Regional Input-Output Tables and the FLQ Formula: A Case Study of Finland
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 delta in this formula. We also develop a regression model that can be used to select an appropriate value for delta. 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 European Regional Science Association in its series ERSA conference papers with number ersa11p334.
Date of creation: Sep 2011
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-05 (All new papers)
- NEP-GEO-2011-12-05 (Economic Geography)
- NEP-URE-2011-12-05 (Urban & Real Estate Economics)
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.:
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- 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.
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