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THE ROLE OF ERROR STRUCTURE IN SIMULATIONS ON REGIONAL INPUT‐OUTPUT ANALYSIS *
Author(s) -
Garhart Robert
Publication year - 1985
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1985.tb00305.x
Subject(s) - multiplicative function , multiplier (economics) , closure (psychology) , computer science , error analysis , additive model , approximation error , econometrics , mathematics , statistics , algorithm , economics , mathematical analysis , market economy , macroeconomics
Previous simulation experiments on regional input‐output analysis have concluded that regional purchase coefficients are more important than technical coefficients in contributing to multiplier accuracy. This paper shows that the multiplicative error structure used in those experiments may have biased the results. A new error structure, combining a multiplicative and an additive component is introduced, and simulations are conducted on randomly generated models. The analysis shows that the results are sensitive to the relative magnitudes of the two error components, as well as to the closure of the model.