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Using Weighted Least Squares to Deflate Input-Output Tables


  • Giorgio Rampa


This article proposes a balancing procedure for the deflation of input-output (I-O) tables from the viewpoint of users. This is a 'subjective' variant of the Weighted Least Squares (WLS) method, already known in the literature. It is argued that it is more flexible than other methods, and it is shown that SWLS subsumes the first-order approximation of RAS as a special case. Flexibility is due to the facts that (a) users can attach differential 'reliability' weights to first (unbalanced) estimates, depending on the confidence they have in the different parts of their pre-balancing work, (b) differently from RAS, one is not bound to take any row or column total as exogenously given, and (c) additional constraints can be added to it. The article describes also how SWLS was utilised to estimate a yearly (1959-2000) series of constant-price I-O tables for the Italian economy.

Suggested Citation

  • Giorgio Rampa, 2008. "Using Weighted Least Squares to Deflate Input-Output Tables," Economic Systems Research, Taylor & Francis Journals, vol. 20(3), pages 259-276.
  • Handle: RePEc:taf:ecsysr:v:20:y:2008:i:3:p:259-276
    DOI: 10.1080/09535310802344349

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    Cited by:

    1. Cellura, Maurizio & Longo, Sonia & Mistretta, Marina, 2011. "The energy and environmental impacts of Italian households consumptions: An input–output approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(8), pages 3897-3908.
    2. Rampa, Giorgio, 2012. "All Because of Euro? On Some Structural Changes in the Italian Foreign Trade, 1960-2000 - Tutta colpa dell’euro? Alcuni mutamenti strutturali del commercio estero italiano, 1960-2000 1960-2000 -," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 65(1), pages 97-107.
    3. Uwe Blien & Friedrich Graef, 2013. "The ADETON method," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 33(2), pages 135-150, October.
    4. Lavanda, Italo, 2012. "Employees’ Compensation Share in Italy - La quota del reddito da lavoro dipendente in Italia (1965-2000)," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 65(1), pages 55-64.
    5. Rodrigues, João F.D. & Rueda-Cantuche, José M., 2013. "A two-stage econometric method for the estimation of carbon multipliers with rectangular supply and use tables," Ecological Economics, Elsevier, vol. 95(C), pages 206-212.


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