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Labor-Productivity Changes in Regional Econometric +Input−Output Models

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  • S J Rey

    (Department of Geography, San Diego State University, 5500 Campanile Drive, San Diego, CA 92182-4493, USA)

  • R W Jackson

    (Department of Geography, The Ohio State University, 1036 Derby Hall, 154 North Oval Mall, Columbus, OH 43210-1361, USA)

Abstract

In 1988 Moghadam and Ballard first introduced the interindustry demand variable (IDV) as an innovative approach to integrate regional econometric and input—output models. Since then, several extensions of the IDV have been suggested in the literature, including adjustments for labor-productivity differentials across sectors to generate an interindustry employment demand variable (IEDV). In this paper we revisit the IEDV variable, and offer extensions that transform it from a static to a dynamic form. We implement the range of these specifications for the San Diego labor market, and evaluate their estimation properties and forecasting performance in the context of simulation and projection analyses. The results suggest that problems of multicollinearity plague the conventional specification, and have obscured the assessment of the value of adjustments for industry productivities and the nature of productivity specification. Based on an alternative specification, we find that dynamic labor-productivity adjustments lead to lower simulation errors. These adjustments also result in significantly lower impact multipliers relative to those from the IDV model.

Suggested Citation

  • S J Rey & R W Jackson, 1999. "Labor-Productivity Changes in Regional Econometric +Input−Output Models," Environment and Planning A, , vol. 31(9), pages 1583-1599, September.
    • Handle: RePEc:sae:envira:v:31:y:1999:i:9:p:1583-1599
    DOI: 10.1068/a311583
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    References listed on IDEAS

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    1. Philip R. Israilevich & Ramamohan Mahidhara, 1991. "Hog butchers no longer: 20 years of employment change in metropolitan Chicago," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 15(Mar), pages 2-13.
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    Cited by:

    1. Christa Court & Randall W. Jackson, 2010. "Time Dynamics and the Introduction of New Technologies within IO Analysis," Working Papers Working Paper 2010-03, Regional Research Institute, West Virginia University.
    2. repec:rre:publsh:v:35:y:2005:i:2:p:139-60 is not listed on IDEAS

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