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An alternative approach to estimating regional input–output tables: the KFLQ method

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  • Hana Kwon

    (Kyungpook National University)

  • Sung-Goan Choi

    (Kyungpook National University
    Andong National University)

Abstract

This study proposes an alternative approach to constructing regional input–output models (RIOMs), which are efficient tools for establishing and evaluating regional economic policies. However, the usefulness of the RIOM does not diminish the complexity and high cost burden associated with the survey-based method, including the inordinate amount of time required to construct the model. Hence, many previous studies have actively studied nonsurvey techniques. However, the problems of overestimating regional input coefficients have been highlighted as a limitation of traditional nonsurvey methods. Therefore, this study proposes a modified Flegg’s location quotient formula (hereafter KFLQ) to address the limitations of previous nonsurvey methods and tests the validity of the KFLQ method through empirical analysis. In this regard, the empirical test focuses on how the distortion of input coefficients in the previous LQ-based formulas can be corrected. Ultimately, the results show that the KFLQ method yields more accurate results than those from previous LQ-based methods.

Suggested Citation

  • Hana Kwon & Sung-Goan Choi, 2024. "An alternative approach to estimating regional input–output tables: the KFLQ method," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 72(2), pages 561-578, February.
    • Handle: RePEc:spr:anresc:v:72:y:2024:i:2:d:10.1007_s00168-023-01211-8
    DOI: 10.1007/s00168-023-01211-8
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    References listed on IDEAS

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    1. Anthony T. Flegg & Timo Tohmo, 2016. "Estimating Regional Input Coefficients and Multipliers: The Use of FLQ is Not a Gamble," Regional Studies, Taylor & Francis Journals, vol. 50(2), pages 310-325, February.
    2. 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.
    3. Bartlomiej Rokicki & Oliver Fritz & Jonathan M. Horridge & Geoffrey J. D. Hewings, 2021. "Survey-based versus algorithm-based multi-regional input–output tables within the CGE framework – the case of Austria," Economic Systems Research, Taylor & Francis Journals, vol. 33(4), pages 470-491, October.
    4. Tobias Kronenberg, 2012. "Regional input-output models and the treatment of imports in the European System of Accounts (ESA)," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 32(2), pages 175-191, September.
    5. 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.
    6. Anthony T. Flegg & Guiseppe R. Lamonica & Francesco M. Chelli & Maria C. Recchioni & Timo Tohmo, 2021. "Correction to: A new approach to modelling the input–output structure of regional economies using non‑survey methods," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-1, December.
    7. Malte Jahn & Anthony T. Flegg & Timo Tohmo, 2020. "Testing and implementing a new approach to estimating interregional output multipliers using input–output data for South Korean regions," Spatial Economic Analysis, Taylor & Francis Journals, vol. 15(2), pages 165-185, April.
    8. Xesús Pereira-López & André Carrascal-Incera & Melchor Fernández-Fernández, 2020. "A bidimensional reformulation of location quotients for generating input–output tables," Spatial Economic Analysis, Taylor & Francis Journals, vol. 15(4), pages 476-493, October.
    9. Anthony T. Flegg & Guiseppe R. Lamonica & Francesco M. Chelli & Maria C. Recchioni & Timo Tohmo, 2021. "A new approach to modelling the input–output structure of regional economies using non-survey methods," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-31, December.
    10. Xiaoyun Zhao & Sung-Goan Choi, 2015. "On the regionalization of input–output tables with an industry-specific location quotient," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 901-926, May.
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    More about this item

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O18 - Economic Development, Innovation, 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

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