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Examining and Evaluating Aggregation Scale Effects on Interregional Commodity by Industry Trade Flow Estimates

Author

Listed:
  • Walter Schwarm

    (Department of Economics, California State University-Sacramento)

  • Randall Jackson

    (Regional Research Institute, West Virginia University)

Abstract

This study tests the implementation of interindustry transaction flows in a national system of economic regions derived from an interregional accounting framework and initial information on interregional shipments. The interregional flows connecting states are estimated using a method based on the Commodity Flow Survey data published by the Bureau of Transportation Statistics, which adjusts the estimated interregional SAM to insure the integrity of intraregional and system-wide, national accounts. The resulting US interregional framework describes flows within and among the 51 regions We examine results of a series of trials testing the validity of the resulting interregional trade-flow data versus other data sources and estimates such as Liu and Vilain (2004). The overall difference in estimation accuracy arising from differences in the base aggregation level is a quantity that has attracted little prior attention. To address this issue this paper, in addition to estimating and comparing trade flows using aggregated sectors, also estimates the flows using the 509 disaggregated IMPLAN sectors applies aggregation only in the final comparison steps. This allows us to comment on the additional role sectoral aggregation scale may play in the relative accuracy of trade flow estimation results.

Suggested Citation

  • Walter Schwarm & Randall Jackson, 2006. "Examining and Evaluating Aggregation Scale Effects on Interregional Commodity by Industry Trade Flow Estimates," Working Papers Working Paper 2006-04, Regional Research Institute, West Virginia University.
    • Handle: RePEc:rri:wpaper:2006wp04
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    File URL: https://researchrepository.wvu.edu/rri_pubs/114/
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    References listed on IDEAS

    as
    1. Kazumi Hitomi & Yasuhide Okuyama & Geoffrey Hewings & Michael Sonis, 2000. "The Role of Interregional Trade in Generating Change in the Regional Economies of Japan, 1980-1990," Economic Systems Research, Taylor & Francis Journals, vol. 12(4), pages 515-537.
    2. Round, Jeffrey I, 1985. "Decomposing Multipliers for Economic Systems Involving Regional and World Trade," Economic Journal, Royal Economic Society, vol. 95(378), pages 383-399, June.
    3. Randall Jackson & Walter Schwarm & Yasuhide Okuyama & Samia Islam, 2006. "A method for constructing commodity by industry flow matrices," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(4), pages 909-920, December.
    4. Anonymous, 1961. "Organization for European Economic Cooperation," International Organization, Cambridge University Press, vol. 15(1), pages 204-205, January.
    5. Patrick Canning & Zhi Wang, 2005. "A Flexible Mathematical Programming Model to Estimate Interregional Input–Output Accounts," Journal of Regional Science, Wiley Blackwell, vol. 45(3), pages 539-563, August.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    aggregation scale effects; commodity by industry; trade flow; regional development;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics

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