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THE NATURE OF AUSTRALIAN REGIONAL INPUT-OUTPUT MULTIPLIERS
Abstract
This paper presents the first general analysis of the multipliers derived from twenty-nine Australian regional (GRIT) input-output tables, ranging from metropolitan areas to quite isolated regions. The study attempts to summarise the formidable array of results, aiming to provide an empirical reference point for research into regional multipliers, to identify any regularities in the multiplier components and to suggest conclusions for general policy purposes.
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NOTES AND REFERENCES
Jensen R. C., Mandeville T. D. and Karunaratne N. D.. 1979. . Regional Economic Planning: Generation of Regional Input-Output Analysis . , London : : Croom Helm. .
G.R. West, J.T. Wilkinson and R.C. Jensen, Generation of Regional Input-Output Tables for the State and Regions of South Australia, Report to the Treasury Department, the Department of Urban and Regional Affairs and the Department of Trade and Industry, Department of Economics, University of Queensland, 1979; G.R. West, J.T. Wilkinson and R.C. Jensen, Generation of Regional Input-Output Tables for the Northern Territory, Report to the Department of the Chief Minister of the Northern Territory, Department of Economics, University of Queensland, 1980. The Northern Territory tables have been revised by T.J. Mules and J.B. Morison in Revision of Northern Territory Input-Output Tables, Report to the Northern Territory Department of the Chief Minister, Department of Economics, University of Queensland, 1981.
See R.A. Powell, R.C. Jensen, G.R. West, M.B. Condon & J.T. Wilkinson, The Impact of the Tobacco Industry on the Regional, State and Australian Economies (2 vols.), Report to the Tobacco Institute of Australia Ltd., Department of Agricultural Economics and Business Management, University of New England and the Department of Economics, University of Queensland, 1981.
West G. R.. 1980. . ‘Generation of regional input-output tables (GRIT): an introspection’. . Economic Analysis and Policy . , Vol. 10((1, 2)): 71––86. .
Regional input-output multipliers can be used to estimate the total change (either totally over all sectors or partially over individual sectors) within a regional economy, in terms of industry output, household income, or employment, resulting from a given economic stimulus. See Jensen et al., op. tit., 1979.
For example, B.H. Stevens & G.A. Trainer, ‘The generation of error in regional input-output impact models’, Regional Science Research Institute, Working Papers, A1 1976, pp. 1–76; R.C. Jensen & G.R. West, ‘The effect of relative coefficient size on input-output multipliers’, Environment and Planning, A, 12, 1980, pp. 659–70.
The difficulties associated with the comparison of input-output tables with different accounting conventions are demonstrated in R.C. Jensen, ‘Some accounting procedures and their effects on input-output multipliers’, Annals of Regional Science, 12, 1978, pp. 21–38.
For examples, tables for the regions of Western Australiain: Western Australian Department of Resources Development, Major Development Project Impact Study, Perth, 1980; and for New Zealand regions in L.J. Hubbard & W.A.N. Brown, Multipliers from Regional Non-Survey Input-Output Tables for New Zealand, Agricultural Economics Research Unit, Lincoln College, 1980.
The multiplier definitions used in this paper follow the format described in G.R. West & R.C. Jensen, ‘Some reflections on input-output multipliers’, Annals of Regional Science, 14, 1980, pp. 77–89.
Leontief W.. 1972. . “‘The dynamic inverse’. ”. In Contributions to Input-Output Analysis . , Edited by: Carter A. P. and Brady A.. Amsterdam : : North Holland. .
Miernyk W. H.. 1968. . ‘Long-range forecasting with a regional input-output model’. . Western Economic Journal . , Vol. 6((3)): 165––76. .
Engerman S.. 1965. . “‘Regional aspects of stabilization policy’. ”. In Essays in Federalism . , Edited by: Musgrave R. A.. Washington : : Brookings Institution. .
Jensen R. C.. 1980. . ‘The concept of accuracy in input-output’. . International Regional Science Review . , Vol. 5:: 139––54. .
And correspondingly less confidence in those tables with less superior data of a more reliable nature. The research team regards the Victorian tables to be less reliable in this respect. Superior data is the term given to data originating from sources considered to be more reliable than mechanical estimates.
R.C. Jensen & R.A. Powell, ‘The role of the rural sectors in the economies of Queensland region: an application of input-output analysis’, paper to the Fifth Meeting of the Australian and New Zealand Section of the Regional Science Association, Tanunda, South Australia, 1980.
See, however, Jensen and Powell, op. cit. for an example of a more detailed comparison of sector multiplier structure between regions.
G.J.D. Hewings and M.C. Romanos, ‘Simulating less developed regional economies under conditions of limited information’, University of Illinois, 1981, mimeo.