Regional Input-Output Tables and the FLQ Formula: A Case Study of Finland (revised)
AbstractThis paper examines the use of location quotients (LQs) in constructing regional input?output tables. Its focus is on the modified FLQ formula proposed by Flegg and Webber (1997). Using data for 20 Finnish regions, ranging in size from very small to very large, we determine appropriate values for the unknown parameter d in this formula. We also develop a regression model that can be used to help select an appropriate value for d. We find that the FLQ yields results far superior to those from standard LQ-based formulae. Our findings should be very helpful to any regional analyst who is contemplating making use of the FLQ formula to generate an initial set of regional input?output coefficients. These coefficients could be used either as part of the RAS procedure or as the non-survey foundations of a hybrid model. We consider possible improvements to the FLQ formula but find that including a regional specialization term in this formula only marginally enhances its performance. On balance, we would recommend using the original FLQ formula.
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Bibliographic InfoPaper provided by Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol in its series Working Papers with number 1005.
Length: 48 pages
Date of creation: Dec 2010
Date of revision:
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Web page: http://www1.uwe.ac.uk/bl/research/bristoleconomics.aspx
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Regional input-output tables Finland FLQ formula Location quotients Input coefficients Multipliers Hybrid models;
Find related papers by JEL classification:
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-18 (All new papers)
- NEP-GEO-2010-06-18 (Economic Geography)
- NEP-URE-2010-06-18 (Urban & Real Estate Economics)
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