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Estimating regional input coefficients and multipliers: The Use of the FLQ is not a Gamble

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  • Anthony T. Flegg

    ()
    (University of the West of England, Bristol)

  • Timo Tohmo

    (University of Jyväskylä, Finland)

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    Abstract

    This paper re-examines the Finnish evidence presented by Lehtonen and Tykkyläinen on the use of location quotients (LQs) in estimating regional input coefficients and multipliers. They argue that the choice of an LQ-based method is a gamble and that there is no single method that can be recommended for general use. It is contended here that this evidence is erroneous and that the FLQ yields results far superior to those from competing formulae, so it should provide a satisfactory way of generating an initial set of input coefficients. The choice of a value for the parameter & is also examined.

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    File URL: http://www2.uwe.ac.uk/faculties/BBS/BUS/Research/Economics13/1302.pdf
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    Bibliographic Info

    Paper 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 20131302.

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    Date of creation: 02 Jan 2013
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    Handle: RePEc:uwe:wpaper:20131302

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    Keywords: Regional input-output tables; Finland; FLQ formula; Location quotients; Multipliers;

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    References

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    1. Anthony T. Flegg & Timo Tohmo, 2013. "A Comment on Tobias Kronenberg’s “Construction of Regional Input-Output Tables Using Nonsurvey Methods: The Role of Cross-Haulingâ€," International Regional Science Review, , vol. 36(2), pages 235-257, April.
    2. Anthony T. Flegg & Timo Tohmo, 2013. "Regional Input--Output Tables and the FLQ Formula: A Case Study of Finland," Regional Studies, Taylor & Francis Journals, vol. 47(5), pages 703-721, May.
    3. Andrea Bonfiglio, 2009. "On The Parameterization Of Techniques For Representing Regional Economic Structures," Economic Systems Research, Taylor & Francis Journals, vol. 21(2), pages 115-127.
    4. Kowalewski, Julia, 2012. "Regionalization of national input-output tables: Empirical evidence on the use of the FLQ formula," HWWI Research Papers 126, Hamburg Institute of International Economics (HWWI).
    5. A. T. Flegg & C. D. Webber, 1997. "On the Appropriate Use of Location Quotients in Generating Regional Input-Output Tables: Reply," Regional Studies, Taylor & Francis Journals, vol. 31(8), pages 795-805.
    6. 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.
    7. Andrea Bonfiglio & Francesco Chelli, 2008. "Assessing the Behaviour of Non-Survey Methods for Constructing Regional Input-Output Tables through a Monte Carlo Simulation," Economic Systems Research, Taylor & Francis Journals, vol. 20(3), pages 243-258.
    8. Kauppila, Jari, 1999. "Estimating Interregional Trade Flows in Finland 1996," ERSA conference papers ersa99pa066, European Regional Science Association.
    9. Timo Tohmo, 2004. "New Developments in the Use of Location Quotients to Estimate Regional Input-Output Coefficients and Multipliers," Regional Studies, Taylor & Francis Journals, vol. 38(1), pages 43-54.
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