Summary Measures of Interconnectedness for input-output Models

The performance of six alternative measures of input-output model interconnectedness was tested on a set of fourteen empirical models for Australia, for the State of Queensland, and for subregions within Queensland. Such measures of interconnectedness could be analytically useful, along with the input-output models themselves, as descriptions of the nature of the modeled economies, as aids in model estimation, and perhaps as indications of the level of economic development. Since there is no generally accepted interconnectedness measure, the six tested measures could be judged only on their consistency of behavior and on the validity of their underlying logic. Accounting conventions and model aggregation both affected most of the measures. The results suggest that mean intermediate coefficient total per sector is the most generally useful interconnectedness measure.