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New Developments in the Use of Location Quotients to Estimate Regional Input-Output Coefficients and Multipliers


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  • Timo Tohmo
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    Tohmo T. (2004) New developments in the use of location quotients to estimate regional input-output coefficients and multipliers, Reg. Studies 38, 43-54. This study compares the survey-based regional input-output coefficients and production multipliers published by Statistics Finland, 2000, with estimates obtained by applying location quotients (LQs) to national data. The consequences of using alternative adjustment formulae, the 'SLQ, CILQ and FLQ' are illustrated by an input-output model constructed for the Keski-Pohjanmaa (K-P) region. The results indicate that the SLQ and CILQ both produce highly misleading regional input-output coefficients and multipliers. These adjustment formulae are clearly not good enough for the purposes of making local policy and regional planning. The FLQ formula (β=1) yields much better regional input-output coefficients and multipliers than the SLQ and CILQ. The FLQ gives very good estimates for regional multipliers in nearly all industries. The difference between the multipliers generated by the FLQ and the survey-based K-P regional multipliers is on average about -0·3%. The multipliers for the K-P region are typically much lower than for Finland as a whole, indicating that the economic structure of the K-P region is dependent on that of other regions. Hence there is a need to make proper allowance for interregional trade. In the case of the K-P region, the FLQ with β=1 was able to offset the tendency of the CILQ to generate excessively large regional multipliers.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Regional Studies.

    Volume (Year): 38 (2004)
    Issue (Month): 1 ()
    Pages: 43-54

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    Handle: RePEc:taf:regstd:v:38:y:2004:i:1:p:43-54

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    Keywords: Input-output analysis; Location quotients; FLQ; Regional multipliers; Analyse des echanges intersectoriels; Quotients de localisation; FLQ; Multiplicateurs regionaux; Aufwands-Ertragsanalyse; Standortquotienten; FLQ; Regionale Multiplikatoren; Analisis input^output; Cocientes de localizacion (LQs); FLQ; Multiplicadores regionales;


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    Cited by:
    1. Kristinn, Hermannsson, 2013. "Beyond Intermediates: The Role of Consumption and Commuting in the Construction of Local Input-Output Tables," SIRE Discussion Papers 2013-37, Scottish Institute for Research in Economics (SIRE).
    2. Kronenberg, Tobias, 2011. "Regional input-output models and the treatment of imports in the European System of Accounts," MPRA Paper 30797, University Library of Munich, Germany.
    3. Anthony T. Flegg & Timo Tohmo, 2011. "A comment on Tobias Kronenberg's "Construction of regional input-output tables using nonsurvey methods: the role of cross-hauling"," Working Papers 20111111, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    4. repec:ags:stagec:165987 is not listed on IDEAS
    5. Tobias Kronenberg, 2012. "Regional input-output models and the treatment of imports in the European System of Accounts (ESA)," Jahrbuch für Regionalwissenschaft, Springer, vol. 32(2), pages 175-191, September.
    6. Zawalinska, Katarzyna, 2009. "Evaluation of rural development programs after Poland’s accession to the EU: regional CGE approach," 2009 Conference, August 16-22, 2009, Beijing, China 51342, International Association of Agricultural Economists.
    7. Anthony T. Flegg & Timo Tohmo, 2013. "Estimating regional input coefficients and multipliers: The Use of the FLQ is not a Gamble," Working Papers 20131302, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    8. Kowalewski, Julia, 2012. "Inter-industrial relations and sectoral employment development in German regions," HWWI Research Papers 127, Hamburg Institute of International Economics (HWWI).
    9. Julia Kowalewski, 2013. "Inter-industrial Relations and Sectoral Employment Development in German Regions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 233(4), pages 486-504, July.
    10. Anthony T Flegg & Yongming Huang & Timo Tohmo, 2013. "Cross-hauling and regional input-output tables: the case of the province of Hubei, China," Working Papers 20131310, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    11. Bonfiglio, Andrea, 2006. "The Impact of Romania's Accession to the EU. An Analysis of the Effects of Regional Development Policy Through a Multi-regional I-O Model," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 7(2), August.
    12. Gunnar Lindberg, 2011. "On the appropriate use of (input-output) coefficients to generate non-survey regional input-output tables: Implications for the determination of output multipliers," ERSA conference papers ersa10p800, European Regional Science Association.
    13. Kronenberg, Tobias & Többen, Johannes, 2011. "Regional input-output modelling in Germany: The case of North Rhine-Westphalia," MPRA Paper 35494, University Library of Munich, Germany.


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