Leonardo Javier Mastronardi

Evaluating the FLQ and AFLQ formulae for estimating regional input coefficients: empirical evidence for the province of Córdoba, Argentina

ABSTRACT This paper uses survey-based data of the Argentinian province of Córdoba to conduct an empirical test of the performance of the Fleggs location quotient (FLQ) and augmented FLQ (AFLQ) formulae for estimating regional input coefficients. A comparison is made with conventional methods based on location quotients. The possibility of using prior information about the extent of self-sufficiency of particular sectors is explored. The empirical work employs a range of statistical criteria with contrasting properties, and examines performance in terms of each methods ability to estimate regional input coefficients, output multipliers and imports. Particular attention is paid to the problem of choosing a value for the unknown parameter δ in the FLQ and AFLQ formulae. These formulae are found to give the best overall results of the non-survey methods considered in the paper. However, the AFLQ typically produces slightly more accurate results than the FLQ, in line with the findings of previous studies.

The cost of failing to prevent gas supply interruption: A CGE assessment for Peru

Since 2000, there has been a noticeable progress in social and economic indicators of Peru. Even though the country risk has diminished dramatically, several threats remain. One of the key ones is the possibility of involuntary (transitory or permanent) interruptions of the natural gas pipeline transportation system. Given the significant endowments of natural gas reserves in Peru (Camisea gas field) and its relevance in the economy, shortages of natural gas due to pipelines failures can wreak havoc because it is important from the government revenue and it is a basic input for domestic manufacturing and household energy consumption. Earthquakes, unexpected social unrest or intentional actions could interrupt the service of some of the fundamental pipelines of the grid. One pipeline with three branches connects the upstream to the distribution centers. To take into account the economy wide impact of the interruption of gas supply we built a CGE model considering modifications of relative prices, markets reactions and income effects. We simulate different scenarios considering the three most important branches of the Camisea pipeline. The results show that those shocks would represent an important decline of GDP in the short run when substitution is limited (about or 0.2% by day) and an abrupt reduction of welfare for households. The estimated daily cost is in the range of 335 million of USD for the worst case scenario.