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MEASURING THE EFFECT OF COST VARIATION ON INDUSTRIAL OUTPUTS *
Author(s) -
Liew Chong K.,
Liew Chung J.
Publication year - 1988
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.1467-9787.1988.tb01374.x
Subject(s) - economics , econometrics , wage , variation (astronomy) , variable (mathematics) , labor cost , elasticity (physics) , microeconomics , labour economics , mathematics , engineering , physics , materials science , astrophysics , composite material , mechanical engineering , mathematical analysis
. This paper introduces the household interactive variable input‐output (HIVIO) model to measure the effect of cost variation on industrial outputs. The model produces a variety of cost elasticities that separate out impacts on industrial prices, imports, and outputs, with “own” and “cross” elasticity components. Like the conventional input‐output multipliers, these cost elasticities can be useful parameters to evaluate the substituting behavior of firms and consumers. By using the 1980 Korean input‐output transactions table, we find the wage and import price effects on industrial prices, outputs, and import demands.