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Embodied Inputs and the Classification of Basic and Nonbasic Activity: Implications for Economic Base and Regional Growth Analysis

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  • J C Stabler

    (Department of Agricultural Economics, University of Saskatchewan, Saskatoon, Canada S7N 0W0)

  • L V St. Louis

    (Department of Economics, University of Saskatchewan, Saskatoon, Canada S7N 0W0)

Abstract

Studies of the economic base of regional economies and their growth, which use techniques that rely only on labor force or final demand data, will overstate the amount of nonbasic activity supported by exports, produce upwardly biased multipliers, and misclassify activities into basic and nonbasic categories. Input-output analysis is used to introduce a technique that avoids these errors. The contribution of a basic activity to a regional economy is identified as the value added directly and indirectly throughout the economy as a result of export sales. The proper classification of basic and nonbasic activities and, consequently, the development of accurate multipliers depend upon the identification of embodied as well as direct exports. An application of the technique is provided in an analysis of the economic base of Canada's Prairie region and its growth during the 1970s.

Suggested Citation

  • J C Stabler & L V St. Louis, 1990. "Embodied Inputs and the Classification of Basic and Nonbasic Activity: Implications for Economic Base and Regional Growth Analysis," Environment and Planning A, , vol. 22(12), pages 1667-1675, December.
    • Handle: RePEc:sae:envira:v:22:y:1990:i:12:p:1667-1675
    DOI: 10.1068/a221667
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    References listed on IDEAS

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    1. John A. Kuehn & Michael H. Procter & Curtis H. Braschler, 1985. "Comparisons of Multipliers from Input-Output and Economic Base Models," Land Economics, University of Wisconsin Press, vol. 62(2), pages 129-135.
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    Cited by:

    1. Jun Wan & Jae Hong Kim & Geoffrey J D Hewings, 2013. "Inspecting Regional Economic Structural Changes through Linking Occupations and Industries," Environment and Planning A, , vol. 45(3), pages 614-633, March.
    2. Vollet, Dominique & Roussel, Veronique & Callois, Jean-Marc, 2005. "Impact of Retirees on Rural Development: Some Observations from the South of France," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 35(2), pages 1-15.

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