314
Multipliers are based on BEA's national input-output accounts of 1982 and BEA's four-digit Standard Industrial
Classification (SIC) county wage and salary data (gen-'
erally no more than three years old), which are used to
reduce national coefficients to represent structure and
trading patterns of the regional economy specified by the
user. Regional multipliers are developed using a modified simple location quotient approach. Regions may
consist of one or more counties. (Chappelle, 1995, p. 3)
Documentation of the RIMS II model is found in
Bureau of Economic Analysis (1992).
21.4 Including Ecological,
Demographic, and
Social Variables in
Input-Output Analysis
Laurent and Hite (1972) provided a simplified
model that shows some promise for ecological assessment work. They summarize their model as follows (Laurent and Hite, 1971, p. 9):
An economic input-output table was constructed for the
Charleston, South Carolina SMSA on the basis of a field
survey. Considering this Leontief system as a general
theory of production, an environmental matrix showing
the inflow from the environment and outflow to the environment associated with one dollar of gross sales was
developed to fit within this general production model.
The linking of the economic model to the environmental matrix completed the general model.
The model can be represented most simply as
where E = a matrix of inflows to and outflows
from the economy to the environment
(I - A)-l = inverse matrix of an input-output
model of the region
R = matrix of the direct and indirect environmental impact of each economic sector
Laurent and Hite (1972) recommend developing
resource-income or environmental-income multipliers by dividing the usual income multipliers into
the R matrix. These multipliers provide a measurement of the trade-offs between pollution and
income. Roberts and Rettig (1975) used the Laurent and Hite approach in an analysis of the Clatsop (Oregon) County economy.
The use of input-output to forecast demographic
change is discussed in Stone (1966). Population accounting is necessary to develop a social accounting matrix (SAM), which, when linked to labor
Methods of Economic Impact Analysis
market information and household formation information, can provide an element of dynamics to
the input-output model. For a discussion of a social accounting matrix, see Holland and Wyeth
(1993). A model designed to trace linkages between
the regional economy, labor force, and the population is IPASS (Interactive Policy Analysis Simulation System), a dynamic simulation model that includes an input-output module to calculate
economic impacts. Olson et al. (1984, abstract p. i)
describes this model as follows:
The IPASS model is a dynamic analytical tool that forecasts growth and development of an economy. It allows
the user to introduce changes in selected parameters
based on different assumptions about socioeconomic
variables. The user can analyze the impact those changes
would have on the economy by comparing results of the
alternative situation with the original forecast. The program is interactive, and the user needs no previous experience in programming or model building.
This model has features worth considering when
conducting an ecological assessment because it
links the regional economy in an integral way to
the human population. For an application of this
model, see Maki et al. (1985).
21.5 Advantages and
Disadvantages of
Transforming Input-Output
Models to a Linear
Programming Format
There are a number of advantages to transforming
a regional input-output model into a linear programming (LP) model (for an early example of this
transformation, see Gass, 1958, pp. 167-170). This
is possible because an input-output model is essentially the simplest linear programming model
with the objective function to find that program of
production that exactly meets the exogenous demand schedule (demand-driven model) or the production program that exactly exhausts resource
supplies (supply-driven model). The most notable
advantages of transforming to an LP model are (1)
to incorporate of multiple policy objectives, (2) to
incorporate resource and other types of constraints,
(3) to have the ability to develop shadow pricing
of environmental quality variables, and (4) to isolate the best technological mix. The greatest disadvantages of such a modeling strategy are (1) with
resource and other types of constraints built into
the model, it becomes very specific to the situation
Multipliers are based on BEA's national input-output accounts of 1982 and BEA's four-digit Standard Industrial
Classification (SIC) county wage and salary data (gen-'
erally no more than three years old), which are used to
reduce national coefficients to represent structure and
trading patterns of the regional economy specified by the
user. Regional multipliers are developed using a modified simple location quotient approach. Regions may
consist of one or more counties. (Chappelle, 1995, p. 3)
Documentation of the RIMS II model is found in
Bureau of Economic Analysis (1992).
21.4 Including Ecological,
Demographic, and
Social Variables in
Input-Output Analysis
Laurent and Hite (1972) provided a simplified
model that shows some promise for ecological assessment work. They summarize their model as follows (Laurent and Hite, 1971, p. 9):
An economic input-output table was constructed for the
Charleston, South Carolina SMSA on the basis of a field
survey. Considering this Leontief system as a general
theory of production, an environmental matrix showing
the inflow from the environment and outflow to the environment associated with one dollar of gross sales was
developed to fit within this general production model.
The linking of the economic model to the environmental matrix completed the general model.
The model can be represented most simply as
where E = a matrix of inflows to and outflows
from the economy to the environment
(I - A)-l = inverse matrix of an input-output
model of the region
R = matrix of the direct and indirect environmental impact of each economic sector
Laurent and Hite (1972) recommend developing
resource-income or environmental-income multipliers by dividing the usual income multipliers into
the R matrix. These multipliers provide a measurement of the trade-offs between pollution and
income. Roberts and Rettig (1975) used the Laurent and Hite approach in an analysis of the Clatsop (Oregon) County economy.
The use of input-output to forecast demographic
change is discussed in Stone (1966). Population accounting is necessary to develop a social accounting matrix (SAM), which, when linked to labor
Methods of Economic Impact Analysis
market information and household formation information, can provide an element of dynamics to
the input-output model. For a discussion of a social accounting matrix, see Holland and Wyeth
(1993). A model designed to trace linkages between
the regional economy, labor force, and the population is IPASS (Interactive Policy Analysis Simulation System), a dynamic simulation model that includes an input-output module to calculate
economic impacts. Olson et al. (1984, abstract p. i)
describes this model as follows:
The IPASS model is a dynamic analytical tool that forecasts growth and development of an economy. It allows
the user to introduce changes in selected parameters
based on different assumptions about socioeconomic
variables. The user can analyze the impact those changes
would have on the economy by comparing results of the
alternative situation with the original forecast. The program is interactive, and the user needs no previous experience in programming or model building.
This model has features worth considering when
conducting an ecological assessment because it
links the regional economy in an integral way to
the human population. For an application of this
model, see Maki et al. (1985).
21.5 Advantages and
Disadvantages of
Transforming Input-Output
Models to a Linear
Programming Format
There are a number of advantages to transforming
a regional input-output model into a linear programming (LP) model (for an early example of this
transformation, see Gass, 1958, pp. 167-170). This
is possible because an input-output model is essentially the simplest linear programming model
with the objective function to find that program of
production that exactly meets the exogenous demand schedule (demand-driven model) or the production program that exactly exhausts resource
supplies (supply-driven model). The most notable
advantages of transforming to an LP model are (1)
to incorporate of multiple policy objectives, (2) to
incorporate resource and other types of constraints,
(3) to have the ability to develop shadow pricing
of environmental quality variables, and (4) to isolate the best technological mix. The greatest disadvantages of such a modeling strategy are (1) with
resource and other types of constraints built into
the model, it becomes very specific to the situation