Abstract
We developed a model of economy-wide production systems by incorporating a material balance concept into the standard input–output framework. This inter-industrial process model represents the physical flow of materials throughout the industrial network and thus is able to address the entire process involved with the production of a target product according to its material content. The model, which is based on some physically allowable assumptions, was calibrated using the available input–output coefficients for aggregated processes (sectors). We used detailed data on environmentally hazardous emissions and labour requirements for each sector to analyse the liabilities of substitutable products in terms of different factors, origins, and stages of the inter-industrial process network. To empirically examine the model, we applied it to analyse the production of a popular gasoline-powered vehicle and an electro-powered vehicle.
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