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Research on the EconomicImpact of Cooperatives
Project Principal Investigators
Steven Deller • Ann Hoyt • Brent HuethReka Sundaram-Stukel
University of Wisconsin Center for CooperativesMarch 2009This project is funded by the U.S. Department of Agriculture with matching support from theNational Cooperative Business Association and its members, and the State of Wisconsin’sDepartment of Agriculture, Trade, and Consumer Protection. In-kind support is provided by theUniversity of Wisconsin Center for Cooperatives and the Department of Agricultural and AppliedEconomics at the University of Wisconsin–Madison.
 
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Table of Contents
Executive Summary ........................................ 1
Project Purpose .............................................................1Project Partners .............................................................1Data Collection ...............................................................1Methodology ..................................................................1Results ...........................................................................2
1. Introduction .............................................. 32. Cooperatives in the U.S. Economy ................... 4
2.1 Defining the Cooperative .....................................42.1.1 Principles ............................................................42.1.2 Self-identification ................................................42.1.3 Incorporation status ............................................52.1.4 Tax-filing status ...................................................52.1.5 Incorporation and tax-filing status combined ......62.1.6 Ownership considerations ...................................72.1.7 Boundary issues ..................................................72.1.8 Coverage for this study .....................................10
3. Methodology ............................................124. Economic Impacts of Cooperatives..................14
4.1 Commercial Sales and Marketing ......................154.1.1 Farm supply and marketing ...............................164.1.2 Biofuels .............................................................194.1.3 Grocery .............................................................194.1.4 Arts and crafts ...................................................224.1.5 Other .................................................................234.2 Social and Public Services ................................244.2.1 Healthcare .........................................................254.2.2 Childcare ...........................................................274.2.3 Housing .............................................................304.2.4 Transportation ...................................................324.2.5 Education ..........................................................354.3 Financial Services ..............................................374.3.1 Credit Unions ....................................................384.3.2 Farm credit system............................................404.3.3 Mutual insurance...............................................424.3.4 Cooperative finance ...........................................444.4 Utilities ..............................................................464.4.1 Rural electric .....................................................464.4.3 Rural telephone .................................................504.4.2 Water ................................................................53
5. Discussion Papers .....................................576. Future Research........................................587. References ..............................................598. Appendices .............................................62
8.1 IMPLAN Methodology .......................................628.1.1 Introduction ......................................................628.1.2 Input-output methodology ................................638.2 Data Collection ..................................................678.2.1 Population discovery .........................................678.2.2 Data collection and survey methodology ...........688.3 Acknowledgements ...........................................708.3.1 Core research and data collection teamfor the University of Wisconsin–Madison..........708.3.2 Industry collaborators and cooperativecommunity ........................................................708.3.3 Collaborative research council andboundaries workshop participants ....................718.3.4 Academic collaborators anddiscussion paper authors ..................................728.3.5 Funding partners ...............................................728.4 List of Acronyms ...............................................72
 
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List of Figures and Tables
Figure 1:
Distribution of U.S. Cooperatives ........................................................................................................15
Table 2-1:
Incorporation by Tax Status (Row Percentages %, N=1,244) 1 .............................................................7
Table 2-2:
U.S. Cooperatives by Type: Summary of Key Economic Indicators .....................................................11
Table 4-1:
Economic Impact of U.S. Cooperatives: Aggregate Impacts by Sector ...............................................15
Table 4-2:
Commercial Sales and Marketing: Summary of Key Economic Indicators ..........................................16
Table 4-2.1:
Economic Impacts for Farm Supply and Marketing .............................................................................18
Table 4-2.2:
Economic Impacts for Biofuels ...........................................................................................................19
Table 4-2.3:
Economic Impacts for Grocery ...........................................................................................................22
Table 4-2.4:
Economic Impacts for Arts and Crafts ................................................................................................23
Table 4.2-5:
Economic Impacts for Other Commercial Sales and Marketing Goods ..............................................24
Table 4-3:
Social and Public Services: Summary of Key Variables .......................................................................25
Table 4-3.1:
Economic Impacts for Healthcare ......................................................................................................27
Table 4-3.2:
Economic Impacts for Childcare ........................................................................................................29
Table 4-3.3:
Economic Impacts for Transportation ................................................................................................35
Table 4-3.4:
Economic Impacts for Education ........................................................................................................37
Table 4-4:
Financial Services: Summary of Key Variables ....................................................................................38
Table 4-4.1:
Economic Impacts for Credit Unions ..................................................................................................40
Table 4-4.2:
Economic Impacts for Farm Credit System .........................................................................................42
Table 4-4.3:
Economic Impacts for Mutual Insurance Companies ..........................................................................44
Table 4-4.4:
Economic Impacts for Cooperative Finance ........................................................................................45
Table 4.5:
Utilities Cooperatives: Summary of Key Variables ...............................................................................46
Table 4-5.1:
Economic Impacts for Rural Electric Utilities ......................................................................................50
Table 4-5.2:
Economic Impacts for Telephone .......................................................................................................53
Table 4-5.3:
Economic Impacts for Water ..............................................................................................................56
Table A.1:
Illustrative Transactions Table .............................................................................................................64
Table A.2:
Understanding Multipliers ...................................................................................................................65
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