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Using Ready-Made Regional Input-Output Models to Estimate Backward-Linkage Effects of Exogenous Output Shocks

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  • Steinback, Scott R.

    (National Marine Fisheries Service, Northeast Fisheries Science Center)

Abstract

The Leontief input-output model provides the basis for quantifying backward linked multiplier effects of exogenous final demand shocks. In certain situations, however, policies or uncontrollable factors induce exogenous changes in gross industry output. Application of the usual Leontief multipliers in these cases will lead to biased calculations of backward linked economy-wide effects. To eliminate this bias, an output-based adjustment method is proposed that relates demand-driven Leontief multipliers to exogenous output shocks. It is demonstrated that this approach yields exactly the same results as the mixed exogenous/endogenous variables technique, a commonly employed adaptation procedure that accepts outputs as entries. The equivalence between these two approaches is important, because the output-based approach offers substantial computational savings through ease of implementation within ready-made regional input-output systems and provides practitioners with the ability to generate disaggregated estimates of indirect multiplier effects.

Suggested Citation

  • Steinback, Scott R., 2004. "Using Ready-Made Regional Input-Output Models to Estimate Backward-Linkage Effects of Exogenous Output Shocks," The Review of Regional Studies, Southern Regional Science Association, vol. 34(1), pages 57-71.
  • Handle: RePEc:rre:publsh:v:34:y:2004:i:1:p:57-71
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    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/view/78/29
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    References listed on IDEAS

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    Cited by:

    1. Liis LILL, "undated". "Assessing Economic Complexity in some OECD countries with Input-Output Based Measures," EcoMod2008 23800082, EcoMod.
    2. Elias Giannakis, 2014. "The Role Of Rural Tourism On The Development Of Rural Areas: The Case Of Cyprus," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 8(1), pages 38-53, JUNE.
    3. Yong Jin Kim & Chan Young Kim & Yong Jae Shin, 0. "The effects of ubiquitous healthcare service on the south Korean Economy: using input–output analysis," Information Systems Frontiers, Springer, vol. 0, pages 1-12.
    4. Grant J. Allan, 2015. "The Regional Economic Impacts of Biofuels: A Review of Multisectoral Modelling Techniques and Evaluation of Applications," Regional Studies, Taylor & Francis Journals, vol. 49(4), pages 615-643, April.
    5. Liu, Lirong & Piper, Brian, 2016. "Predicting the total economic impacts of invasive species: The case of B. rubostriata(red streaked leafhopper)," Ecological Economics, Elsevier, vol. 128(C), pages 139-146.
    6. Aaron Praktiknjo, 2016. "The Value of Lost Load for Sectoral Load Shedding Measures: The German Case with 51 Sectors," Energies, MDPI, Open Access Journal, vol. 9(2), pages 1-17, February.
    7. Vega, Amaya & Miller, Ana Corina & O'Donoghue, Cathal, 2014. "The Seafood Sector in Ireland: Economic Impacts of Seafood Production Growth Targets," Working Papers 163051, Socio-Economic Marine Research Unit, National University of Ireland, Galway.
    8. Chang Seung & Edward Waters, 2013. "Calculating impacts of exogenous output changes: application of a social accounting matrix (SAM) model to Alaska fisheries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 553-573, October.
    9. repec:gam:jeners:v:9:y:2016:i:2:p:116:d:64126 is not listed on IDEAS
    10. Chang K. Seung, 2014. "Estimating effects of exogenous output changes: an application of multi-regional social accounting matrix (MRSAM) method to natural resource management," Regional Science Policy & Practice, Wiley Blackwell, vol. 6(2), pages 177-193, June.
    11. repec:eee:ecolec:v:138:y:2017:i:c:p:22-30 is not listed on IDEAS
    12. Amaya Vega & Ana Corina Miller & Cathal O'Donoghue, 2014. "The Seafood Sector in Ireland. An Assessment of the Employment Effects of Seafood Production Growth Targets," The Institute for International Integration Studies Discussion Paper Series iiisdp447, IIIS.
    13. Hristov, Jordan, 2015. "An exploratory analysis of the impact of climate change on Macedonian agriculture," 2015 Conference, August 9-14, 2015, Milan, Italy 211747, International Association of Agricultural Economists.
    14. Vega, Amaya & Corina Miller, Ana & O’Donoghue, Cathal, 2014. "Economic impacts of seafood production growth targets in Ireland," Marine Policy, Elsevier, vol. 47(C), pages 39-45.

    More about this item

    Keywords

    Input Output; Multiplier; Regional;

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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