Randall W. Jackson

Alternative Input-Output Matrix Updating Formulations

There has been a recent resurgence of interest in biproportional adjustment methods for updating and interpreting change in matrix representations of regional structures, most commonly input-output accounts. Although the biproportional method, commonly called the RAS technique in the input-output literature, has been shown to have a number of theoretically appealing properties, various alternatives do exist. In this paper, we develop and empirically assess a number of alternatives, comparing performance and examining the attributes of these adjustment methods. Two of these are sign-preserving updating methods for use when tables contain both positive and negative entries. One of these is shown to generate less information gain than does a generalized RAS method that Junius & Oosterhaven (2003) formulated to deal with matrices with both positive and negative values. Overall, while the RAS method continues to be commonly used and its choice is often rational, alternative methods can perform as well or better along certain dimensions and in certain contexts.

An evaluation of alternative measures of regional industrial diversification

Jackson R. W. (1984) An evaluation of alternative measures of regional industrial diversification, Reg. Studies 18, 103–112. Industrial diversity continues to be a goal in regional planning and policy contexts. While the concept has strong intuitive appeal, its definition and measurement suffer from problematic theoretical and statistical issues. An empirical analysis of the relationship between employment stability and four measures of diversity for multicounty regions in the State of Illinois is presented. The results indicate that the nature of the stability/diversity relationship is swamped by the measurement and estimation techniques employed. Current diversity measures are deemed inadequate for regional policy makers. The ensuing discussion highlights a number of conceptual and statistical issues which must be addressed by practitioners.

Regionalizing National Commodity-by-Industry Accounts

Exended input-output (IO) models are increasingly prominent in regional economic analysis. Social accounting matrices and associated multiplier decompositions, IO econometric model hybrids and computable general equilibrium models are finding greater acceptance in contexts in which simple IO models once dominated. Although the extended regional models build primarily on the foundation of regional, interindustry accounting frameworks, the data from which these regional accounts are drawn are most commonly in the form of a national commodity-by-industry account. Despite this longstanding fact, the IO table adaptation literature has focused almost solely on methods of adapting national interindustry accounts to regional economies. This paper presents a method designed specifically to regionalize commodity-by-industry accounts, in the context of the US reporting system. The focus on commodity-by-industry data demands a confrontation with several important issues that otherwise might go unattended. Using a particular system and its accompanying classification scheme ensures a comprehensive and consistent regionalization method.

The Role of Space in Public Capital Research

The role of public capital in the economy is an emerging research area with theoretical significance and societal and policy relevance. Several academic disciplines and public institutions are regular contributors to this research field. The range of findings of these studies extends from virtually no role to a very strong role for public capital in the economy. Reconciling the varied and sometimes contradictory results has not been a high priority among researchers. The lack of attention to spatial forces, an issue gaining attention only relatively recently, also has been troublesome. This article reviews public capital research along three primary dimensions: the dependent variable, scale of analysis, and attention to spatial processes. The authors emphasize scale and space as among the most important but least discussed differences among public capital studies and then focus on the nature of the economic processes at work and detectable at different scales of analysis.

A Causative Matrix Approach to Interpreting Structural Change

Regional economic structure is uniquely represented in the input–output matrix of interindustry transactions. Although changes in this matrix representation reflect certain changes in economic structure, there is no consensus on the measurement and interpretation of these changes. This paper assesses the utility of constant causative matrix methods for measuring, for interpreting, and potentially for forecasting structural economic change. The paper concludes with a discussion of special considerations and future research directions.

Clusters, Agglomeration, and Economic Development Potential: Empirical Evidence Based on the Advent of Slab Casting by U.S. Steel Minimills

Ten new steel plants were constructed in the United States from 1989 to 2001, each taking advantage of new steel slab casting technologies that gave scrap-based minimills access to the flat-products market. This market had been served previously exclusively by ore-based integrated mills. Some of the new minimills were built in established steel industry agglomerations. Others were built in greenfield locations with little or no prior steelmaking activity. This research, based on direct observation and plant visits, brings new evidence to bear on the nature and importance of agglomeration economies associated with steel production by analyzing industry clusters related to the advent of slab casting by steel minimills. The authors find that industry clusters can play an important role in the process of market entry; however, certain product and firm characteristics can shape the nature of industry agglomerations and their effect on firms and regions.

A Note on Adjusting National Input‐Output Data for Regional Table Construction

Regional analysts face a trade-off between timeliness and detail of commodity-industry data. The trade-off exists because the Bureau of Economic Analysis national aggregated annual update tables are published for years more recent than those for which the disaggregated benchmark accounts are available. Conventional wisdom holds that regionalization should precede aggregation, so a disaggregated foundation table is preferred to an aggregation of that same table. This paper shows that the Table Disaggregation and Adjustment (TDA) method of Jackson and Comer (1993) produces a better foundation for regionalization than an unadjusted benchmark, price-updated benchmark, or aggregated annual update table.

Shift-Share Analysis

Shift-share analysis is a growth decomposition method used to enhance the understanding of change in a system by comparing change in a region of interest with change in a relevant reference region. In geography, its most common use has been in decomposing regional employment growth into component parts: the national share, the industry mix, and the regional shift component. The national share is the growth that would have been expected had each regional industry grown at the national overall growth rate. The industry mix is the growth or decline that would be expected given the difference between the industrial and national growth rates. The regional shift is remainder of the change, which is unaccounted for by either national or industry-specific trends, and is therefore attributed to some dimension of regional character. Despite shortcomings, the simplicity of the basic shift-share model and the ease with which it can be applied has provided a pragmatic justification for its widespread use in regional analysis and has spawned extensions and adjustments in attempts to respond to various criticisms. While descriptive rather than explanatory, shift-share analysis can be used to advantage in highlighting regional industries that warrant further attention. Its flexibility and intuitive interpretation also make it useful in other analytical contexts.

Probabilistic input-output analysis: Modeling directions

Abstract Recent developments in probabilistic input-output modeling based on the full-distribution approach demonstrate the relationship between distributional forms of industry aggregates and regionally variant production characteristics. Variables such as market structure, establishment size, prices, labor productivity, technology, product mix, and ages of capital stock, all of which vary regionally, are determinants of the probabilistic structure of interindustry interaction. Two modeling directions are described in this paper. The first concerns formalizing the relationship between key variables at the regional level and particular forms of associated aggregate distributions. Once these relationships are specified, the dynamic character of interindustry structure can be developed. The second modeling direction follows on the first, and concerns the more general implications of the probabilistic perspective for regional economic modeling. One model demonstrated generates a nonlinear output growth path from a linear base-point projection of final demand. This model places the regional cyclical stability issue in a new light, and establishes a method for generating interval estimates of regional economic performance for forecasting purposes.

The spatial organization of production: An input-output perspective

Imagine an economy divided into n regions; as this economy grows and develops, what can be said about the way in which production changes? The input-output system of accounts-and more extensive versions of social accounting systems-provides a useful framework for examining the spatial organization of production. In this paper, several new concepts using input-output tables and their associated models are introduced in an attempt to aid this understanding. Within each economy, a fundamental economic structure (FES) is presumed to exist. The FES is comprised of a set of interactions that have the characteristics of predictability and analytical importance. The FES provides the basis for the development of a taxonomy of economies and thus the potential for describing the space-time (evolution) of the economic system. The evolution may be described by reference to a field of influence associated with change in single elements, whole rows or columns in the input-output table of the economy. These ideas are then linked with the processes of innovation diffusion through the productive system and innovation adoption in the consumption system. The presence of innovations thus provides a competitive environment and the locus of change within the system. The synergistic effects of changes in the productive and consumption components may be realized in a multiregional setting. The framework proposed provides a rich, conceptual and analytical organization for capturing system-wide effects of changes in the spatial organization of production. Potential links with the concept of a spatial multiplier, the role of industrial organization and the possibilities of spatial switching and reswitching (a la Sraffa) are also considered.