Evaluating Economic Performance of Food Manufacturing Industries: An Analysis of the U.S. Pacific Northwest States

This study develops a simple methodology of the analysis of the effectiveness of economic performance of foodmanufacturing industries and applies this methodology to analyze the effectiveness of economic performance of foodmanufacturing industries in the U.S. Pacific Northwest States (Idaho, Oregon, and Washington). The methodologyis based on five ratios constructed using U.S. Economic Census data on value added, value of shipments, number ofproduction workers, cost of materials, and capital expenditures.A regression model is estimated to test whether the overall effectiveness of economic performance measured as theshare of value added in value of shipments is a function of the effectiveness of the use of individual groups of resources(i.e. production workers, capital, and materials). The major implication of the results of econometric analysis for businessdecision-making is that affecting the level of the effectiveness of the use of individual groups of resources makesit possible to affect the level of the overall effectiveness of production and marketing activities.