Efficient updating of regional supply and use tables with the national-level statistics

Supply and use tables (SUTs) lay out a detailed picture of the entire economy, providing an overview of the production process and use of commodities. The governmental agencies produce these mainly at the national level to derive components related to the calculation of the gross domestic product (GDP). The national SUTs, however, do not capture the heterogeneity of regions within a country. The regional SUTs, on the other hand, are difficult and costly to compile. In the absence of regularly compiled regional SUTs, analysts typically resort to hybrid models based on mechanically updated tables with less extensive data requirements. However, the approaches currently available in the literature do not necessarily guarantee a consistent structure of the SUTs when there is a mismatch in spatial scale at which sectoral output data are available. Building on the multiregional generalized RAS, this paper proposes a modification to the structure of the benchmark matrix that guarantees the supply–use accounting balance as well as the identity of GDP by income and GDP by expenditure at the regional level in the projected matrix. As a result, the procedure allows for efficient production of regional SUTs appropriate for calculating multiplier effects from the national-level statistics.