2.7%

335121 Residential Electric Lighting Fixture Manufacturing 53 69,864 3.1%

337127 Institutional Furniture Manufacturing 5 28,296 0.7%

339999 All Other Miscellaneous Manufacturing 2,284 7,183,815 85.4%

7692 Welding Repair 811490 Other Personal and Household Goods Repair and Maintenance 4,840 1,640,808 36.8%

A 21 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 7699 Repair Shop, Related Service 488390 Other Support Activities for Water Transportation 12 4,737 0.7%

561622 Locksmiths 3,799 1,081,317 100.0%

561790 Other Services to Buildings and Dwellings 1,254 0 22.4% b 562991 Septic Tank and Related Services 2,538 0 81.8% b 811212 Computer and Office Machine Repair and Maintenance 104 23,844 0.3%

811219 Other Electronic and Precision Equipment Repair and Maintenance 838 404,627 13.9%

811310 Commercial and Industrial Machinery and Equipment ( except Automotive and Electronic) Repair and Maintenance 16,404 13,600,413 77.7%

811411 Home and Garden Equipment Repair and Maintenance 3,032 816,008 81.5%

811412 Appliance Repair and Maintenance 181 59,338 1.5%

811430 Footwear and Leather Goods Repair 82 18,294 7.0%

811490 Other Personal and Household Goods Repair and Maintenance 3,946 1,362,271 30.6%

3873 Watches, Clocks, and Watchcases 334518 Watch, Clock, and Part Manufacturing 128 718,191 77.9%

Precious Metals and Jewelry 3911 Jewelry, Precious Metal 339911 Jewelry ( except Costume) Manufacturing 2,272 5,416,836 99.9%

3914 Silverware, Plated Ware &

Stainless 332211 Cutlery and Flatware ( except Precious)

Manufacturing 11 8,032 0.4%

339912 Silverware and Hollowware Manufacturing 151 899,684 99.3%

3915 Jewelers' Materials &

Lapidary Work 339913 Jewelers' Material and Lapidary Work Manufacturing 394 919,066 100.0%

3961 Costume Jewelry 339914 Costume Jewelry and Novelty Manufacturing 826 1,223,475 95.9%

7631 Watch, Clock, Jewelry Repair 811490 Other Personal and Household Goods Repair and Maintenance 1,716 345,774 7.8%

Printed Circuit Boards 3672 Printed Circuit Boards 334412 Bare Printed Circuit Board Manufacturing 1,401 9,787,576 100.0%

Railroad 3743 Railcars, Railway Systems 336510 Railroad Rolling Stock Manufacturing 207 7,916,635 95.8%

Ships and Boats 3731 Ship Building and Repairing 336611 Ship Building and Repairing 700 10,571,810 100.0%

3732 Boat Building and Repairing 336612 Boat Building 1,043 5,622,040 100.0%

811490 Other Personal and Household Goods Repair and Maintenance 1,739 821,273 18.4%

4412 Deep Sea Foreign Transportation 483111 Deep Sea Freight Transportation 487 11,570,718 100.0%

4424 Deep Sea Domestic Transportation 483113 Coastal and Great Lakes Freight Transportation 292 3,114,639 66.6%

A 22 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 4432 Freight Transportation Great Lakes 483113 Coastal and Great Lakes Freight Transportation 32 519,863 11.1%

4449 Water Transportation of Freight, N. E. C. 483211 Inland Water Freight Transportation 222 2,821,121 83.3%

4481 Deep Sea Passenger Transportation 483112 Deep Sea Passenger Transportation 80 3,908,143 100.0%

483114 Coastal and Great Lakes Passenger Transportation 64 89,597 49.2%

4482 Ferries 483114 Coastal and Great Lakes Passenger Transportation 61 92,493 50.8%

483212 Inland Water Passenger Transportation 76 121,992 41.6%

4489 Water Passenger Transportation, N. E. C. 483212 Inland Water Passenger Transportation 154 171,135 58.4%

487210 Scenic and Sightseeing Transportation, Water 654 861,001 76.3%

4491 Marine Cargo Handling 488310 Port and Harbor Operations 168 889,125 100.0%

488320 Marine Cargo Handling 623 4,456,243 100.0%

4492 Towing & Tugboat Service 483113 Coastal and Great Lakes Freight Transportation 292 1,043,440 22.3%

483211 Inland Water Freight Transportation 161 566,027 16.7%

488330 Navigational Services to Shipping 361 1,014,026 67.0%

4493 Marinas 713930 Marinas 4,217 2,541,481 100.0%

4499 Water Transporation Services, N. E. C. 488330 Navigational Services to Shipping 504 499,176 33.0%

488390 Other Support Activities for Water Transportation 640 444,499 67.7%

532411 Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing 126 454,392 7.1%

Stationary Industrial Equipment 3511 Steam, Gas, Hydraulic Turbines, Generator Units 333611 Turbine and Turbine Generator Set Units Manufacturing 86 5,783,057 100.0%

3519 Internal Combustion Engines,

N. E. C. 333618 Other Engine Equipment Manufacturing 297 0 99.3% b 336399 All Other Motor Vehicle Parts Manufacturing 7 123,954 0.4%

3533 Oil Field Machinery and Equipment 333132 Oil and Gas Field Machinery and Equipment Manufacturing 563 6,240,079 100.0%

3534 Elevators and Moving Stairways 333921 Elevator and Moving Stairway Manufacturing 196 1,607,066 100.0%

3535 Conveyors and Conveying Equipment 333922 Conveyor and Conveying Equipment Manufacturing 871 6,346,525 99.5%

3543 Industrial Patterns 332997 Industrial Pattern Manufacturing 673 623,927 100.0%

3547 Rolling Mill Machinery and Equipment 333516 Rolling Mill Machinery and Equipment Manufacturing 100 700,084 100.0%

3548 Electric and Gas Welding and Soldering 333992 Welding and Soldering Equipment Manufacturing 244 4,433,877 99.8%

3549 Metal Working Machinery,

N. E. C. 333518 Other Metalworking Machinery Manufacturing 474 3,463,811 100.0%

A 23 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3552 Textile Machinery 333292 Textile Machinery Manufacturing 478 1,779,034 100.0%

3553 Woodworking Machinery 333210 Sawmill and Woodworking Machinery Manufacturing 327 1,321,752 100.0%

3554 Paper Industries Machinery 333291 Paper Industry Machinery Manufacturing 366 3,438,235 100.0%

3555 Printing Trades Machinery and Equipment 333293 Printing Machinery and Equipment Manufacturing 546 0 99.1% b 3556 Food Products Mach 333294 Food Product Machinery Manufacturing 597 2,877,841 100.0%

3559 Special Industry Machinery,

N. E. C. 333220 Plastics and Rubber Industry Machinery Manufacturing 455 3,584,992 100.0%

333295 Semiconductor Machinery Manufacturing 257 11,158,627 100.0%

333298 All Other Industrial Machinery Manufacturing 1,677 0 99.8% b 333319 Other Commercial and Service Industry Machinery Manufacturing 78 644,019 6.9%

3561 Pumps and Pumping Equipment 333911 Pump and Pumping Equipment Manufacturing 489 6,826,043 100.0%

3562 Ball and Roller Bearings 332991 Ball and Roller Bearing Manufacturing 185 6,120,940 100.0%

3563 Air and Gas Compressors 333912 Air and Gas Compressor Manufacturing 314 5,633,008 100.0%

3564 Blowers and Exhaust and Ventilation Fans 333411 Air Purification Equipment Manufacturing 370 2,174,729 100.0%

333412 Industrial and Commercial Fan and Blower Manufacturing 204 1,901,196 100.0%

3565 Industrial Patterns 333993 Packaging Machinery Manufacturing 689 4,858,270 100.0%

3566 Speed Changers, High Speed Drivers & Gears 333612 Speed Changer, Industrial High Speed Drive,

and Gear Manufacturing 268 2,402,392 100.0%

3567 Industrial Process Furnaces and Ovens 333994 Industrial Process Furnace and Oven Manufacturing 404 2,871,475 100.0%

3568 Mechanical Power Transmission Equipment,

N. E. C. 333613 Mechanical Power Transmission Equipment Manufacturing 299 3,301,091 100.0%

3569 General Industrial Machinery, N. E. C. 333999 All Other Miscellaneous General Purpose Machinery Manufacturing 1,257 7,991,746 87.5%

3581 Automatic Merchandising Machines 333311 Automatic Vending Machine Manufacturing 121 1,325,960 100.0%

3582 Commercial Laundry Equipment 333312 Commercial Laundry, Drycleaning, and Pressing Machine Manufacturing 68 604,966 100.0%

3585 Refrigeration & Air and Heating Equipment 333415 Air Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing 792 22,846,865 99.8%

336391 Motor Vehicle Air Conditioning Manufacturing 60 5,626,596 100.0%

3586 Measuring and Dispensing Pumps 333913 Measuring and Dispensing Pump Manufacturing 71 1,316,899 100.0%

3589 Service Industry Machines,

N. E. C. 333319 Other Commercial and Service Industry Machinery Manufacturing 1,165 7,596,253 81.3%

A 24 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 3: Relationships between SIC and NAICS Codes Based on 1997 Economic Census for MP& M Industries Evaluated for the Final Rulea ( thousands, 1997$)

SIC SIC Industry NAICS Code 1997 NAICS Industry Number of Establishments Sales,

Shipments or Receipts Share Value 3593 Fluid Power Cylinders and Actuators 333995 Fluid Power Cylinder and Actuator Manufacturing 320 3,528,906 100.0%

3594 Fluid Power Pumps and Motors 333996 Fluid Power Pump and Motor Manufacturing 170 2,712,058 100.0%

3596 Scales and Balances, except Laboratory 333997 Scale and Balance ( except Laboratory)

Manufacturing 122 682,940 100.0%

3599 Machinery, Except Electrical,

N. E. C. 332710 Machine Shops 23,619 27,143,131 100.0%

332999 All Other Miscellaneous Fabricated Metal Product Manufacturing 132 506,611 4.8%

333319 Other Commercial and Service Industry Machinery Manufacturing 50 172,536 1.8%

333999 All Other Miscellaneous General Purpose Machinery Manufacturing 836 1,146,348 12.5%

3612 Transformers 335311 Power, Distribution, and Specialty Transformer Manufacturing 318 4,716,162 100.0%

3613 Switchgear and Switchboard Apparatus 335313 Switchgear and Switchboard Apparatus Manufacturing 583 7,609,164 100.0%

3621 Motors and Generators 335312 Motor and Generator Manufacturing 528 11,788,281 96.3%

3629 Electric Industrial Apparatus,

N. E. C. 335999 All Other Miscellaneous Electrical Equipment and Component Manufacturing 413 2,838,366 41.2%

7353 Heavy Construction Equip Rental, Leasing 234990 All Other Heavy Construction 2,295 2,734,732 8.7%

532412 Construction, Mining, and Forestry Machinery and Equipment Rental and Leasing 3,286 5,339,163 77.4%

7359 Equip Rental, Leasing,

N. E. C. 532210 Consumer Electronics and Appliances Rental 3,011 1,790,890 100.0%

532299 All Other Consumer Goods Rental 3,133 2,133,450 99.1%

532310 General Rental Centers 6,509 3,910,618 100.0%

532411 Commercial Air, Rail, and Water Transportation Equipment Rental and Leasing 498 0 74.3% b 532412 Construction, Mining, and Forestry Machinery and Equipment Rental and Leasing 671 1,555,089 22.6%

532420 Office Machinery and Equipment Rental and Leasing 400 436,178 7.1%

532490 Other Commercial and Industrial Machinery and Equipment Rental and Leasing 3,408 6,775,140 69.7%

562991 Septic Tank and Related Services 563 0 18.2% b a EPA evaluated options for these industrial sectors but did not regulate them all under the final rule.

Share values were calculated using estimated value of shipments data.

N. E. C. = Not Elsewhere Classified b Source: Department of Commerce, Bureau of the Census, 1997 Economic Census, Bridge Between NAICS and SIC; and EPA analysis.

A 25 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information A. 2 ANNUAL ESTABLISHMENT   BIRTHS  AND   DEATHS  IN MP& M INDUSTRIES EVALUATED FOR THE FINAL RULE EPA used the Statistics of U. S. Businesses ( SUSB) dynamic data to estimate the rate at which MP& M facilities evaluated for the final rule enter and leave the industry each year. The SUSB dynamic data report numbers of facilities starting up, closing,

expanding employment and contracting employment each year from 1989 through 1997 ( the latest currently available.)

Table A. 4 shows the average number of facilities ( establishments) operating at the beginning of each year for the period 1989 through 1997, the number of facility   births  and   deaths , and the average   birth rate  and   death rate  for each of the major 3 digit manufacturing SIC codes that include MP& M 4 digit SIC codes evaluated for the final rule. 2 This table shows that,

over the period 1989 1997, annual closure rates ranged from 6 to over 12 percent in the different industries, with an overall average of almost 8 percent.

Table A. 4: Annual Births and Deaths for MP& M Establishments Evaluated for the Final Rule by 3 Digit SIC Codes ( 1989 1997)

SIC SIC Description Average #

Establishments at the Beginning of the Year Average Establishment Births Average Establishment Deaths % Births % Deaths 3410 Metal Cans And Shipping Containers 464 22 35 4.7% 7.5%

3420 Cutlery, Handtools, And Hardware 2,294 143 139 6.2% 6.1%

3430 Plumbing And Heating, Except Electric 687 45 53 6.6% 7.8%

3440 Fabricated Structural Metal Products 12,268 853 908 7.0% 7.4%

3450 Screw Machine Products, Bolts, Etc. 2,436 84 111 3.4% 4.6%

3460 Metal Forgings And Stamping 3,812 199 226 5.2% 5.9%

3470 Metal Services, N. E. C. 5,028 341 340 6.8% 6.8%

3480 Ordnance & Accessories, N. E. C. 390 39 40 10.0% 10.2%

3490 Misc. Fabricated Metal Products 7,084 606 531 8.6% 7.5%

3510 Engines And Turbines 346 26 24 7.5% 6.8%

3520 Farm And Garden Machinery 1,711 133 129 7.8% 7.5%

3530 Construction And Related Machinery 3,165 217 230 6.9% 7.3%

3540 Metalworking Machinery 11,072 672 660 6.1% 6.0%

3550 Special Industry Machinery 4,427 307 317 6.9% 7.1%

3560 General Industrial Machinery 3,961 243 225 6.1% 5.7%

3570 Computer And Office Equipment 2,025 262 246 12.9% 12.1%

3580 Refrigeration And Service Machinery 2,104 154 165 7.3% 7.9%

3590 Industrial Machinery, N. E. C. 21,972 1,996 1,659 9.1% 7.5%

3610 Electric Distribution Equipment 764 53 51 6.9% 6.6%

3620 Electrical Industrial Apparatus 2,024 117 130 5.8% 6.4%

3630 Household Appliances 461 44 41 9.5% 8.9%

2 The data are disaggregated only to the 3 digit SIC level, and EPA therefore was unable to calculate closure rates for the specific 4 digit SICs that comprise the MP& M industries evaluated for the final rule. The analysis does not include 3 digit SICs that may include large numbers of non metal products producers, for example SIC 241 ( furniture, both wood and metal.)

A 26 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information Table A. 4: Annual Births and Deaths for MP& M Establishments Evaluated for the Final Rule by 3 Digit SIC Codes ( 1989 1997)

SIC SIC Description Average #

Establishments at the Beginning of the Year Average Establishment Births Average Establishment Deaths % Births % Deaths 3640 Electric Lighting And Wiring Equipment 1,905 123 143 6.5% 7.5%

3650 Household Audio & Video Equip 766 96 87 12.5% 11.4%

3660 Communications Equipment 1,794 169 159 9.4% 8.9%

3670 Electronic Components And Accessories 6,068 614 522 10.1% 8.6%

3690 Misc. Electrical Equipment &

Supplies 1,890 136 157 7.2% 8.3%

3710 Motor Vehicles And Equipment 4,477 387 372 8.6% 8.3%

3720 Aircraft And Parts 1,633 122 127 7.5% 7.8%

3730 Ship And Boat Building And Repairing 2,669 343 339 12.9% 12.7%

3740 Railroad Equipment 189 15 15 7.9% 7.7%

3750 Motorcycles, Bicycles, & Parts 256 38 25 14.8% 9.7%

3760 Guided Missiles, Space Vehicles,

Parts 127 7 11 5.5% 8.4%

3790 Miscellaneous Transportation Equipment 962 106 109 11.0% 11.3%

3810 Search & Navigation Equipment 758 34 60 4.5% 7.9%

3820 Measuring And Controlling Devices 4,209 275 295 6.5% 7.0%

3840 Medical Instruments And Supplies 3,770 334 289 8.9% 7.7%

3850 Ophthalmic Goods 536 40 48 7.5% 8.9%

3860 Photographic Equip & Supplies 784 71 72 9.1% 9.1%

3870 Watches, Clocks, Watchcases &

Parts 159 12 20 7.5% 12.7%

3910 Jewelry, Silverware, And Plated Ware 2,606 246 275 9.4% 10.6%

3930 Musical Instruments 434 46 35 10.6% 8.0%

3940 Toys And Sporting Goods 2,843 384 345 13.5% 12.1%

3950 Pens, Pencils, Office, & Art Supplies 975 62 70 6.4% 7.2%

3960 Costume Jewelry And Notions 1,010 105 128 10.4% 12.7%

3990 Miscellaneous Manufactures 7,338 784 740 10.7% 10.1%

TOTAL 136,653 11,103 10,698 8.1% 7.8%

N. E. C. = Not Elsewhere Classified Source: Small Business Administration, Statistics of U. S. Businesses.

A 27 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information A. 3 DESCRIPTION OF MP& M SURVEYS EPA used two screener and seven detailed questionnaires ( surveys) issued between 1989 and 1996 to collect financial and technical data from a sample of facilities that were evaluated for regulation under the final MP& M rule ( see Section 3 of the TDD). The responses to these surveys provided the basic financial and economic information used in the facility and firm impact analyses. In addition, the POT W Survey provided information on facility permitting costs associated with regulatory options considered by EPA. The various surveys are described below as they relate to the financial and economic analyses.

The M P& M rulemaking docket provides copies of the survey instruments and detailed information on the conduct of the surveys.

A. 3.1 Screener Surveys In 1990, EPA distributed 8,342 screener surveys to sites believed to be engaged in the original seven Phase I MP& M sectors.

In 1996, EPA distributed 5,325 screener surveys to sites believed to be engaged in the eleven Phase II MP& M sectors. The screener surveys helped EPA to identify sites to receive the more detailed follow up surveys and to make a preliminary assessment of the MP & M industry evaluated for the final rule. EPA identified the SIC codes applicable to the respective MP& M sectors evaluated for the final rule and randomly selected names and addresses in those SICs to receive the screener surveys based on Dun & Bradstreet databases.

A. 3.2 Ohio Screener Surveys EPA also sent the 1996 screener survey to 1,600 randomly selected sites in Ohio to support the Ohio case study.

A. 3.3 Detailed MP& M Industry Surveys Based on responses to the screener surveys, EPA sent a more detailed survey to a selected group of water using MP& M facilities evaluated for the final rule. EPA collected financial and technical data from sample facilities in two phases.

Based on responses to the 1990 screener, EPA sent the Phase I detailed survey to a select group of water using facilities. The Agency designed this survey to collect detailed technical and financial information. EPA selected 1,020 detailed survey recipients from water discharging screener respondents, water using screener respondents that did not discharge process water, and a non randomly selected group of known water discharging facilities that did not receive the screener.

EPA used information from the first two groups of survey recipients to develop pollutant loadings and reductions and to develop compliance cost estimates. Because EPA did not randomly select the third group of recipients, EPA did not use the data to develop national estimates.

To reduce burden on survey recipients for Phase II of the data collection effort, EPA developed two similar detailed surveys.

Based on the development of the 1995 MP& M proposal, EPA chose to collect more detailed information from sites with annual process wastewater discharges greater than one million gallons per year ( 1 MG Y). EPA sent the   long  detailed survey to all 353 1996 screener respondents evaluated for the final rule who indicated they discharged one million or more gallons of process wastewater annually and performed MP& M operations. The Agency sent the   short  detailed survey to 101 randomly selected 1996 screener respondents evaluated for the final rule who indicated they discharged less than one million gallons of process wastewater annually and performed MP& M operations.

The detailed survey responses provide financial, economic, and employment information about the site or the company owning the facility. In addition, the 1996 long detailed questionnaire included a section that requested supplemental information on other facilities owned by the company. EPA included this voluntary section to measure the impact of the final MP& M effluent guidelines on companies with multiple facilities that discharge process wastewater. This section requested the same information collected in the 1996 MP& M screener survey. Responses to questions in this section provided information on the size, industrial sector, revenue, unit operations, and water usage of the company s other facilities.

The 1996 short survey included the identical general facility and economic information collected in the long detailed survey,

with one exception. Short survey recipients were not asked to provide information on the liquidation value of their plant.

A 28 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information A. 3.4 Iron and Steel Survey EPA also developed a detailed survey, under a separate rulemaking effort, to collect detailed information from facilities covered by the Iron and Steel Manufacturing effluent guidelines ( 40 CFR Part 420). Following field sampling of iron and steel sites and review of the completed industry surveys, EPA decided at proposal that some iron and steel operations would be more appropriately covered by the MP& M rule because they were more like MP& M operations. EPA relied on the Iron &

Steel survey for financial and economic information on 47 iron and steel facilities. Commenters on the proposed rule stated that these operations and resulting wastewaters are comparable to those at facilities subject to the Iron and Steel Manufacturing effluent guidelines and that these discharges should remain subject to Part 420 rather than the final MP& M rule. Also at NODA, EPA considered including in the Steel Forming and Finishing subcategory wastewater discharges resulting from continuous electroplating of flat steel products ( e. g., strip, sheet, and plate). EPA also relied on the Iron &

Steel survey for financial and economic information on these 24 iron and steel facilities. EPA re examined its database for facilities that perform continuous steel electroplating, and found that, contrary to its initial finding, continuous electroplaters do not perform operations similar to other facilities in this subcategory ( i. e., steel forming and finishing facilities performing cold forming on steel wire, rod, bar, pipe, and tube). Thus, EPA included continuous electroplaters performing electroplating and coating operations in the General Metals subcategory for analyses supporting the final rule. As described in Section VI of the preamble to the final rule, EPA is not revising limitations or standards for any of these facilities. Such facilities will continue to be regulated by the General Pretreatment Standards ( Part 403), local limits, permit limits, and Iron & Steel effluent limitations guidelines ( Part 420), as applicable.

A. 3.5 Municipality Survey EPA distributed surveys in 1996 to city and county facilities that might operate facilities engaged in MP& M operations evaluated for the final rule. The Agency designed this survey to measure the rule s impact on municipalities and other government entities that perform maintenance and rebuilding operations on MP& M products ( e. g., bus and truck,

automobiles). The Agency sent the municipality survey to 150 city and county facilities randomly selected from the Municipality Year Book 1995 based on population and geographic location. EPA allocated sixty percent of the sample to municipalities and 40 percent to counties. The 60/ 40 distribution was approximately proportional to their aggregate populations in the frame. EPA divided the municipality sample and the county sample into three size groupings as measured by population. The surveys collected information on costs of service and on the financial and economic characteristics of the governments operating these facilities.

A. 3.6 Federal Facility Survey EPA designed this survey to assess the impact of the MP& M effluent limitations guidelines and standards on federal agencies that operate MP& M facilities. EPA distributed the survey to federal agencies likely to perform industrial operations on metal products or machines. The Agency requested that the representatives of the seven chosen federal agencies voluntarily distribute copies of the survey to sites they believed performed MP& M operations. The information collected in the 1996 federal survey was identical to the long survey. After engineering review and coding, EPA entered data from 44 federal surveys into the database. Because EPA did not randomly select the survey recipients, data from these questionnaires were not used to develop national estimates.

A. 3.7 POTW Survey EPA distributed the Publicly Owned Treatment Works ( POTW ) survey in November 1997. The Agency designed this survey to estimate possible costs and burden that POTWs might incur in administering MP& M permits or other control instruments and to estimate benefits from implementation of the options considered for the final rule. The Agency sent the POTW Survey to 150 POTWs with flow rates greater than 0.50 million gallons per day. EPA randomly selected the recipients from the 1992 Needs Survey Review, Update, and Query System Database ( RUQus), and divided the POTW sample into two strata by daily flow rates: 0.50 to 2.50 million gallons, and 2.50 million gallons or more.

In addition to the total volume of wastewater treated at the site, the POTW Survey requested the number of industrial permits written, the cost to write the permits, the permitting fee structure, the percentage of industrial dischargers covered by National Categorical Standards ( i. e., effluent guidelines), and the percentage of permits requiring specific administrative activities.

EPA used this information to estimate administrative burden and costs. In addition, EPA requested information on the use or disposal of sewage sludge generated by the POTW. The Agency only required POTWs that received discharges from an MP& M facility to complete those questions. The POTW Survey requested the following sewage sludge information: amount A 29 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information generated, use or disposal method, metal levels, use or disposal costs, and the percentage of metal loadings from MP& M facilities. The Agency used this information to assess the potential changes in sludge handling resulting from the MP& M rule and to estimate economic benefits of these options to the POTW.

A 30 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information REFERENCES U. S. Department of Commerce. 2000. U. S. Bureau of the Census. The Bridge Between NAICS and SIC Report. March.

http:// www. census. gov/ epcd/ www/ naicensu. html U. S. Department of Commerce. 2001. U. S. Bureau of the Census. Manufacturing Industry Series: Industry Stats on NAICS Basis with Distribution Among 1987 SIC Based Industries. ECON97S Report Series CD Rom.

Small Business Administration. Statistics of U. S. Businesses. http:// www. sba. gov/ advo/ stats/ int_ data. html A 31 MP& M EEBA: Appendices Appendix A: Detailed Economic Impact Analysis Information THIS PAGE INTENTIONALLY LEFT BLANK A 32 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis INTRODUCTION This appendix presents the methodology and results from the analysis of cost pass through ( CPT) potential for 19 MP& M sectors. 1 This analysis consists of two parts:

1. an econometric analysis of the historical relationship of output prices to changes in input costs, and 2. an analysis of market structure characteristics.

These two analyses together provide a numerical estimate of how much of compliance related cost increases a sector can be expected to pass on to its consumers.

The rest of this appendix is organized into the following six sections:

  B. 1: Rationale for developing sector specific CPT coefficients as opposed to firm specific CPT coefficients;

  B. 2: Econometric analysis of CPT potential,

based on the historical changes in output prices relative to changes in input costs;

  B. 3: Analysis of the market structure factors expected to affect cost recovery; Appendix B: Cost Pass Through Analysis APPENDIX CONTENTS B. 1 hoice of Sector Specific CPT Coefficients ........ B 1 B. 2 etric Analysis ................. ............ B 2 B. 2.1 ework ................. ............... B 3 B. 2.2 Used to Estimate the Regression Equation ................. ................. . B 4 B. 2.3 ession Results ................. ......... B 6 B. 3 t Structure Analysis ................. ........ B 9 B. 3.1 es Descriptions ................. ...... B 9 B. 3.2 s ................. ................. B 13 B. 4 dation of Econometrically Estimated CPT Coefficients ................. ................. . B 16 B. 4.1 etal Products ................. ...... B 17 B. 4.2 ................. ............... B 17 B. 4.3 le ................. ........... B 18 B. 4.4 raft ................. ................ B 18 B. 4.5 trial Equipment ................ B 18 B. 4.6 ................. .............. B 18 B. 5 ..... B 18 Attachment B. A: Selected Review of CPT Literature ....... B 20 B. A. 1 Firm Specific Cost Pass Through Rate.  ......... B 20 B. A. 2 ge Rate Pass Through ................ B 20 B. A. 3 ax Pass Through ................. ....... B 20 B. A. 4 ................. ............ B 20 Acronyms ................. ................. ....... B 22 The C Econom Fram Data Regr Marke Measur Result Vali Other M Job Shops Motor Vehic Airc Mobile Indus Aerospace Adjusting Estimates of Compliance CPT Potential Ashenfelter et al. ( 1998),   Identifying the Exchan T Studies Cited   B. 4: Validation of econometric estimates of the CPT coefficients;

  B. 5: Adjustment of estimated CPT coefficients to reflect the portion of an MP& M sector that will incur compliance costs; and   B. 6: Attachment: Findings from a review of the CPT literature.

B. 1 THE CHOICE OF SECTOR SPECIFIC CPT COEFFICIENTS EPA believes the use of sector specific CPT coefficients instead of firm specific CPT coefficients in the impact analysis is an appropriate and practical way of analyzing compliance CPT. The sector wide rate provides an estimate of the change in each facility s output prices as a function of the regulation induced increase in its production costs, assuming that the same cost increase is experienced by all establishments competing with the facilities in question. For MP& M sectors in which a large fraction of establishments will be affected by the regulation, it is reasonable to assume that the MP& M compliance cost acts 1 The analysis of cost pass through potential presented here refines in several places the methodology developed for the Phase I MP& M analysis. These refinements are highlighted at the appropriate stages of the discussion that follows.

B 1 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis like an industry wide cost shock. As noted below in section five, EPA applies an additional adjustment to the estimated CPT rate to reflect the fraction of total sector output that is estimated to incur regulation induced production cost increases.

In contrast to the concept of a sector specific CPT adjustment, a firm specific CPT rate relates a change in the prices charged by a specific firm to a change in its production costs, assuming no change in the production cost for rival producers of that product. Not surprisingly, previous studies have found that the CPT rate for changes on an individual firm s costs differs from the rate at which a firm would pass through cost changes that are common to all, or a substantial fraction of, firms in an industry ( e. g., Ashenfelter et al., 1998). It is true, however, that firms in an industry will have differing CPT among each other to some extent for reasons such as, differentiated products ( e. g., products of different firms are not commodities and are not perfectly substitutable); imperfectly competitive markets ( e. g., markets in which individual firms possess different degrees of market power); and segmented markets ( e. g., geographically segmented markets). In the presence of such imperfections,

individual firms will very likely respond differently in their ability to pass on cost increases in higher output prices even when the production cost increase applies to all, or a substantial fraction, of an industry s production. Nonetheless, estimating the CPT ability of individual firms or sub sector groups of firms within the MP& M sectors would require a detailed analysis of market segments and substitutability of MP& M products. While this effort may be theoretically possible, it would be highly expensive and an overall daunting challenge given the breadth of the MP& M industry sectors.

Therefore, this analysis of CPT potential in the MP& M industry is undertaken at the sector specific level under the assumption of perfect competition in these sectors  including product homogeneity ( i. e., products produced by one firm are perfect substitutes for products produced by other firms), and homogeneity of production technology and cost across firms ( i. e., pricing is at marginal cost). 2 Under these conditions, the price response to a general industry wide change in production costs is likely to be industry wide and similar across all firms.

B. 2 ECONOMETRIC ANALYSIS EPA performed an econometric analysis of input costs and output prices to estimate historical CPT elasticities for 18 of the 19 Phase I and Phase II MP& M Sectors. EPA could not estimate historical CPT coefficients for Aerospace due to data limitations. These elasticities indicate the changes in output prices by sector that have occurred historically in relation to changes in the cost of production inputs. Two factors determine the share of a cost increase that a facility can pass through to its customers: the elasticity of demand and the elasticity of supply in the facility's market. Both factors are difficult to measure accurately; among other reasons, observed changes in price are due to simultaneous changes in demand and supply.

In view of this difficulty, this pass through analysis does not decompose cost pass through into the separate effects stemming from elasticity of demand and elasticity of supply.

An additional analytic challenge involves joint consideration of quantity and price effects. Specifically, the amount of cost increase that a firm may recover through a revenue increase may generally be decomposed into a change in price and a change in quantity sold. In most markets, increased prices ( in response to increased costs) translate into reduced quantity of sales.

The interaction of supply and demand elasticities determines whether or not total revenue increases.

For practical reasons, this analysis focused on the change in equilibrium price due to a change in input costs and furthere assumes that the sale quantities of businesses complying with the regulation do not change. The analysis determined changes in market quantities from closures rather than by estimating output changes in non closing facilities. The analysis assumed that the quantity of shipments or sales does not vary with the increase in fixed and average costs unless the facility closes.

The following grounds support this restriction:

  The cost model for the individual facility reflects a constant marginal cost relationship. The change in quantity of output at a facility is a function of the change in equilibrium price and the marginal cost relationship at the facility. For instance, in the case in which marginal cost increases with output, an upward shift in the marginal cost relationship due to compliance costs will generally cause a facility to reduce its production quantity. The extent of changes in production quantity will vary across facilities based on the shift in marginal cost and the rate at which marginal cost changes with production. Engineering analysis of facilities provides no information, however, about any change in the marginal cost relationship for a given facility, providing only lump sum costs. In lieu of this information, the analysis uses constant marginal costs, which in turn means that 2 These assumptions likely approximate the real world for those MP& M sectors that consist of a large number of small, highly competitive firms such as Job Shops or Printed Wiring Boards.

B 2 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis profit seeking facilities will tend not to change their output quantities in response to added costs resulting from regulation. As a result, the only quantity related decision that can be meaningfully analyzed at the facility level is whethe r to term inate production com pletely.

  An estimate of quantity response would be based on the aggregate industry response and would not be logically ap plicable to the facility level analysis. An an alysis can estimate quan tity elasticity resp onse to changes in input costs, but this value would represent the aggregate quantity response in the particular MP& M sector. The aggregate response encompasses a diversity of responses across facilities: a few facilities may eliminate production entirely while others may reduce, keep the same, or even increase output. Applying the aggregate quantity response to individual facilities while simultaneously allowing for terminated production would exaggerate the likely facility level quantity response and the likelihood of facility closures. The current analysis simulates the aggregate response from a micro analytic perspective: exiting facilities that found compliance to be an uneconomic proposition affect the industry wide quantity response.

B. 2.1 The analysis measured the sensitivity of equilibrium prices to changes in input costs. t elasticity of price,  denoted Ep, measured the percentag e change in o utput price pe r percent cha nge in unit input costs. 3 EPA estim ated the cost elasticity of price by regressing annual output price indices on annual input price indices. The methodology s direct estimation measured actual changes in output price with respect to changes in input costs. ook into account the full range of possible mechanisms by which input costs affect output prices, including technical changes, substitution, non competitive pricing mechanisms, imperfect information phenome na, and any other shifts or irregularities in the supply and demand functions.

Th e 19 M P& M industry se ctors e ncompa ss 224 industrial 4 d igit SIC cod es. A, ho weve r, could estim ate the c ost elastic ity of price based on historical data for only 170 manufacturing SIC codes. EPA could not estimate the cost elasticity of price for Aerospace and non manufacturing industries due to data limitations, but assigned a CPT coefficient to the aerospace sector based on the market structure analysis ( see Section 2 for details, below). 4 EPA assumed zero CP T for non manufacturing industries because these industries tend to be very competitive.

For each MP& M sector, EPA estimated a relationship for the k = 1 to10 yearly observations ( from 1987 to 1996) by least squares linear regression, as follow s:

( B 1)

where :

Pout, k = price index for the bundle of goods produced by the MP & M sector, year k;

Ep = elasticity of output price with respect to input costs for a given MP& M sector;

Pin, k 1 = price index of inputs ( labor and non labor) to a given sector, year k 1;

b = elasticity of output price with respect to em ploymen t costs;

  = error term; and ln( x) = natural log of x Specifying the key regression variables as logarithms permitted EPA to estimate the elasticities of output prices with respect to the ind ependent variab les directly. at is: Framework The   cos This practice t EP Th 3 The elasticity measure also applies to revenue because quantity of production is assumed constant.

4 Output Price Index data for the Aerospace sector were unavailable. EPA attempted to use proxy data for missile manufacturing,, a component of the defense sector, to estimate a CPT coefficient for the Aerospace sector. This analysis did not produce meaningful results. The missile manufacturing industry witnessed a sharp decline in producer prices during the 1987 1996 time period, therefore yielding a negative CPT coefficient for the Aerospace sector. Since the Aerospace sector and the missile manufacturing industry are sufficiently different from each other, EPA decided not to use the estimated CPT coefficient and instead derive a coefficient for the Aerospace sector based solely on the market structure analysis.

B 3 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis ( B 2)

which is the elasticity of output price with respect to input cost changes in the previous year.

EP A s use of the logarithm ic transfo rmatio ns also eliminated an y linear tren d ov er time; in effect, the ind ividua l yearly observatio ns becom e cross sectional variables. he mo del therefore required no specific time serie s structure .

EPA considered additional independent variables that might aid in explaining output price changes. or example, EPA included some measures of aggregate income, but these measures did not contribute significantly to the estimated relationships.

The coefficients Ep from this regression are the estimated cost elasticities of price for each MP& M sector. imated coefficients address the question: over the period of analysis, by how much did output prices change as input costs increased?

Th e value of Ep for each secto r, linked with other information o n market structure, yielded a comp osite measure of cost pass through potential by M P& M sector. ussed below, EP A used the re sults of the m arket stru cture analysis to valida te the estim ated v alues o f Ep, which represent the expected CPT potential for the different MP& M sectors.

validated Ep values are the CP T co efficients ultimately assigned to sec tors for the econo mic/ financial impact ana lysis.

B. 2.2 ata Used to Estimate the Regression Equation Estimating Ep required a measure of the change over time in input costs and a measure of the change in output price for each MP & M sector. akes time to respond to price changes ( i. e., input prices from 1988 would pred ict output prices in 1989). udies found the lags associate with price pass through can extend from 5 to 8 quarters ( J. Menon, 1995). a on changes of annual output price indices from 1987 to 1996 and input price indices from 1986 to 1995. The final data set contains ten years of data for each of the 18 industrial sectors of concern. ysis estimated the relationship between change in output price index ( dependent variable) and change in input cost index. nput cost index ( independent variables) combines a wide range of no n labor co st values, including energy, with emp loyment cost value s.

a.

The dependent variable is the output price index. The Producer Price Index ( PPI), an appropriate measure of output price,

me as ur es ch an ge s in the p rice that the p ro du ce r rec eive s at th e p lant ga te an d is th er efor e the releva nt pr ice for the p ro du ce r's production decisions. ducts are often intermediate goods whose market prices are producer prices. A estimated the dep endent variable a s the weighted avera ge of P PIs fo r the go ods produced b y the indu stries in each sector.

EP A calculated the output price ind ex for the sectors as follow s:

( B 3)

where :

Pout, k = average output price index value for a given MP & M sector in year k;

qi, k = value o f shipments for S IC ind ustry i, year k; and PPIi, k = Pro ducer Price Ind ex for the outp ut of SIC industry i, year k.

EPA used the following information to fill in data gaps for all output prices when the PPI series had missing data:

  Inform ation at the 3 digit SIC cod e level if data were unavailable at the 4 digit SIC cod e level;

  Th e per centage cha nge in p rice at the 3 digit lev el, app lied to the 4 digit level to calculate missing values, if da ta at the 4 digit level were available for several years; and T F The est As disc The D EPA lagged output prices by a year because the market t For example, exchange rate pass through st EPA used dat The anal The i Dependent variable MP& M proEP B 4 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis   A best fit line to extrapolate data for years with missing data when at least five years worth of data were available.

b.

The independ ent variable is the input cost index. The input cost index averages the producer price index values for commo dity inputs to the sector in question, weighted by the share of each input to sector output. The weighted average calculation involves two steps: ( 1) estimating input cost indice s at the 4 digit SIC level and ( 2) deve loping the input co st index at the MP& M sector level. eps are discussed in detail below.

  Estimating Input Cost Indices at the 4 digit SIC level EPA first identified the composition of production inputs required to produce output from a given industry by obtaining direct requirement coefficients from the 1992 Benchm ark Input Output Tables of the United States. 5 The direct requirement coefficients are defined as fo llows: for each dollar of ou tput from industry i, the dire ct requirem ents co efficient rj indicates the value of inp ut j required to achiev e one dollar of ou tput from industry i. The sum of all requiremen ts coefficients rj for industry i equals one. Note that the direct requirements coefficients from the input output table include information on the purchase of capital goods. Changes in the cost of capital goods are therefore reflected in the PPI series for the associated industrie s. cause only on e set of d irect req uirements co efficients we re ava ilable for and are use d in the a nalysis, this analysis assumes that the input mix rem ains constant ove r the ten year period considere d in the analysis.

EPA then used yearly PPI values and the Employm ent Cost Index ( EC I) from the Bureau of Lab or Sta tistics to estim ate changes in the labor and non labor com ponents of production cost over time.

to estimate changes in labor cost for all sectors except for aircraft manufacturing, for which a sector specific ECI is available.

EPA calculated the input cost index for a 4 digit SIC group as a weighted average of prices for ( a) all non labor inputs for which the PPI series data were available and ( b) labor input. The percentage of inputs accounted for in our regression model range s from 39 p ercen t to 10 0 pe rcent, w ith an average of 66 perc ent.

To summ arize, E PA calcula ted the input co st index as follow s. ach 4  digit SIC industry, i, that uses non lab or inp uts, j,

the average input price for the year k is:

( B 4)

where :

Pi, k = avera ge inp ut price index for SIC industry i, year k;

rj = direc t requireme nts coe fficient for inp ut com mod ity j by indu stry i; and PPIj, k = Pro ducer Price Ind ex, co mmodity j, year k.

rl = direct requirements coe fficient for wages and salaries by industry i; and ECIk = Employement Co st Index in year k.

  Developing the input cost index at the MP& M sector level EPA developed the input cost index at the MP& M sector level by weighting the individual 4 digit SIC group cost index values by 4 digit SIC value of shipments from the Census of Manufactures and various Annual Surveys of Manufactures for the co rresp ond ing years. is analysis assume s that weig hts by p rod uction value a re co nstants o ver time .

The resulting values provided an aggregate measure of input costs over the ten year period 1986 1995 for each MP& M sector. & M industry sector, containing N 4 digit SIC industries, the average input price in each year k is: Independent variables These st Be The Agency used ECI for private manufacturers For e Th For each MP 5 The Bureau of Economic Analysis' Input Output Table uses its own industry classification system, which is similar to the Standard Industrial Classification ( SIC) used in the Economic Censuses. This discussion refers to that classification system as the BEA classification. Although the BEA classification has more categories than the SIC system, EPA grouped and mapped the BEA classification codes to the more aggregate SIC codes that form the MP& M sectors. EPA calculated an average price when one BEA input classification code corresponded to more than one SIC code.

B 5 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis ( B 5)

where:

Pin, k = average input price index value for a given MP& M sector in year k;

Pi, k = input price index value for SIC industry i, year k ; and qi, k = value of shipments for SIC industry i, year k.

B. 2.3 Regression Results Table B. 1 below gives the estimated parameter values ( corrected for autocorrelation) and t statistics for each of the sectors.

Most of the estimated parameters have the expected sign and are statistically significant at 95th percentile. The estimated parameters show that 16 of the 18 MP& M sectors have been able to increase prices, at the margin, between 42 percent and 121 percent for every one percent increase in non labor input costs. The estimated input cost coefficients are negative for two industrial sectors: Printed Circuit Boards and Office Machines. This finding suggest that additional market factors such strong domestic and global competition drive output prices down.

Figure B. 1 below depicts output price and input cost trends from 1987 to 1996 for these two industries. It shows that in both sectors, output prices decreased faster than input costs. This difference indicates that significant competition in these sectors drives output prices down, undoubtedly through rapid technology innovation. An inverse relationship between labor cost and output prices also indicates presence of strong competition in these two sectors. Based on these findings, it is reasonable to assume that the printed circuit board and office machine sectors have zero CPT ability.

B 6 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis Table B. 1: CPT Regression Results By Sector MP& M Sector Regression Coefficients ( t statistics in parenthesis)

Phase 1 Proposed Rule ( 1982 to 1991) Phase 2 Model ( 1987 to 1996)

Non Labor Input Costs Labor Input Costs Intercept Total Input Costs ( Labor+ Non Labor)

Aerospace .774 ( 12.73) .001 ( 4.21) N/ A N/ A Aircraft .924 ( 37.22) .003 ( 3.32)  0.9280 ( 1.45) 1.20 ( 8.90)

Bus & Truck .930 ( 30.91) .003 ( 2.46) 0.629 ( 1.00) 0.864 ( 6.52)

Electronic Equipment .899 ( 25.28) .005 ( 3.46) 2.79 ( 4.06) 0.395 ( 2.72)

Hardware .889 ( 27.02) .005 ( 3.68) 1.06 ( 1.80) 0.772 ( 6.22)

Household Equipment .921 ( 43.03) .003 ( 4.16) 1.69 ( 2.91) 0.636 ( 5.22)

Instruments .923 ( 46.44) .003 ( 4.34) 1.06 ( 1.79) 0.771 ( 6.18)

Iron and Steel N/ A N/ A 1.12 ( 1.57) 0.767 ( 5.14)

Job Shop N/ A N/ A 1.97 ( 3.33) 0.575 ( 4.61)

Mobile Industrial Equipment .901 ( 23.94) .004 ( 2.68) 0.546 ( 0.92) 0.884 ( 7.05)

Motor Vehicle .898 ( 27.85) .004 ( 3.36) 0.833 ( 1.03) 0.820 ( 4.76)

Office Machines .920 ( 35.05) .004 ( 3.52) 47.5 ( 17.2)  9.33 ( 15.6)

Ordnance .907 ( 29.05) .004 ( 3.18) 1.89 ( 3.63) 0.591 ( 5.41)

Other Metal Products N/ A N/ A 1.71 ( 3.04) 0.631 ( 5.34)

Precious Metals & Jewelry .938 ( 24.82) .002 ( 1.68) 1.69 ( 2.47) 0.640 ( 4.42)

Printed Circuit Boards n/ a n/ a 6.23 ( 9.07)  0.337 ( 2.31)

Railroad .911 ( 30.52) .004 ( 3.23) 0.548 ( 0.914) 0.881 ( 6.98)

Ships and Boats .970 ( 34.68) .001 ( 0.93) 0.817 ( 1.53) 0.823 ( 7.32)

Stationary Industrial Equipment .909 ( 28.09) .004 ( 3.06) 0.973 ( 1.78) 0.791 ( 6.88)

N/ A = Not available from the Phase I analysis.

Source: U. S. EPA analysis B 7 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis Table B. 2: Output Prices and Unit Input Cost Trends in the Printed Circuit Board and Office Machine Sectors Source: EPA Analysis.

Table B. 1 also presents Phase 1 results for comparison. Note the following differences in the Phase 1 and Phase 2 analyses:

1. Time period:

  Phase 1 analysis covers 1982 to 1991;

  Phase 2 analysis covers 1987 to 1996.

2. Explanatory variables:

  Phase 1 analysis included non labor and labor cost variables separately. The model has no intercept term. Note that EPA then used only the non labor input cost coefficient to estimate a CPT potential for a given sector;

  Phase 2 analysis combines labor and non labor input costs because compliance costs are associated with both.

The intercept term captures additional market trends ( e. g., increased import penetration) not reflected in the input cost indices.

3. Industrial sectors:

  Phase 1 analysis included 15 industrial sectors. It excluded iron and steel, job shops, other metal products, and printed circuit boards industries;

  Phase 2 analysis includes 18 of the 19 industrial sectors and excludes the aerospace industry. The Phase 1 analysis included aerospace, but EPA used proxies from the aircraft industries to estimate output price indices for the aerospace related 4 digit SICs. EPA now estimates the CPT potential for this sector based on the market structure analysis alone.

EPA assigned MP& M sectors to low, average, and high CPT categories based on the natural breaks in the estimated parameter values. The estimated parameter values exhibit two distinct breaks in their distribution, between Precious Metals and Jewelry ( 65.89 percent) and Hardware ( 78.17 percent) and between Motor Vehicle ( 82.45 percent) and Railroad ( 88.49 percent). EPA added the Aerospace sector to the high CPT category based on results from the market structure analysis.

Table B. 3 summarizes results from this analysis.

B 8 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis Table B. 3:

Low CPT Average CPT High CPT Office Machine Hardware Railroad Printed Circuit Boards Instruments Mobile Industrial Equipment Electronic Equipment Iron & Steel Bus & Truck Job Shop Stationary Industrial Equipment Aircraft Ordnance Ships & Boats Aerospacea Other Metal Products Motor Vehicle Household Equipment Precious Metals & Jewelry Classification of MP& M Sectors by CPT Ability a Aerospace assigned to High category based on results from the market structure analysis ( discussed in the next section).

Source: U. S. EPA analysis B. 3 MARKET STRUCTURE ANALYSIS The second part of the analysis of cost pass through potential is based on an analysis of the current market structure of the MP & M industry sectors. Information on the competitive structure and market characteristics of an industry provide insight into the likely ranges of supply and demand elasticities and the sensitivity of output prices to input costs. For example, when input costs increase, the profit maximizing firm attempts to maintain its profits by increasing output prices accordingly. The amount of the cost increase that the firm can pass on as higher prices depends on the relative market power of the firm and its customers. The market structure analysis described in this section attempts to measure the relative market power enjoyed by firms in each MP & M sector and provides ordinal rankings used to validate the CPT coefficients estimated by the econometric analysis. The analysis represents the current market structure and CPT ability of firms in the MP& M sectors and in no way attempts to forecast the future market structure of these sectors.

B. 3.1 Measures Descriptions The following discussion describes five indicators of market power used to assess cost pass through potential for the 19 MP& M sectors. Only manufacturing firms have been considered; non manufacturing firms have been excluded due to data limitations. As noted above, EPA assigned zero CPT ability to non manufacturing firms. The five indicators of market power analyzed are : the eight firm concentration ratio, import competition, export competition, long term growth, and competition barriers. Each of these factors are discussed in detail below.

a. Concentration The extent of concentration among a group of market participants is an important determinant of that group's market power.

A group of many small firms typically has less market power than a group of a few large firms, because the latter are in a more advantageous position to collude with each other. All else being equal, highly concentrated industries are therefore 6 expected to pass through a higher proportion of the compliance costs that will result from this regulation.

This analysis uses the eight firm concentration ratio, which measures the percentage of the value of shipments concentrated in the top eight firms in each four digit SIC category, as an indicator of market concentration. The analysis estimates sector concentration ratios as the weighted averages of component industry concentration ratios, weighted by SIC value of shipments. 7 An increase in the sector concentration ratio makes firms in an industry better able to pass on larger portions of their input cost increases without adversely affecting quantities sold to a significant extent.

6 A substantial body of empirical research exists that has addressed the relationship between industry concentration and market power. Eg., see Waldman & Jensen, 1997.

7 The eight firm concentration ratio and value of shipments data used are for the year 1992.

B 9 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis This analysis is potentially limited by the necessity to aggregate component industries into sectors. The accuracy of any analysis to characterize market power originating from industry concentration depends to a great extent on defining the relevant market. A well defined market requires including all competitors and excluding all non competitors. Defining the relevant market too narrowly overstates market power, while defining the market too broadly would underestimate it.

Aggregating concentration ratios for the four digit SIC categories into a sector concentration ratio results in a sector average that may overstate market power for some portions of the sector and understate market power for other portions. This analysis would likely estimate concentration ratios for markets that in general are too broadly defined. 8 Even so, the sectoral concentration ratios estimated should provide meaningful information that will assist in determining relative market power for each sector, because firms producing similar or related products are still classified within the same sector and each sector produces a distinctly different family of products ( e. g., motor vehicles, aircrafts, ships and boats).

Another important determinant of the relevant market is its geographical extent. Given the nature of the MP& M industry,

however, this factor is not important because it pertains more to industries dealing with perishable commodities and those with high transportation costs.

b. Import competition Theory suggests that imports as a percent of domestic sales are negatively associated with market power because competition from foreign firms limits domestic firms  ability to exercise such power. Firms belonging to sectors in which imports make up a relatively large proportion of domestic sales will therefore be at a relative disadvantage in their ability to pass through costs compared to firms belonging to sectors with lower levels of import penetration, a measure of import competition.

Import penetration, the ratio of imports in a sector to the total value of domestic consumption in that sector, is particularly significant because foreign producers will not incur costs as a result of this regulation.

In the market structure analysis, higher import penetration generally means that firms are exposed to greater competition from foreign producers and will thus possess less market power to increase prices in response to regulation induced increases in production costs. The Census Bureau provides import data at the four digit SIC level. EPA estimated sector import penetration ratios as the ratio of the sum of component industry imports divided by the sum of component industry value of domestic consumption9.

c. Export competition The MP& M regulation will not increase the production costs of foreign producers with whom domestic firms must compete in export markets. As a result, sectors that rely to a greater extent on export sales will have less latitude in increasing prices to recover cost increases resulting from regulation induced increases in production costs. They will therefore have a lower CPT potential, all else being equal.

This analysis uses export dependence, defined as the percentage of shipments from a sector that is exported, to measure the degree to which a sector is exposed to competitive pressures abroad in export sales. EPA used export data at the four digit SIC level and derived sector export dependence ratios: the sum of component industry exports divided by the sum of component industry value of shipments.

That domestic producers export a substantial share of their product does not necessarily imply that they are subject to greater competitive pressures abroad compared to what they face in domestic markets. Such would be the case in sectors where U. S.

producers are the dominant suppliers worldwide. To account for this possibility, EPA analyzed in more detail those sectors showing high export dependence to see if domestic firms in those sectors appear to dominate the world market. 10 Based on information presented in the profile of MP& M industry profile, EPA determined that firms in all four of these sectors ( i. e.,

precious metals and jewelry, ordnance, office machine, and aircraft) operate in highly competitive international markets. The conventional theory that higher export dependence results in relatively lower market power is therefore assumed to hold true for all MP& M sectors.

8 The four digit SIC category, while not a perfect delineation, is most often used by industrial organization economists in their studies because, among publicly available data sources, these industries appear to correspond most closely to economic markets ( Waldman & Jensen, 1997).

9 Census data on imports, exports, and value of shipments for the year 1996 were used for estimating this and the next market structure indicator.

10 EPA considered sectors with export dependence exceeding 30 percent for this part of the analysis.

B 10 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis A substantial body of literature studies the link between environmental regulation and competitiveness in international trade.

Overall, little empirical evidence seems to support the hypothesis that environmental regulations have had a significant adverse effects on the international competitiveness of domestic firms ( Jaffe et al., 1995). Nonetheless, export dependence as an important independent factor in assessing the validity of the estimated CPT coefficients. If historical changes in input costs have affected both domestic and foreign firms more or less uniformly, then the econometrically estimated Ep would not address situations in which only domestic firms face higher costs. Determining the exact extent to which changes in input costs have affected both domestic and foreign producers uniformly is beyond the scope of this analysis. Such changes,

however, can affect a significant proportion of cost changes related to the non environmental aspect of inputs, such as those for energy, imported raw materials, and imported manufactured inputs.

Given the above, European and other developed countries have also implemented strict environmental regulations comparable to U. S. regulations; even changes in environmental costs have therefore often been relatively uniform across domestic and foreign firms. This uniformity may account for the fact that past studies do not show substantial impacts of U. S.

environmental regulation on the balance of trade.

Because this regulation will affect only domestic firms, and the analysis assumes that no similar regulatory response is expected in foreign countries at least in the short term, domestic firms will face relatively higher production costs compared to their international competitors as a result of regulation. To study the impact of this regulation on the change in MP& M industry competitiveness in international markets, the market structure analysis must therefore include measures that assess the effect of each sector s dependence on export markets on its ability to pass through costs.

d. Long term industry growth An industry s competitiveness and the ability of firms to engage in price competition are likely to differ between declining and growing industries. Most studies have found that recent growth in revenue is positively related to profitability ( Waldman & Jensen, 1997), which suggests a greater ability to recover costs fully.

Based on Census Bureau data, EPA estimated the average growth rate in the value of shipments between 1988 and 1996 for each sector, with the value of shipments for each component industry also serving as the weights for deriving average sector growth rates. EPA expects firms in sectors with higher growth rates to be better positioned to pass through compliance costs rather than being forced to absorb such cost increases in order to retain market share and revenues.

e. Competition barriers Barriers to entry and exit help a concentrated industry exert market power by deterring potential competitors from entering the market. Without these barriers, a firm that tries to pass through compliance costs by raising its prices risks losing its market share to new firms that see an opportunity to compete at higher prices.

  Entry barriers are the fixed costs of beginning business in an industry. Entry barriers include high capital costs, brand name reputations that require a large advertising expense to overcome, a long learning curve, and any other factors that make the costs for new entrants higher than the costs of existing firms.

  Exit barriers are the fixed costs that cannot be salvaged upon leaving the industry. They are sometimes called sunk costs and are measured as the difference between the replacement value of a facility's capital and its liquidation value. Exit barriers include factors that make it difficult for a firm to liquidate its assets, such as specialized machinery that cannot be sold or converted to alternative uses, brand names that cannot transfer well to other products, or substantial shutdown liabilities that would offset the value of assets in liquidation. The capital valuations are typically needed to measure exit barriers.

An analysis measuring entry and exit barriers can avoid problems of data availability by identifying directly the presence of above normal profits that such barriers would permit. This analysis uses a sector s risk normalized return on assets ( ROA) as an indicator of profit rates and the likely presence of entry and exit barriers. A popular measure used by managers for measuring firm performance, the ROA is used an indicator of firm profitability. This analysis estimates an ROA before interest payments and taxes to compare firms with different capital structures. Using the pre tax ROA results in the adding back of the interest tax shield and permits comparing ROAs among firms assumed to be entirely equity financed. The analysis measures firm riskiness by the Asset Beta, which is the firms  Equity Beta ( i. e., measure of the firm s riskiness as an investment relative to the market for equity investments as a whole), adjusted to remove their financing decision from the beta calculation. With this adjustment, the analysis can compare firms with different capital structures because the Asset Beta represents the beta of common stock had the firm been entirely equity financed.

B 11 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis The Capital Asset Pricing Model ( CAPM) states that the expected risk premium on an investment ( return earned over and above the risk free rate) reflect investment s riskiness relative to the market ( beta). The Treynor Ratio, a commonly used performance measure that uses betas as a measure of risk, embodies this principle of the CAPM:

Treynor Ratio = ( Return from Investment  Risk Free Interest Rate) / ( Beta of Investment)

For this analysis, however, the Treynor Ratio, or any other performance measure requiring estimation of the risk premium on an investment, could not be used. More than 60 percent of the firms in the analysis had five year, pre tax ROAs that were lower than the risk free interest rate of 5.21 percent ( return on the three month U. S. Treasury Bill for the five year period 1996 2000). The analysis using the Treynor Ratio yielded results that did not permit a meaningful comparison of risk

normalized ROAs among sectors. This analysis therefore used a modified form of the Treynor Ratio that adjusts the total return and not just the risk premium by the riskiness of an investment. Applying this modification, the analysis estimated the risk normalized ROAs as follows:

Risk Normalized ROA = ROA / Asset Beta The analysis estimated risk normalized ROAs for sectors using firm level data as opposed to data at the 4 digit SIC level, and identified firms belonging to each MP& M sector using a two step process:

  First, EPA assigned facilities ( and their parent firms) responding to the MP& M facilities survey to the sector from which they received the largest portion of their revenues.

  Second, EPA identified additional facilities belonging to each sector using a financial information Web site ( marketguide. com), which provides a classification of publicly traded firms by the 4 digit SIC code of their largest business segment based on revenues.

EPA estimated ROA and Beta values for a five year time period, and estimated sector risk normalized ROAs by weighting 11 each firm s risk normalized ROA by its market capitalization.

The use of the risk normalized ROA measure only assigns MP& M sectors relative rankings and does not imply that they face high or low barriers to competition in absolute terms. The analysis assumes that higher risk adjusted profits in general indicate potential entry and exit barriers and above average market power.

11 EPA further studied the business activities of firms belonging in the MP& M facilities survey that were identified as conglomerates or found to own multiple facilities belonging to more than one MP& M sector, and of firms in the broader sample having a market capitalization exceeding $ 25 billion. This additional step ensured that the market capitalization weight used in the analysis represented only the fraction of revenues that the firm receives from its business activities in the MP& M sector( s) of interest.

B 12 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis B. 3.2 Results EPA used these five indicators to assign each sector a cost pass through score. Higher numerical values indicate greater CPT potential for some indicators ( e. g., industry concentration) and lesser CPT potential for others ( e. g., import competition).

Table B. 4 summarizes the specific ranking definitions for each indicator.

Table B. 4: Summary of Ranking Rules for Assessing Relative Pass Through Potential Based on Market Structure Considerationsa Variable Indicates Greater Pass

Through Potential ( High Rank) Variable Indicates Lesser Pass

Through Potential ( Low Rank)

8 Firm Concentration Ratio Greater than median Lesser than median Ratio of Imports to Shipments Lesser than median Greater than median Ratio of Exports to Shipments Lesser than median Greater than median Average Growth Rate of Shipments Greater than median Lesser than median Risk Normalized Pre Tax Return on Assets Greater than median Lesser than median a All assessments of pass through potential are relative among the 19 MP& M Sectors.

Source: U. S. EPA analysis.

For each of the five indicators, EPA ranked sectors from 1 to 19, with 1 assigned to the sector assessed to have the lowest CPT potential and 19 assigned to the sector assessed to have the highest CPT potential. 12 Based on this scoring system, the possible score for a sector when all five of its ranks are summed ranges from 5 to 95. Table B. 5 presents a summary of the results for the market structure analysis.

12 This ranking scale differs from the scale used to assign scores in the market structure analysis undertaken for the Phase I MP& M analysis. In the Phase I analysis, depending on the variable under consideration, a sector received a value of + 1 if it indicated a greater CPT potential relative to the median and a value of  1 if it indicated a lesser CPT potential relative to the median . The sector at the median received a value of 0. The use of the median value as the threshold for determining relatively higher or lower (+ 1 or  1) market power was somewhat arbitrary, especially for values closely centered around the median. The new scale, since it considers individual sector ranks, is superior because it explicitly recognizes that extreme values are more likely to be indicative of high or low market power, and accordingly assigns them a higher or lower score. For example, the old scale would assign a sector with industry concentration just above the median ( e. g., other metal products) the same score of + 1 as a very highly concentrated industry, such as aerospace. The new scale, however, recognizes the difference in industry concentration between the two sectors and therefore assigns the first sector a rank close to 10 and aerospace a rank close to 19.

B 13 MP& M EEBA: Appendices Appendix B: Cost Pass Through Analysis Table B. 5: Results of the Market Structure Analysisa Overall Rank Sector 8 firm Concentration Ratio Import Penetration (%) Export Dependence (%) Avg. Annual Growth Rate (%) Risk

Normalized ROA (%) Aggregate Score Value Rank Value Rank Value Rank Value Rank Value Rank 1 Precious Metals and Jewelry 35.0 4 77.36 1 49.85 2  1.9 3 14.43 10 20 2 Printed Circuit Boards 35.0 3 21.99 8 17.07 10 1.5 8 7.50 2 31 3 Ordnance 76.90 16 18.92 10 50.17 1  7.3 2 12.30 6 35 4 Household Equipment 54.22 10 33.18 3 17.02 11 1.5 9 12.02 5 38 4 Office Machine 61.38 14 51.85 2 43.41 4 3.1 15 9.58 3 38 6 Electronic Equipment 47.27 9 24.55 6 24.04 6 5.1 18 7.21 1 40 7 Aircraft 85.3 18 22.74 7 46.43 3  1.7 4 16.15 13 45 8 Iron and Steel 41.87 6 4.54 16 1.32 17 0.4 6 11.38 4 49 9 Other Metal Products 54.27 11 32.40 4 17.57 9 1.1 7 26.60 19 50 10 Stationary Industrial Equipment 41.16 5 17.71 11 23.64 7 3.7 16 16.78 14 53 11 Hardware 24.52 2 14.31 14 11.37 13 2.1 11 17.18 15 55 12 Instruments 44.2 8 15.33 12 23.07 8 1.8 10 19.64 18 56 13 Mobile Industrial Equipment 58.56 13 21.42 9 29.62 5 2.8 13 18.13 17 57 14 Ships and Boats 58.20 12 6.49 15 6.48 15  1.5 5 16.11 12 59 15 Job Shop 19.26 1 0.00 19 0.00 19 3.1 14 13.44 9 62 15 Motor Vehicle 77.30 17 27.56 5 15.74 12 2.6 12 18.10 16 62 17 Aerospace 92.29 19 0.75 18 0.75 18  7.6 1 13.19 8 64 17 Bus & Truck 42.51 7 2.86 17 3.04 16 4.8 17 12.31 7 64 19 Railroad 71.00 15 15.16 13 10.26 14 7.6 19 14.62 11 72 a Shaded values are the medians for each market structure indicator.

Source: U. S. EPA analysis This rank scoring system has some important limitations:

1. This grading scale implicitly assigns equal weights to each of the five market structure indicators. Clearly, the impact of each of these five indicators on market power will vary from sector to sector, and some indicators are likely to dominate others within each sector.

2. Although the ranking scale distinguishes between sectors with extreme values and those that are close to the median,

it does not permit an accurate judgement about how significant a particular value may be in determining market power. For each indicator, sectors are simply ranked from 1 to 19 based on the lowest to highest market power potential. The change in market power expected as one moves from sector 1 to sector 5 is not likely to be equal,