Abstract
This chapter introduces the single region, the interregional and the multi-regional input–output (IO) table and discusses the differences between the three IO models based on these three sets of data. It is concluded that it is crucial to understand that the centrally important intermediate input coefficients, in fact, represent the product of a technical coefficient and, respectively, an intra-regional self-sufficiency coefficient in case of the single-region IO model and an interregional import coefficient in case of both multi-regional models. It is, furthermore, concluded that it is mostly better to work with normalized income, employment, emissions, energy use and other impact multipliers than with the ordinary multipliers of exogenous final demand. Finally, the chapter discusses the nature of interregional spillover and feedback effects and how both are underestimated by the single-region model.
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Notes
- 1.
If you have a problem with the interpretation of the matrix algebra of the above equations, please consult Miller and Blair (2009, Appendix A). If you want to calculate multipliers or any kind of impacts with several kinds of IO models, you may use the InterRegional Input–Output Software package IRIOS, which is downloadable at: https://www.rug.nl/research/reg/research/irios/irios-download?lang=en (Stelder et al. 2000).
- 2.
In the IO literature, these trade origin ratios are often referred to as column trade coefficients. Export coefficients or trade destination ratios or row trade coefficients are used in the row coefficient IO model, which is shown to perform worse than the standard model (Polenske 1970) and has not been used since. See Oosterhaven (1984) for other members of the family of square interregional IO tables and models.
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Oosterhaven, J. (2019). Basic, Demand-Driven IO Quantity Models. In: Rethinking Input-Output Analysis. SpringerBriefs in Regional Science. Springer, Cham. https://doi.org/10.1007/978-3-030-33447-5_2
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