The choice of an input-output table embedded in regional econometric input-output models

In this paper, we investigate the role of input-output data sources in regional econometric input-output models. While there has been a great deal of experimentation focused on the accuracy of alternative methods for estimating regional inputoutput coefficients, little attention has been directed to the role of accuracy when the input-output system is nested within a broader accounting framework. The issues of accuracy were considered in two contexts, forecasting and impact analysis focusing on a model developed for the Chicago region. We experimented with three input-output data sources: observed regional data, national input-output, and randomly generated inputoutput coefficients. The effects of different sources of input-output data on regional econometric input-output models revealed that there are significant differences in results obtained in both forecast and impact analyses. The adjustment processes inherent in the econometric input-output system did not mask the differences imbedded in input-output tables derived from different data sources. Since applications of these types of models involve both impact and forecasting exercises, there should be strong motivation for basing the syste on the most accurate set of input-output accounts.     

Applicability and limitations in the use of national input-output tables for regional studies

Some Tentative Conclusions It appears that although national input-output tables cannot be used for purposes of regional studies without considerable adjustments, acceptable results can be achieved by the methods tried on the Washington State table.In order to obtain acceptable results it seems important (1) to exclude the tertiary sectors through aggregation, and (2) to use field surveys in order to obtain input-output coefficients for (a) primary industries and (b) industries in which the regional economy is specialized. Price adjustments and adjustments for domestic imports do not seem to add anything to the quality of results. Neither do successive iterations after the first one.Financial help for this research was provided by a Cornell Faculty Research Grant to the senior author and is acknowledged. The authors are deeply indebted to the late Professor Charles M. Tiebout, of the University of Washington, who provided the Washington State Input-Output Table used for the case study and who also assisted with helpful comments. Mrs. Katherine Drew and Mrs. Tessa Osborne gave programming assistance, and Barry Lawson acted as research assistant during part of the preparation.     

Emerging challenges in regional input-output analysis

The changing interests and focus of research in the field of regional input-output analysis is examined. After reviewing some of the recent trends and suggesting the tenor of the prevailing philosophy in the field, attention is focused on three, interdependent emerging trends. These are characterized as (1) the conceptualization of input-output within the traditions of econometric analysis; (2) the integration of input-output with other regional and interregional models and (3) attempts to link input-output analysis with regional growth and development theory.     

Emerging challenges in regional input-output analysis

The changing interests and focus of research in the field of regional input-output analysis is examined. After reviewing some of the recent trends and suggesting the tenor of the prevailing philosophy in the field, attention is focused on three, interdependent emerging trends. These are characterized as (1) the conceptualization of input-output within the traditions of econometric analysis; (2) the integration of input-output with other regional and interregional models and (3) attempts to link input-output analysis with regional growth and development theory.The support of the National Science Foundation (Grant No. SES 84-05961), International Programs and Studies, University of Illinois and the University of Queensland Development Fund is appreciated.     

Technique and technology in regional input-output

In thirty years, regional input-output has emerged from its origins as a research technique developed by a few pioneering academics and has become a practical tool widely used by a large commercial market. This development of regional input-output techniques is traced and considered in the context of technological change. While regional input-output remained the preserve of academics it was a technique supported by the technology of Regional Science. The diffusion of the technique has not always been accompanied by the diffusion of the technology with the result that regional input-output has increasingly been abused by those who seek to make the most practical use of the technique.     

Improving regional I-O models: Evidence against uniform regional purchase coefficients across rows

Most non-survey input-output methods, either implicitly or explicitly, attempt to identify the regional component of the direct requirements coefficient. The major non-survey methods, LQ, supply-demand pool, Stevens' RPC and RAS, define the regional component to be the same across a row: that is, all industries requiring input i will buy the same proportion of it within the region as other industries purchasing input i. In this paper, primary data is used to estimate the regional component of manufactured input purchases for several different industries in each row. This allows the hypothesis of uniformity for several sectors' regional purchases of an input to be evaluated.Specifically primary data about the location of specific input purchases, i.e., regional purchase coefficients, are introduced into an existing Delaware input-output model which was estimated using the supply-demand pool method. The changes are significant and, therefore, the implications of these changes for the understanding and use of models prepared using non-survey methods are discussed.     

A comparison of annual and benchmark input-output tables in regional economic modeling

As the economy evolves, so do the coefficients of input-output (I-O) tables. Yet input substitutions occur primarily within economic sectors rather than between them. Consequently, at broader levels of economic aggregation, the annual revision of I-O tables may prove unnecessary. This study compares annual I-O accounts to a fixed benchmark I-O table using integrated-small area modeling of the industrial sector. The model uses annual data on manufacturing employment at primarily the 2-digit SIC level for the St. Louis metropolitan area. Annual I-O accounts do not appear to improve the estimation results at this degree of aggregation.An earlier version of this paper was presented on November 8, 1991 at the meetings of the Regional Science Association in New Orleans. I thank Charles L. Leven for his helpful comments.     

On the aggregation problem in input-output models

The purpose of this paper is to shed new light on the consistent aggregation problem in input-output systems by making use of some properties ofM-matrices. For example, we show that the stability of a multisectoral dynamic multiplier model is invariant under consistent aggregation, that a consistently aggregated dynamic Leontief model is relatively stable if the original system is stable, and that Gillen and Guccione's Third Proposition can be generalized to cover the case of weighted aggregation.     

A Bayesian forecasting approach to constructing regional input-output based employment multipliers

A Bayesian mixed estimation framework is used to examine the forecast accuracy of alternative closures of an input-output model for the Oklahoma economy. The closures correspond to textbook Type I and Type II multipliers, as well as variations of extended input-output and Type IV multipliers. Relative forecast performance of the alternative IO model closures determines which set of multipliers should be used for impact analysis. The exercise reveals differences in forecast accuracy across alternative IO model closures, suggesting that before closures of a particular IO model are adopted, they should be tested for accuracy in predicting the time series data for the regional economy under scrutiny. Received: 26 November 2000 / Accepted: 27 November 2001 RID="*" ID="*" An earlier version of this article was presented at the 47th North American Meetings of the RSAI, Chicago, IL. I would like to thank Stephan Weiler and three anonymous referees for helpful comments.     

The adjustment of interregional input-output coefficients under heterogeneous price sensitivity

In this paper, an interregional general equilibrium model is presented which combines a linear structure with factor substitution under heterogeneous price sensitivity among industries. The model is an extension of the MRVIO model proposed by Liew and Liew (1984a, b) and is compared with others in the field of interregional computable general equilibrium models. A simple numerical exercise is carried out to assess the impact of alternative hypotheses (about elasticities of substitution) on the model's performance.This paper was developed during a period of research and study spent at the Centre for Regional Science (CERUM) at Umeå University. Financial support from Svenska Institutet (Stockholm) and Ente L. Einaudi (Rome) is gratefully acknowledged.David Batten, Terry Friesz, Geoffrey Hewings, Börje Johansson, Dino Martellato, Komei Sasaki, Lars Westin and an anonymous referee made useful comments on earlier drafts of this work.     

Community input-output models for rural area analysis with an example from central Idaho

In this paper we outline an I-O modeling approach tailored to the needs of rural area analysis. We cover four essential features. First, the rural area I-O model must convey an individual community focus. Second, the household sector must be defined in a manner that specifically captures the great openness of rural community economies. Third, the model should offer a degree of closure that provides an assessment of the community economic base. And finally, the rural community I-O model must be defined to include estimates of intercommunity trade, and intercommunity multiplier effects. Having laid the theoretical foundations, we identify subcounty data sources, and describe a collection of nonsurvey and hybrid approaches for estimating model components. The community I-O approach is illustrated next, with an empirical example from central Idaho. The paper closes with a discussion that considers the implications of community I-O in other contexts, including I-O analysis in less developed countries, and in addressing modeling issues in larger nonrural regions. Received: 7 March 1996 / Accepted in revised form: 26 February 1997     

The effect of aggregation on the output multipliers in input-output models

This paper compares the output multipliers of the 1967 National input output model (367 industries) with the multipliers of the aggregated version (81 industries). The results show that, generally, the set of industries in the full model that were aggregated together for the reduced model, display a wide range of output multiplier values. Therefore, the output multiplier of an aggregated industry may not be truly representative of any of the industries that were joined together. Finally we show how information for a particular firm or disaggregated industry can be incorporated in an aggregated input-output model to obtain a close estimate of the actual output multiplier for that firm or industry.