Chapter 1
INTRODUCTION


This document introduces the reader to what has come to be known as "regional impact analysis." This form of analysis typically emphasizes the regional benefits associated with changes in structure of a regional economy and is normally based on demand-oriented models of local economies.

Our intention is to introduce the reader to the family of models known as regional input-output models. And a primary objective is to show that the models we use in economics are well- structured. I have tried to present the models in such a way that understanding the logic and algebra of the simplest economic-base model leads to an understanding of the only slightly more complex regional input-output models and interregional models. The advanced models become matrix- algebra extensions of the simple models and are remarkably painless to understand.

Chapter 2 starts with the simplest model in regional economics -- the economic-base model -- and develops a pattern of model construction which will be followed in all succeeding models.

Chapter 3 presents the regional input-output table as a description of the economy using on simple accounting conventions.

Chapter 4 develops the logic of input-output models in an easily understood extension of the logic of economic-base models.

Chapter 5 focuses on regional input-output multipliers and thus is the chapter of most concern for analysts interested solely in interpretation of impact analyses.

Chapter 6 is a brief extension into interregional models. Here the methods of input-output analysis are applied to economic base models to point toward the interpretation of interregional input-output models.

Chapter 7 lays out the commodity-by-industry format in common use in constructing input- output tables since 1970. This is the format in which data is now currently available at the national level.

Chapter 8 builds the input-output model in industry-by-industry terms from the tables presented in Chapter 7. These two chapters parallel Chapters 3 and 4 in developing the logic of the model.

Finally, Chapter 9 provides a brief discussion of ways to build input-output models using nonsurvey techniques. It is relatively generic and has not yet been extended to cover the various commercially available systems.


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