Merging the Hypothetical Extraction Method and the Classical Multiplier Approach: A Hybrid Possibility for Identifying Key Distributive Sectors
AbstractThe two main alternative methods used to identify key sectors within the input- output approach, the Classical Multiplier method (CMM) and the Hypothetical Extraction method (HEM), are formally and empirically compared in this paper. Our findings indicate that the main distinction between the two approaches stems from the role of the internal effects. These internal effects are quantified under the CMM while under the HEM only external impacts are considered. In our comparison, we find, however that CMM backward measures are more influenced by within-block effects than the proposed forward indices under this approach. The conclusions of this comparison allow us to develop a hybrid proposal that combines these two existing approaches. This hybrid model has the advantage of making it possible to distinguish and disaggregate external effects from those that a purely internal. This proposal has also an additional interest in terms of policy implications. Indeed, the hybrid approach may provide useful information for the design of ''second best'' stimulus policies that aim at a more balanced perspective between overall economy-wide impacts and their sectoral distribution.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 886.11.
Date of creation: 14 Oct 2011
Date of revision:
Sectoral linkages; Key sectors; Extraction methods; Multiplier methods.;
Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-14 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jan Oosterhaven & Gerard Eding & Dirk Stelder, 2001. "Clusters, Linkages and Interregional Spillovers: Methodology and Policy Implications for the Two Dutch Mainports and the Rural North," Regional Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(9), pages 809-822.
- E Dietzenbacher, 1989. "On the relationship between the supply-driven and the demand-driven input - output model," Environment and Planning A, Pion Ltd, London, vol. 21(11), pages 1533-1539, November.
- M. Alejandro Cardenete & Ferran Sancho, 2006. "Missing links in key sector analysis," Economic Systems Research, Taylor & Francis Journals, vol. 18(3), pages 319-325.
- Kelton, Christina M.L. & Pasquale, Margaret K. & Rebelein, Robert P., . "Using NAICS to Identify National Industry Cluster Templates for Applied Regional Analysis," Vassar College Department of Economics Working Paper Series 88, Vassar College Department of Economics.
- Mirko Titze & Matthias Brachert & Alexander Kubis, 2008. "The Identification of Regional Industrial Clusters Using Qualitative Input-Output Analysis," IWH Discussion Papers, Halle Institute for Economic Research 13, Halle Institute for Economic Research.
- Guerra, Ana-Isabel & Sancho, Ferran, 2010. "Measuring energy linkages with the hypothetical extraction method: An application to Spain," Energy Economics, Elsevier, Elsevier, vol. 32(4), pages 831-837, July.
- Louis de Mesnard, 2009. "Is The Ghosh Model Interesting?," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 49(2), pages 361-372.
- Julio Sanchez-Choliz & Rosa Duarte, 2003. "Production Chains and Linkage Indicators," Economic Systems Research, Taylor & Francis Journals, vol. 15(4), pages 481-494.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Xavier Vila).
If references are entirely missing, you can add them using this form.