A Note on Weighted Aggregation in Input-Output Analysis

Abstract

literature,2 been discussed in terms of simple aggregation, i.e., aggregation as a simple sum with unit weights attached to each original sector (sector before aggregation). Simple aggregation is a special case of weighted aggregation, and it can rather easily be shown that most of the fundamental relationships, and hence the theorems, established for the case of simple aggregation hold equally in the case of weighted aggregation, by simply changing the weight of each original sector from unity to some given positive value and reinterpreting the conditions of the theorems. Nevertheless, it should be noted that in the case of weighted aggregation new important problems emerge in relation to the following points. Firstly, in weighted aggregation there is a possibility of choosing a particular set of weights so that the aggregation bias may vanish, while in simple aggregation such a choice is obviously impossible. In fact, as will be shown in the next section, the aggregation bias does vanish for a particular set of weights in some special cases.