Interregional Input-output Model Research Articles

Social protection and COVID-19: Evaluation of regional impacts of the Emergency Aid policy in Brazil

The new Coronavirus pandemic (COVID-19), which began in late 2019 in China, lead to a health and economic crisis of significant proportions. The decrease in economic activity in order to prevent further spread of the disease affected all economic sectors, resulting in the unprecedented loss of jobs and the weakening of the informal economy. The Emergency Aid (EA) was created with the purpose of guaranteeing a subsistence income, minimizing the economic problems brought about by the pandemic. The aim of this paper is to analyze the direct and indirect impacts of the EA income transfers on the economy of Brazilian states. Of particular interest is to assess the distribution of indirect impacts as there may be spillovers of income between regions because of inter-sector relations and production chains. Thus, given the differences in production structures, the accounting of indirect impacts can result in a structure of regional distribution of benefits that is quite different from the initial one. The aim of this study is to assess which regions are relatively more benefited by comparing the initial structure of the distribution of the EA benefits with the final structure, after accounting for the spillovers. To do so, an interregional input-output model developed by Haddad et al. (2018) and data from the Brazilian Transparency Portal (Portal da Transparência) on resources allocated by the EA in the period from April to August 2020 were used. The results show that the states that benefited most in the initial distribution of the EA are the relatively most populous and poorest (Northeast) and the most benefited in the final distribution are those with more complex and relatively more developed productive structures (Southeast and South).

An input–output analysis of transportation equipment manufacturing industrial transfer: Evidence from Beijing‐Tianjin‐Hebei region, China

AbstractAlthough the industrial transfer path is of great significance to the distribution of the industrial relocators and receivers in the process of industrial transfer, how to measure the input–output relationship between industries is still unclear. Based on an adjusted input–output table, this paper attempts to measure the input–output relationship for transport equipment manufacturing industry in the Beijing‐Tianjin‐Hebei region. The interregional input–output model was used to realize the calculation of the single department transfer amount. Moreover, combining with the calculation results, the transfer path of the transportation equipment manufacturing was characterized. The results showed that the phenomenon of transfer over space in the transportation equipment manufacturing industry was distinct. The industrial transfer has shifted from the coastal areas to central and western regions. Sixteen provinces, mainly including Inner Mongolia, Henan, Shanxi, etc., had a net outflow of the transportation equipment manufacturing industry. The rest is net inflow provinces. Transportation equipment manufacturing industrial transfer is moving into Beijing and Tianjin. This paper will provide a reference for reasonable and orderly acceptance of industrial transfer from a quantitative perspective.

Estimation of socioeconomic impacts of wind power projects in Brazil's Northeast region using Interregional Input-Output Analysis

Brazil's Northeast is the country's least developed region and accounts for half of its potential for wind power generation. Recent wind energy projects have directed substantial investment flows to this region and are expected to propel regional socioeconomic development. This paper estimates interregional socioeconomic impacts of onshore wind power deployment in Brazil's Northeast region by applying a new Interregional Input-Output model with endogenized households. By assessing the direct, indirect and induced effects on economic sectors and households, cross-sectoral insights for regional development policies are identified. The set of projects considered consists of 2911 MW procured through auctions, which will become operational by 2023. Results show significant indirect and induced multiplier effects. Results indicate that 10 jobs/MW are created directly, while the total effect is 31.9 jobs/MW, meaning indirect and induced effects can be more than three times higher than direct impacts. More than 50% of the benefits occur in just a few key sectors. In the Northeast, the highest potential benefit on value added is revealed in the sectors: wholesale and retail trade; R&D and other business activities; financial intermediation; and real estate activities. These sectors reflect the potential for induced economic co-benefits mainly. However, the Rest of Brazil captures a significant part of total benefits, especially high-income jobs and high value-added activities. Therefore, we recommend that regional development policies focus on key sectors identified here and human development to provide O&M personnel and long-lasting benefits. Lastly, we discuss justice and equality issues related to our results.

The subnational supply chain and the COVID-19 pandemic: Short-term impacts on the Brazilian regional economy.

To control the transmission of coronavirus disease 2019 (COVID‐19), Brazilian local governments have adopted partial lockdown measures in economic sectors, thereby triggering transmission shocks along input–output supply chains. The national internal market and territorial disparities favor the formation of subnational production networks within borders, thus increasing the potential effects of lockdown measures on regional integration production networks. Therefore, this study makes hypothetical simulations of COVID‐19 mitigation policy decisions to understand the regional impacts on integration in supply chains, considering both domestic and global value chains. The generalized hypothetical extraction method is applied to a Brazilian interregional input–output model with 68 industries and 27 regions, imputing partial removals on intermediate consumption and final demand. The results suggest that richer subnational areas, mainly São Paulo and Rio de Janeiro, are proportionally more impacted by COVID‐19 trade shocks. However, the poorer peripheries are doubly affected, either by the foreign shock, which would damage their economic structure, or by the retraction of the subnational demand from core states. The findings highlight that economic shocks are spatially distributed through different industrial structures, thus stressing the need to avoid ‘one size fits all’ regional policies to mitigate the potential negative effects on exposed regions.

The Intra- and Inter-Regional Economic Effects of Smart Tourism City Seoul: Analysis Using an Input-Output Model

A competitive smart tourism city can be a solution for building resilience to address current and future crises and even be a booster of the economic effects of tourism, since it has an economic ripple effect both inside and outside of the city. This study tried to estimate the intra- and inter-regional economic effects of the smart tourism city Seoul, which has high competitiveness as a smart tourism city. First, this study tried to objectively clarify the scope of smart tourism based on a Delphi survey and then adopted the inter-regional input–output model. The results showed that smart tourism city Seoul is expected to create high income, high value-added, and job creation effects inside the city, and will greatly contribute to securing tax revenue. Outside of the city, smart tourism city Seoul is expected to induce high production effects. Based on these results, this study highlights the economic effects of a smart tourism city, which describes the convergence of technology and tourism.

Assessing the economic impact of tsunami and nuclear power plant disasters in Shizuoka, Japan: a dynamic inter-regional input–output (IRIO) approach

Natural disasters cause damage to regional economies. This study investigated how production activities in 35 municipalities of Shizuoka Prefecture recover when such activities stop due to a nuclear power plant disaster and tsunami that may be caused by a Nankai Megathrust Earthquake (NME). We developed a dynamic inter-regional input–output model (IRIO) featuring a production bottleneck due to a shortage of inputs and other goods. Using a simulation model, the economic damage caused by single and combined disasters was evaluated based on several recovery scenarios. The effect of depopulation in Japan on post-disaster recovery processes was also examined. This analysis provides useful disaster preparedness information for local governments and companies.

Modeling the inter-regional economic consequences of sequential typhoon disasters in China

Inter-regional economic development is threatened by high direct economic damage (DED) from multiple natural disaster events. However, estimations of the indirect economic impacts (IEIs) of a single disaster event cannot accurately reflect the superimposed impacts of sequential disasters on the inter-regional social-economic system. Thus, we employed the modified adaptive inter-regional input-output (MAIIO) model to reproduce the superimposed impacts of three typhoons (Utor, Usagi, and Fitow) on the economy under three scenarios. The results showed that the superimposed disturbance of sequential disasters amplified the IEIs of the DED and increased the amplitude of the negative fluctuations of the value added; the spatial ripple effects induced by the superimposed disturbance of multiple typhoon disasters were also different due to the spatial heterogeneity of the economic structure; the dynamic adaptive process of economic system with sequential disasters was that it tried to recover from early inter-regional IEIs after an initial disaster event, and then the occurrence of a new disaster before completion of the initial recovery brought new (amplified) IEIs. This study suggests that the sequential disasters within a short time interval impose a complex superimposed disturbance on the inter-regional economic system, and modelling the economic trajectory with sequential disasters is valuable for designing strategies for the synergistic development of inter-regional economic sustainability and disaster mitigation.

Accounting for price responses in economic evaluation of climate impacts for a fishery

The present study evaluates the economic impacts of fluctuations in anchovy (Engraulis spp.) catch in Gyeong-Nam (GN) province, South Korea, arising due to warming seawater, accounting for the effects of the responses of the anchovy price. It combines an inter-regional input-output (IRIO) model of two regions (i.e., GN province and all other provinces combined) with a simultaneous equation system (SES) of anchovy supply and demand functions estimated to make projections of the price and quantity of anchovies based on two greenhouse gas (GHG) concentration scenarios (i.e., representative concentration pathway (RCP) 4.5 and 8.5). Results indicate that estimates of the economic impacts for the two regions will be biased if we consider only the quantity (harvest) change when computing the economic impacts without accounting for the effects of the price responses. None of the previous IO-based economic impact analyses of fisheries account for the price effects induced by a quantity shock. This study fills this critical void by considering such effects.

Understanding internal water footprint inequality of the Egyptian households based on different income and lifestyles

Beyond the physical water scarcity in Egypt, income and expenditure variations can make Egypt’s water crisis even worse, hindering the equitable allocation of its water resources among different uses and consumer groups. This study traces the effects of income and expenditure inequality on the Egyptian households’ internal blue water-footprint (IWF), i.e. domestic freshwater embodied in households’ consumption. It (i) develops a water-extended interregional input-output (IRIO) model between Egypt and the rest of the world, integrated with households’ expenditure of 20 income groups. Thus, households’ IWF responsibility has been allocated to each group. Further, it (ii) calculates the IWF-Gini coefficients, quantifying the IWF inequality across Egypt. Results find that (a) the richest’s average IWF per household is 8.3 folds of the poorest’s. Compared to the latter, the former consumes 5, 24.7, and 29.7 folds of water embodied respectively in edible products, textile, and recreation. (b) Gini coefficients elaborate that IWF of necessities, i.e., agriculture (0.14) and processed food (0.18), are more equally distributed than that of mobility (0.87) and recreation (0.39). This is because luxury products are more consumed by the rich, accounting for a smaller proportion of the population. The study concludes that income-induced differences in diets and lifestyles affect Egyptian households’ IWF and its equality. The study elaborates a need for a more rational-allocative water-saving strategy in Egypt.

Информационные и методические аспекты моделирования распространения возобновляемой энергетики с использованием ОМММ-ТЭК

The research topic is the increasing process of electricity generation based on renewable energy sources (RES) in the Russian Federation and its regions. This paper aims to develop a methodology for modeling new RES technologies in the initial period of their dissemination. Its application allows to estimate the scale of energy generation in the regions fr om the standpoint of national economy efficiency. The research methodology includes the application of parametric analysis in the framework of interregional input-output model of optimization with detailed energy sector. Its essence is to increase step by step the cost of a new RES technology in the competitive environment of traditional technologies until it leaves the optimal plan. The parametric process involves finding the threshold values of the RES technology cost in the region, passing by which the technology changes its intensity (efficiency) dramatically. A comparative retrospective analysis of RES technologies spreading in the country and regions is carried out. It is shown the importance of taking into account the installed capacity utilization factor when modeling technologies. Formal procedures for embedding it in energy technologies of the model are described. The trajectories of integrated effects fr om spreading of renewable energy technologies, obtained as a result of parametric analysis, can be ranked by region and used for selective investment policy on the part of the state. It should be aimed at supporting the development of energy on RES primarily in those regions wh ere the maximum integral effect is obtained.

Promoting social development in developing countries through solar thermal power plants

Abstract Renewable Energy development can generate co-benefits, such as jobs, income, and economic output. Concentrated Solar Power technology is a key technology for the electric power sector decarbonization as it generates dispatchable electricity, while also creates direct, indirect and induced jobs. Using an innovative methodology, this study estimates the socioeconomic co-benefits of Concentrated Solar Power deployment in a developing country, where most of its potential is located in sites with low-income population. First, local content scenarios were defined based on the assessment of the installed and idle capacities of the country’s industry (at the national and local levels) throughout the Concentrated Solar Power value chain. Then, these scenarios are applied to an interregional Input-Output model to estimate direct, indirect and induced jobs, income and economic output generated by the deployment of a 300 MW solar thermal programme. Findings refer to the regional and national levels, emphasizing that the analysis of Concentrated Solar Power impacts should focus on the mesoscale (regional level instead of national levels only). Depending on the local content scenario, findings show that the proposed Concentrated Solar Power development could generate between 45.40 and 61.21 jobs (direct, indirect and induced) per MW installed, and 0.94 to 1.29 million of United States Dollar (income) per MW installed.

China’s emissions embodied in exports: How regional and trade heterogeneity matter

Trade facilitates the shifts of emissions from one place to another. Although studies have shown that regionally disaggregated model and model that distinguishes processing exports at the national level are necessary to estimate the embodied emissions in China's exports, no study evaluates this issue by simultaneously taking both regional and trade heterogeneity into account. To fill this gap, we re-estimate the CO2 emissions embodied in China’s exports at both regional and industrial level, by using the newly-developed inter-regional input-output (IRIOP) model that distinguishes processing trade from other trade at the regional level. Results show that compared to the IRIOP model, the traditional multi-regional input-output (MRIO) model has overestimated the environmental loss from exports by 14%–25% in 2002 and 7%–20% in 2012 for different regions. The largest bias is found in regions and industries with the highest processing export shares. Therefore, the IRIOP model gives more accurate accounting on the regional environmental loss due to national exports and thus is important for establishing effective emission mitigation policies.

Research on China’s Regional Economic Linkages: Based on the Analyses of Carbon Emission Transfers and Labor Mobility

In the face of the dual challenges of coordinated development of regional economy and sustainable development, strengthening the regional economic linkages is critical to realizing the coordinated development of the regional economy based on the reasonable transfer of carbon emissions. Under the background of industrial transfer, the authors used the inter-regional input–output model to measure the carbon emissions and labor transfers among 30 provinces in 2002, 2007 and 2010, analyzed the relationship between labor mobility and the spatial transfer of carbon emissions and introduced their scales and directions into a gravity model to measure the economic relations among regions. The results show that the embodied carbon emission tends to transfer from western and northeastern China to central and eastern China, which is consistent with the direction of labor mobility, and both of them show the feature of spatial clustering. Under the effects of carbon emission transfers and labor mobility, the radiation effects of the central node provinces in China such as Guangdong, Zhejiang, Hebei, Beijing, Henan and Gansu have given rise to the integrated regional spatial organizations of Beijing–Tianjin–Hebei, Yangtze River Delta Pan-Pearl River Delta and northwestern China, among which Yangtze River Delta and Pan-Pearl River Delta enjoy a relatively stable structure.

Direct and embodied energy-water-carbon nexus at an inter-regional scale

Energy, water and carbon flows are highly intertwined in economy and influence urban and regional sustainability. Few insights have been acquired for energy-water-carbon nexus at inter-regional scale considering both in- and trans-boundary flows. Here we propose an interactive framework to assess inter-regional energy-water-carbon nexus, encapsulating both direct nexus flows within territory and nexus flows embodied in final consumption. An inter-regional input-output model is established to account for energy-related water footprint, water-related energy footprint and water-related carbon footprint from a consumption-based perspective. Using Guangdong-Hong Kong as a case study, we find that though these nexus footprints contribute a small fraction of the total energy, water and carbon footprints of both regions in 2012, their impacts should not be neglected due to higher intensities. The direct intensities of water-related energy and water-related carbon are more than 2 times higher than the total energy and carbon intensities, while their embodied intensities are over 6 times higher. Inter-regional trade plays an important role in controlling energy-water-carbon nexus of both sides. About 29–44% of the consumption-based nexus footprints of Hong Kong’s consumption are outsourced to Guangdong and other regions, while 21–24% of Guangdong’s footprints are from production elsewhere. These are strong signals showing the importance of managing energy-water-carbon nexus on a cross-border and fully-interactive basis.

Evaluating the spatial spillover effects of tourism demand in Shizuoka Prefecture, Japan: an inter-regional input–output model

Shizuoka prefecture in Japan has many tourism destinations and a lot of international and domestic tourists visit it. There are regional cooperative destination marketing organizations (DMOs), which provide the lion’s share of promotion of tourism for Shizuoka prefecture. In this paper, a methodology to evaluate economic impacts on the sightseeing area is developed. The evaluation is based on the number of tourists who visited and the length of stay in the municipality. Then, an inter-regional input–output model (consisting of 35 municipalities and 37 industrial sectors) at the municipality level is estimated to evaluate the spillover effects between cities and towns. The non-survey method based on the gravity-RAS method is used on the inter-regional input–output table estimate. Economic hotspots with economic spillover effects were identified for Shizuoka prefecture. Moreover, the economic impacts of partnerships in sightseeing areas in the three regions of DMO, namely, Suruga DMO, Hamamatsu DMO, and Izu DMO, are also measured.

Interregional Input-Output Optimization Model as a Tool for Evaluating the Efficiency of Large-Scale Railway Projects

Russian abstract: В статье дано описание инструментария оптимизационной межотраслевой межрегиональной модели - железнодорожный транспорт (ОМММ-ЖДТ), применяемого для получения макроэкономических оценок последствий реализации крупномасштабных железнодорожных проектов (КПжд), представлена схема функционирования информационно-программно-модельного комплекса ОМММ-ЖДТ. Приведено формальное описание транспортных связей, позволяющих моделировать ключевой показатель развития железнодорожной отрасли - объем транспортной работы как сумму грузооборота и пассажирооборота. Развивается идея оценки КПжд (на стадии предпроектного замысла) с позиций «многослойного» сценарного подхода, при котором крупномасштабный проект рассматривается как элемент стратегии развития железнодорожной отрасли и одновременно сама отраслевая стратегия встраивается в систему народно-хозяйственных сценариев-контрастов. Для моделей данного класса предложен приближенный алгоритм расчета динамики инвестиций в развитие отрасли, который позволяет не только отслеживать влияние рассматриваемого КПжд на инвестиционную динамику отрасли, но и сопоставлять ее инвестиционные программы (являющиеся объектом моделирования в ОМММ-ЖДТ) с программами развития других отраслей, переводя объемные показатели в показатели динамики. English abstract: The article describes a set of tools for an inter-regional input-output optimization model – rail transport (OMMM-RT) used for a macroeconomic evaluation of the consequences of large-scale railway projects (LRWP) and presents a functional diagram for the OMMM-RT informational program model package. We give a formal description of transport networks that makes it possible to model the amount of transport load as a sum of cargo and passenger turnover, which is a headline development indicator in the rail industry. We elaborate an idea to evaluate LRWP (at its front-end phase) from the perspective of a «multilayered» scenario approach where a large-scale project is viewed as an element within the rail industry development strategy while the rail industry itself is embedded in the system of contrasting scenarios for the national economy. For the models of such sort we propose an appro - ximated algorithm aimed at computing investment dynamics in rail industry development, which helps not only track the effect of the LRWP understudy on the industry’s investment dynamics but also compare its investment prog - rams (modeling objects in OMMM-RT) with development programs from other industries, converting load indicators into dynamics. DOI: 10.15372/REG20190310

Evaluating the regional economy and industrial structure using IRIO and MRIO tables for municipalities in Aichi and Okinawa prefectures

In this paper, inter-regional and multi-regional input–output tables for municipalities in Aichi and Okinawa prefectures are estimated using a non-survey method. Regional multiplier effects, spillover effects, and feedback effects, among other related aspects, are measured using an inter-regional input–output model. A hypothetical extraction method is applied to a multi-regional input–output model and a method for assessing the importance of municipal industries is proposed. Using these metrics, we conduct a comparative analysis of the local economies of Aichi and Okinawa prefectures and the characteristics of their industrial structures. This paper offers a visual portrayal of interdependency characteristics among municipalities.

Economic and water dependence among regions: The case of Alto Tiete, Sao Paulo State, Brazil

Abstract To illustrate the importance of the regional scale of water uses, this paper identifies the direct and indirect water use of the Sao Paulo State Water Resources Management Units (WRMUs) and the rest of Brazil by focusing on Alto Tiete WRMU. The Alto Tiete WRMU has been suffering from water scarcity and its boundaries are similar to that of the Sao Paulo Metropolitan Region. To this aim, a subnational interregional input–output model was estimated with a high degree of disaggregation (83 sectors and 23 regions) and a detailed estimation of water use coefficients that differ not only among sectors but also among the regions was applied. These coefficients also took into account their regions’ endoclimatic characteristics. The resulting database allows quantifying the water embedded in the goods (virtual water) traded among Alto Tiete WRMU and other regions. The results show that despite its commercial trade surplus, Alto Tiete actually presents a virtual water trade deficit, showing that it exports goods that are less intensive in water use, while importing goods that are more water intensive. This study provides new insights and a scientific reference for public policies concerned with the management of water resources at the regional scale.

Analyzing Egypt's water footprint based on trade balance and expenditure inequality

Abstract Egypt is a very arid country, with a rapidly growing population driving water demand beyond its annual constant supply. According to Falkenmark Water Stress Indicator, Egypt has reached a high and chronic water scarcity level that restricts its ability to accomplish economic development goals. To this end, our study has two fundamental goals; [1] tracing the effects of Egypt Virtual Water (VW) trade on its real water availability, and [2] analyzing the effects of household consumption patterns on Egypt's water availability. We have thus conducted a consumption-based analysis of water use in Egypt, using an interregional input-output (IRIO) model between Egypt and the Rest of the World. Achieving the first goal, Egypt's National Water Footprint (NWF) and it's VW net exports for 57 sectors of production are calculated. Our results indicate that Egypt saves 8% of its NWF through imports, embodied mainly in wheat. However, Egypt virtually net exports 12% of its total available freshwater resources, embodied mainly in feed, alfalfa, and paddy rice. To understand the study second goal, households NWF per product are compared with their annual direct water use. Results indicate that they consume 11% of water directly and 89% virtually. Also, urban, and rural NWF per capita are calculated according to their different patterns of expenditure. Results show that urban NWF per capita is roughly 17% higher than that of rural households, reflecting their different consumption patterns. Urban citizens consume larger amounts of all products, excluding agricultural and textile products. The water embodied in household consumption in Egypt exacerbates the water scarcity crises. This effect is particularly seen in water reliant agricultural and animal products. Also, our results show the need to monitor international trade and the virtual flows of freshwater when exploring issues around freshwater scarcity.

Restricting water withdrawals of the thermal power sector: An input-output analysis for the northeast of the United States

Abstract As water scarcity and pollution of sources become increasingly severe and widespread, competition over this resource intensifies. Unlike much of the rest of the world, thermal power plants in the US are the biggest users of water due to heavy reliance on once-through cooling technology. This cooling technology withdraws large amounts of water and discharges it back almost in its entirety but at higher temperatures. These water withdrawals are increasingly subjected to legislation intended to reduce the effects of thermal pollution. We utilize an interregional input-output model for quantifying the money costs and the shifts in the distribution of power production by state and by technology when withdrawals and discharges of fresh water are restricted. This model allows for the choice among alternative power generation technologies with different cost structures within each state. We analyze a Baseline scenario for 2010 and alternative scenarios that impose constraints on water withdrawals and inter-state power transmission. Based on an annual analysis, we conclude that this region can satisfy its electric power requirements while fully complying with legislated water restrictions at moderate cost by compensating the curtailment of output from some plants by otherwise unutilized capacities of other plants in the region. When we revisit the analysis using a monthly time step, however, sharp seasonal variations exhibit a strong impact on economic costs. In the summer months, intra-state transmission does not suffice, and regional demand cannot be met in the absence of substantial inter-state transmission.