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On the Interpretation of Fixed Input Coefficients under Aggregation

Author

Listed:
  • Louis de Mesnard

    (LEG - Laboratoire d'Economie et de Gestion - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique)

  • Erik Dietzenbacher

Abstract

A fixed input coefficient is traditionally interpreted as the additional input from one sector that is required for an additional unit of output in another sector. It is shown that this ratio of increments is, in general, not fixed under aggregation. A tight upper and lower bound for its variation are derived. A necessary and sufficient condition for the ratio to be fixed is obtained. As a consequence, adopting the common assumption of fixed input coefficients implies that additional assumptions at any subaggregate level are required. Similar results are given for the Leontief inverse, whose typical element is usually interpreted as the additional output in one sector that is required for an additional unit of final demand in another sector.

Suggested Citation

  • Louis de Mesnard & Erik Dietzenbacher, 1995. "On the Interpretation of Fixed Input Coefficients under Aggregation," Post-Print hal-00383944, HAL.
    • Handle: RePEc:hal:journl:hal-00383944
    DOI: 10.1111/j.1467-9787.1995.tb01256.x
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    Citations

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    Cited by:

    1. Roland Lantner & Didier Lebert, 2013. "Dominance, dependence and interdependence in linear structures. A theoretical model and an application to the international trade flows," Post-Print halshs-00825477, HAL.
    2. Erik Dietzenbacher & Umed Temurshoev, 2012. "Input-output impact analysis in current or constant prices: does it matter?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 1(1), pages 1-18, December.
    3. Malcolm Beynon & Max Munday, 2008. "Stochastic key sector analysis: an application to a regional input–output framework," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(4), pages 863-877, December.
    4. Lan, Jun & Malik, Arunima & Lenzen, Manfred & McBain, Darian & Kanemoto, Keiichiro, 2016. "A structural decomposition analysis of global energy footprints," Applied Energy, Elsevier, vol. 163(C), pages 436-451.
    5. Roland Lantner & Didier Lebert, 2013. "Dominance, dependence and interdependence in linear structures. A theoretical model and an application to the international trade flows," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00825477, HAL.
    6. Philip Mccann & John H. LL. Dewhurst, 1998. "Regional Size, Industrial Location and Input-Output Expenditure Coefficients," Regional Studies, Taylor & Francis Journals, vol. 32(5), pages 435-444.
    7. Llop Llop, Maria & Manresa, Antonio, 1954-, 2010. "Linear Aggregation In The Social Accounting Matrix Framework," Working Papers 2072/151547, Universitat Rovira i Virgili, Department of Economics.
    8. Roland Lantner & Didier Lebert, 2013. "Dominance, dependence and interdependence in linear structures. A theoretical model and an application to the international trade flows," Documents de travail du Centre d'Economie de la Sorbonne 13043, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    9. G. Lindberg & P. Midmore & Y. Surry, 2012. "Agriculture’s Inter-industry Linkages, Aggregation Bias and Rural Policy Reforms," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 552-575, September.

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