Update index.qmd

index.qmd

@@ -60,7 +60,7 @@ csl: apa-6th-edition.csl
 
 ## Introduction
 
-In 2018, the Costa Rican Government published that country's National Bioeconomy Strategy, following closely an internationally agreed definition crafted in the context of the German Bioeconomy Council [@german_bioeconomy_council_global_2018], which states that the Bioeconomy is:
+In 2018, the Costa Rican Government published that country's National Bioeconomy Strategy, following an internationally agreed definition crafted in the context of the German Bioeconomy Council [@german_bioeconomy_council_global_2018], which states that the Bioeconomy is:
 
 > "The production, use, conservation, and regeneration of biological resources, including the knowledge, science, technology, and innovation related to these resources, to provide information, products, processes, and services to all economic sectors, with the goal of advancing toward a sustainable economy [@gobiernodecostarica2020]."
 
@@ -76,13 +76,19 @@ This strict adherence to the principles of SNA and the standarization procedure
 
 ### Supply and Use Tables are used as data sources
 
-The main source of information for Bioeconomy Satellite Accounts are Supply and Use tables from SNA [@europeancommission2009a], which are multi-dimensional matrices that show in great detail the production and import of goods and services by economic activities in a country and how those are used, either in the production process itself as inputs, by other agents in the economy, or by the rest of the world. The detail of products is arranged according to the Central Product Classification–CPC–[@unitednations2015] and economic activities are arranged according to the International Standard Industrial Classification of All Economic Activities–ISIC–[@unitednations2008] or local adaptations of both of them. In addition to products and economic activities, these tables have an additional dimension that shows different types of transactions that those products drive in their journey from producers to consumers.
+The main source of information for Bioeconomy Satellite Accounts are Supply and Use tables from SNA [@europeancommission2009a], which are multi-dimensional matrices that show in great detail the production and import of goods and services by economic activities in a country and how those are used, either in the production process itself as inputs, by other agents in the economy, or by the rest of the world. The detail of products is arranged according to national adaptations of the Central Product Classification–CPC–[@unitednations2015] and economic activities are arranged according to the International Standard Industrial Classification of All Economic Activities–ISIC–[@unitednations2008]. In addition to products and economic activities, these tables have an additional dimension that shows different types of transactions that those products drive in their journey from producers to consumers.
 
 In the case of the supply table, the sequence of those transactions describes a flow where different products in the rows are produced by economic activities in the columns at basic prices (i.e., the price at the farm gate, factory, or commercial establishment). This output is then combined with imports free of insurance and freight costs to form the supply at basic prices. However, this is not the price paid by economic agents. In its way to market, taxes on products are added to the basic price supply, minus any subsidies received, followed by distribution margins (transportation and trade costs). This results in the total supply at purchaser's or market prices, found in the last column of the table, which represents what is available for purchase by the same economic agents in the use table. For these additional columns of transactions, the product detail (rows) is mantained, but not the economic activity detail.
 
 The Use Table shows how the supply from the last column of the Supply Table is purchased by economic agents for various purposes at market prices, expressed in the form of different transactions. Similar to the production above, this table shows Intermediate Consumption, which refers to the purchase of inputs by economic activities used to produce the goods and services in the first table (essentially, the production recipe for each economic activity). The portion of the supply that does not become an input in the production process remains available on the market for other domestic and foreign economic agents. The other transactions in the remaining columns illustrate that these goods and services can be exported; consumed by households, nonprofit institutions serving households (NPISH), and the general government; or they can be used as durable goods in gross capital formation; moved in or out of storage to be consumed in a different accounting period (changes in inventories); or get sold as valuable items. It is important to note that, row by row (product detail), the Total Use column equals the last column of the Supply Table, adhering to the economic principle of equality between supply and demand.
 
-In a first step, our methodology contrasts the different products from the CPC classification against the definition of the Bioeconomy shown in the introductory paragraphs [@gobiernodecostarica2020a; @germanbioeconomycouncil2018], in general, and that of biological resources in particular, and we decide whether the product matches any of the elements of the
+## International and national classifications: a two step procedure
+
+Countries use adaptations of the international classifications of economic activities and products to focus on those elements that are important to their economic structure. In most cases, there is a one-to-one correspondence between international classifications and their national adaptations. However, this is not always the case, because there might be key national activities and products unique to the country that do not have an international counterpart. In other cases, there could be a match at one level of disaggregation but not at another, due to the way some categories are combined. This is reflected, for example, in the vertical integration of certain industries where the same economic activity produces a primary sector good while also providing services related to that production in a manner that's indistinguishable in their finantial statements, making it practically impossible to separate them. This, for example, could result in a sector comprising a mix of codes from an agricultural division and a services division. For this reason, it is necessary to follow a two-step procedure:
+
+-   First step: We compare the different products from the CPC classification against the internationally agreed definition of the Bioeconomy shown in the introductory paragraphs [@germanbioeconomycouncil2018], in general, and that of biological resources in particular \[@gobiernodecostarica2020a, and we decide whether the product matches any of its parts. It should be clarified that, at the highest levels of disaggregation, certain services, which may not initially appear to be directly related to the Bioeconomy, have been taken into consideration in this first step, based on the argument that they could not exist without the prior existence of a Bioeconomic product. For example, the category *62123 Retail trade services of meat, poultry, and game in non-specialized stores* refers to a trade service, but its purpose and existence are so closely tied to bioeconomic products that it could not exist without the prior production of *21111 Fresh or chilled beef* or *21121 Fresh or chilled chicken* one step back in the supply chain, as well as *02111 Cattle* and *02151 Chickens* two steps back in the production chain. For this reason, these have been categorized as Characteristic of the Bioeconomy. This is consistent with the Bioeconomy definition, which also includes services. National adaptations in the following step do not have this level of disaggregation and thus a binary approach, even with these caveats, is impossible and we resort to the creation of a partial category.
+
+-   Second step: We analyze each element of the national product classification and evaluate how each corresponding code aligns with the binary identification from the international classification of previous step. This results in three possible outcomes 1) 100% of the products within the national category belong to the Bioeconomy, according to the international classification (Bioeconomy characteristic products); 2) only some of the products within the national category belong to the Bioeconomy, according to the international classification (we call those Bioeconomy extended characteristic products); and 3) none of the activities or products within the category belong to the Bioeconomy, according to the international classification (Bioeconomy non-characteristic products).
 
 ### A deviation from other studies