Regional Input-Output Tables and the FLQ Formula: A Case Study of Finland
This paper examines the use of location quotients (LQs) in constructing regional input-output tables. Its focus is on the modified FLQ formula proposed by Flegg and Webber (1997). Using data for 20 Finnish regions, ranging in size from very small to very large, we determine appropriate values for the unknown parameter delta in this formula. We also develop a regression model that can be used to select an appropriate value for delta. We find that the FLQ yields results far superior to those from standard LQ-based formulae. Our findings should be very helpful to any regional analyst who is contemplating making use of the FLQ formula to generate an initial set of regional input-output coefficients. These coefficients could be used either as part of the RAS procedure or as the non-survey foundations of a hybrid model. We consider possible improvements to the FLQ formula but find that including a regional specialization term in this formula only marginally enhances its performance. On balance, we would recommend using the original FLQ formula.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Welthandelsplatz 1, 1020 Vienna, Austria|
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tobias Kronenberg, 2009. "Construction of Regional Input-Output Tables Using Nonsurvey Methods," International Regional Science Review, SAGE Publishing, vol. 32(1), pages 40-64, January.
- F J Harrigan & J W McGilvray & I H McNicoll, 1980. "Simulating the Structure of a Regional Economy," Environment and Planning A, SAGE Publishing, vol. 12(8), pages 927-936, August.
- Geoff Riddington & Hervey Gibson & John Anderson, 2006. "Comparison of Gravity Model, Survey and Location Quotient-based Local Area Tables and Multipliers," Regional Studies, Taylor & Francis Journals, vol. 40(9), pages 1069-1081.
- Richard Harris & Aying Liu, 1998. "Input-Output Modelling of the Urban and Regional Economy: The Importance of External Trade," Regional Studies, Taylor & Francis Journals, vol. 32(9), pages 851-862.
- Philip Mccann & John H. LL. Dewhurst, 1998.
"Regional Size, Industrial Location and Input-Output Expenditure Coefficients,"
Taylor & Francis Journals, vol. 32(5), pages 435-444.
- JH Ll DEWHURST, . "Regional Size, Industrial Location And Input-Output Expenditure Coefficients," Dundee Discussion Papers in Economics 074, Economic Studies, University of Dundee.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p334. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.