Illustration of Single-Regional and Inter-Regional Approach in Regional Input-Output Analysis

Abstract

Analytical works usually use single-regional approach which does not demand so much data. However, this approach disregards flows of output among regions. This leads to a misrepresentation of results which can be eliminated by using Inter-regional input-output model that requires more data to be employed. This paper illustrates the differences between the two different approaches of regional input-output model construction and their results. We construct inter-regional and single-regional models for all 14 regions of the Czech Republic and with 82 products according to the Classification of Products CZ-CPA. The results are compared on the level of Leontief’s matrix and multipliers. We use graphical illustrations to depict the systematicness of differences. The single-regional approach proves a systematic undervaluation of specific products and regions contrary to other regions. The graphical analysis shows the significance of the connection among regions. This illustrates the disadvantage of the single regional approach. Finally, the results confirm the idea of a signifiant analytical misrepresentation of impacts modelled by this approach in the case of data for the Czech Republic.

Keywords

• Regional Input-Output Tables
• Input-Output analysis
• Leontief`s multipliers
• IRIO