Coefficient Change in Input–Output Models: Theory and Applications

Abstract

A general theory of coefficient change in input–output and social accounting models is proposed. The major contribution is the introduction of the notion of a ‘field of influence’ as the basis for interpreting the effects of coefficient change. This basis is elaborated through a set of propositions. In Section 3, the implications are explored; first, the first-order changes in one row or column are examined. This approach is then generalized to changes in two or more rows or columns and the biproportional or RAS technique is shown to be a special case of coefficient change. Empirical applications are presented in Section 4, drawing on the work in regional and national economies. The paper concludes with some remarks about ways in which this work might be linked with parallel interests in decomposition of input–output systems.