Input–Output Model

Wassily Leontief, a winner of the Nobel Prize in Economic Sciences, has been called “the father of input–output analysis.” In the 1930s, striving to depict the interrelationships among the various segments of the U.S. economy, he and his associates constructed and analyzed national input–output tables for 1919 and 1929. Leontief’s classic book The Structure of American Economy, 1919–1929 was published in 1941. Twelve years later, Leontief and others authored Studies in the Structure of the American Economy. Of note was a chapter by Walter Isard entitled “Some Empirical Results and Problems of Regional Input–Output Analysis.” Between 1966 and 1977, a team of researchers led by Philip Bourque of the University of Washington and Eldon Weeks of Washington State University produced a unique series of survey-based regional input–output tables for the state. Focusing on the 1972 Washington input–output study for illustrative purposes, this chapter discusses the structure of regional input–output tables, the estimation of the input–output transactions, and the formulation of regional input–output models. The chapter concludes with an impact analysis—calculating the economic impact of professional baseball—the most common use of regional input–output models.