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Estimating induced effects in IO impact analysis: variation in the methods for calculating the Type II Leontief multipliers

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  • Tobias Emonts-Holley
  • Andrew Ross
  • Kim Swales

Abstract

Type II input–output (IO) multipliers are frequently used for impact analysis. Unfortunately, there is no standard way to calculate these. The fundamental issue is that these multiplier methods endogenise household consumption but all have drawbacks because the IO accounts are missing key information required to consistently link household income and consumption to domestic economic activity. Using compatible regional and national data sets, we evaluate the values for various IO Type II multipliers to a benchmark value calculated with the aid of social accounting matrix data. The results suggest that the variation in Type II IO multiplier values generated by these alternative methods is an empirically non-trivial issue.

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  • Tobias Emonts-Holley & Andrew Ross & Kim Swales, 2021. "Estimating induced effects in IO impact analysis: variation in the methods for calculating the Type II Leontief multipliers," Economic Systems Research, Taylor & Francis Journals, vol. 33(4), pages 429-445, October.
    • Handle: RePEc:taf:ecsysr:v:33:y:2021:i:4:p:429-445
    DOI: 10.1080/09535314.2020.1837741
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    Cited by:

    1. Oluwafisayo Alabi & Karen Turner & Julia Race & Antonios Katris, 2022. "Proposition for an additional input output multiplier metric to access the value contribution of regional cluster industries," Papers in Regional Science, Wiley Blackwell, vol. 101(4), pages 795-809, August.

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