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A New Improvement Proposal to Estimate Regional Input–Output Structure Using the 2D-LQ Approach

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  • Rubén Martínez-Alpañez

    (Department of Applied Economics, University of Murcia, 30100 Murcia, Spain)

  • José Daniel Buendía-Azorín

    (Department of Applied Economics, University of Murcia, 30100 Murcia, Spain)

  • María del Mar Sánchez-de-la-Vega

    (Department of Quantitative Methods for Economy and Business, University of Murcia, 30100 Murcia, Spain)

Abstract

The use of location quotients for the estimation of regional input–output tables has been found to be a useful and efficient tool to estimate intraregional production coefficients and multipliers. This paper considers some regionalisation methodologies based on location quotients for the estimation of input–output tables—some of which have hitherto not been analysed at the regional level—and studies which one provides the best estimation (best goodness of fit). We focus the analysis mainly on the accuracy of Flegg’s location quotient (FLQ) and two-dimensional location quotient (2D-LQ). The analysis makes use of the multiregional input–output table for Korea for the year 2015 to evaluate the accuracy of the 2D-LQ method against FLQ. A novel proposal for the determination of the parameters corresponding to the 2D-LQ method is presented. This proposal is evaluated in Korean regions and is also applied to Spanish regions. The results obtained from the research conclude the general superiority of the 2D-LQ method, thus corroborating the results of other studies at the national level as well as the validity of our proposal.

Suggested Citation

  • Rubén Martínez-Alpañez & José Daniel Buendía-Azorín & María del Mar Sánchez-de-la-Vega, 2023. "A New Improvement Proposal to Estimate Regional Input–Output Structure Using the 2D-LQ Approach," Economies, MDPI, vol. 11(1), pages 1-17, January.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:1:p:20-:d:1030183
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    References listed on IDEAS

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    1. Yongming Huang & Anthony T. Flegg & Timo Tohmo, 2014. "Cross-Hauling and Regional Input-Output Tables: The Case of the Province of Hubei, China," Working Papers Working Paper 2014-03, Regional Research Institute, West Virginia University.
    2. Anthony T. Flegg & Timo Tohmo, 2019. "The regionalization of national input‐output tables: A study of South Korean regions," Papers in Regional Science, Wiley Blackwell, vol. 98(2), pages 601-620, April.
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    4. Anthony T. Flegg & Leonardo J. Mastronardi & Carlos A. Romero, 2016. "Evaluating the FLQ and AFLQ formulae for estimating regional input coefficients: empirical evidence for the province of Córdoba, Argentina," Economic Systems Research, Taylor & Francis Journals, vol. 28(1), pages 21-37, March.
    5. Philip Mccann & John H. LL. Dewhurst, 1998. "Regional Size, Industrial Location and Input-Output Expenditure Coefficients," Regional Studies, Taylor & Francis Journals, vol. 32(5), pages 435-444.
    6. 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.
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