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The Development and Empirical Testing of Extended Input-Output Price Models

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  • Fatemeh Bazzazan
  • Peter Batey

Abstract

The focus in this paper is on the input-output price model as initially developed by Leontief nearly 60 years ago. A number of methodological refinements are proposed, including the formulation, for the first time, of an extended price model, with a disaggregated household sector. This model is presented in both static and dynamic versions. The effects of these refinements are investigated empirically by reference to an example of policy analysis. This relates to a hypothetical proposal to remove energy subsidies at the national level in Iran. The paper reports on the different results produced by each form of price model and also provides evidence on the sensitivity of individual parameter values. The paper concludes by considering the feasibility of constructing more comprehensive versions of the price model and identifying those elements of the model for which data are likely to be more difficult to obtain at national and regional levels.

Suggested Citation

  • Fatemeh Bazzazan & Peter Batey, 2003. "The Development and Empirical Testing of Extended Input-Output Price Models," Economic Systems Research, Taylor & Francis Journals, vol. 15(1), pages 69-86, March.
    • Handle: RePEc:taf:ecsysr:v:15:y:2003:i:1:p:69-86
    DOI: 10.1080/0953531032000056945
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    Cited by:

    1. Többen, Johannes, 2017. "Regional Net Impacts and Social Distribution Effects of Promoting Renewable Energies in Germany," Ecological Economics, Elsevier, vol. 135(C), pages 195-208.
    2. Sharify, Nooraddin & Sancho, Ferran, 2011. "A new approach for the input-output price model," Economic Modelling, Elsevier, vol. 28(1-2), pages 188-195, January.
    3. Zohreh Salimian & Marjan Kordbacheh & Mehdi Sadeghi Shahdani & Vahab Mokarizadeh, 2012. "Analyzing the Effects of the Iranian Energy Subsidy Reform Plan on Short-Run Marginal Generation Cost of Electricity Using Extended Input-Output Price Model," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 250-262.
    4. Yongwei, Cheng & Dong, Mu & Huanyu, Ren & Tijun, Fan & Jianbang, Du, 2020. "Using a temporal input-output approach to analyze the ripple effect of China’s energy consumption," Energy, Elsevier, vol. 211(C).
    5. Llop, Maria, 2020. "Energy import costs in a flexible input-output price model," Resource and Energy Economics, Elsevier, vol. 59(C).

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