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On The Parameterization Of Techniques For Representing Regional Economic Structures

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  • Andrea Bonfiglio

Abstract

This paper is concerned with two parameterized methods of regionalising input-output coefficients: the Flegg et al. Location Quotient (FLQ) and its augmented version (AFLQ). For applying the two techniques, a parameter δ has to be estimated. In this regard, the paper faces two matters that are still open in the literature: the existence of a range of δ that can be used in different regions and the estimation of the most appropriate value of δ. For this aim, a Monte Carlo simulation has been carried out in order to generate 'true' multiregional I-O tables randomly. From the simulation, analyses based on probability distributions and regression were also carried out. Finally, these simulation results have been compared with those of an empirical case. Results confirm that there is actually a range of values of δ within which the best δ is more likely to fall. For the FLQ, this range is centred on 0.3 with an associated probability of 33% (if the width of the range is set at 0.1), whereas, for the AFLQ, the relevant range is between 0.3 and 0.4 with a probability by 38%. Finally, this paper provided a way to estimate the best δ for a given region, without knowing the relevant and detailed economic structure at sectoral level.

Suggested Citation

  • Andrea Bonfiglio, 2009. "On The Parameterization Of Techniques For Representing Regional Economic Structures," Economic Systems Research, Taylor & Francis Journals, vol. 21(2), pages 115-127.
  • Handle: RePEc:taf:ecsysr:v:21:y:2009:i:2:p:115-127
    DOI: 10.1080/09535310902995727
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    Citations

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    Cited by:

    1. repec:wfo:wstudy:47499 is not listed on IDEAS
    2. Kristinn Hermannsson, 2016. "Beyond Intermediates: The Role of Consumption and Commuting in the Construction of Local Input–Output Tables," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(3), pages 315-339, July.
    3. Kowalewski, Julia, 2012. "Inter-industrial relations and sectoral employment development in German regions," HWWI Research Papers 127, Hamburg Institute of International Economics (HWWI).
    4. Anthony T. Flegg & Timo Tohmo, 2013. "Estimating regional input coefficients and multipliers: The Use of the FLQ is not a Gamble," Working Papers 20131302, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    5. Andrea Bonfiglio & Roberto Esposti & Francesco Pagliacci & Franco Sotte & Beatrice Camaioni, 2014. "Regional perspectives and distributional effects of European regional policies," WWWforEurope Working Papers series 66, WWWforEurope.
    6. Bonfiglio, Andrea & Esposti, Roberto, 2011. "Assessing the Economic Impact of an Agricultural Project in a Petroleum-Exporting Country. The Case of Palm Oil in the Republic of Congo," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114260, European Association of Agricultural Economists.
    7. Bonfiglio, Andrea & Camaioni, Beatrice & Esposti, Roberto & Pagliacci, Francesco & Sotte, Franco, 2015. "Distributional and Re-distributional Patterns of CAP Expenditure through the EU Space," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207273, Italian Association of Agricultural and Applied Economics (AIEAA).
    8. Bonfiglio, A. & Camaioni, B. & Coderoni, Silvia & Esposti, Roberto & Pagliacci, F. & Sotte, F., 2015. "Distribution and re-distribution of CAP expenditure throughout the EU," 2015 Conference, August 9-14, 2015, Milan, Italy 211364, International Association of Agricultural Economists.
    9. Bonfiglio, Andrea & Esposti, Roberto, 2016. "Analysing the economy-wide impact of the supply chains activated by a new biomass power plant. The case of cardoon in Sardinia," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(1), April.
    10. Tony Flegg & Leonardo J. Mastronardi & Carlos A. Romero, 2015. "Evaluating the FLQ and AFLQ formulae for estimating regional input coefficients: empirical evidence for the province of C¨®rdoba, Argentina," Working Papers 20151508, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    11. Kowalewski, Julia, 2012. "Regionalization of national input-output tables: Empirical evidence on the use of the FLQ formula," HWWI Research Papers 126, Hamburg Institute of International Economics (HWWI).
    12. 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.
    13. Sunggoan Choi, 2013. "Revealing the Growth Potentials with Input-Output Model at Sub-national Level," ERSA conference papers ersa13p73, European Regional Science Association.
    14. Anthony T. Flegg & Leonardo J. Mastronardi & Carlos A. Romero, 2014. "Empirical evidence on the use of the FLQ formula for regionalizing national input-output tables: The case of the Province of C¨®rdoba, Argentina," Working Papers 20141406, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.

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