Quantitative Analysis of the Regional Income Determinant Factors in a Remote Island Economy: Generation and Application of a Regional Input-Output Table

This study modeled income determination of a regional economy consisting of n types of industries, and decomposed regional income of the remote islands into the incomes induced by the central government spending and transfer payments, net income from outside of the region, export, consumption and investment independent from income. The result shows that 42-45% of the regional income depends on the fiscal expenditure of the central government. This study also proposed a non-survey method to generate a competitive import type regional input-output table from the prefectural one. This method assumes that (1) all regions in the prefecture assign an identical ratio of the ith product output to the export for outside the prefecture, and depend on outside the prefecture for an identical ratio of the ith product demand, and (2) the ratio of the intra-industry trade among the trade volume between regions in the prefecture is identical to that of between the prefecture and outside the prefecture.