Estimating high-resolution interregional input–output tables: a Bayesian spatial approach

Due to the scarcity of subnational interregional input–output (IRIO), various approaches to their estimation are actively under investigation in the literature. This paper focuses on the application of spatial econometric method. It determines intra- and interregional coefficients through a joint procedure which successfully avoids the direct recycling of estimates for other geographies and granularities. Instead, the use of Bayesian methods is proposed, which formally integrate limited evidence from existing regional tables (Finland) with a set of sectoral data on value added for 73 NUTS-3 regions in Poland, the latter being dominant. An empirical test of replicating the Korean survey-based IRIO table demonstrates that the accuracy of this approach slightly outperforms an alternative IRIOLQ procedure. The incorporation of time-based distance measurement has only modest effects on empirical fit, and the use of big geolocation dataset to account for commuting relocates 18.9% of the induced effect from a city to its periphery.