Uncertainty treatment in input-output analysis

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The Working Paper seeks to disseminate original research in economics. The opinions and analyses in the Working Paper are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Universidad Loyola Andalucía. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. © Fundación Universidad Loyola Andalucía, Sevilla, 2015 ISSN: 2444-2976 (on line)
UNCERTAINTY TREATMENT IN INPUT-OUTPUT ANALYSIS* Umed Temurshoev Department of Economics Universidad Loyola Andalucía, Campus Palmas Altas C/ Energía Solar 1, Ed. G, 41014 Seville, Spain E-mail: utemurshoev@uloyola.es Forthcoming chapter in Handbook of Input-Output Analysis (edited by Thijs ten Raa) Abstract This work provides an extensive overview of the input-output (IO) literature, both theoretical and empirical, dealing with the inherent IO data uncertainty issues. The survey is carried out on the basis of a specific uncertainty technique used, rather than taking a chronological overview approach, which also allows for easier comparisons and linking of the outcomes of the individual contributions. Thus, we discuss the literature within seven methodological blocks (sections), which include deterministic error analysis, econometric and other (non-Bayesian) statistical approaches, random error analysis and probabilistic approach, full probability density distribution approach, Monte Carlo analysis, Bayesian approach, and other techniques. Within each section, the literature on a certain topic is reviewed in its historical context, which helps to clarify the state of the art. Our main findings from this survey, related discussions, final remarks and observations are given in the concluding section. Keywords: input-output uncertainty, deterministic and random error analysis, stochastic inputoutput analysis, Monte Carlo simulations, Bayesian approach JEL Classification: C67, D57, R15 ________________________ * The author is grateful to Thijs ten Raa for his constructive assessment and suggestions. We have also benefitted from remarks received from Randall Jackson, Michael Lahr, Ronald Miller, Glen Peters, João Rodrigues and José Rueda-Cantuche. The author is particularly thankful to Geoffrey Hewings for his numerous valuable comments and suggestions.
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Page 6 and 7: In this chapter, we provide an exte
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Page 22 and 23: , (5) where Y is total employment (
Page 24 and 25: 4. RANDOM ERROR ANALYSIS AND PROBAB
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Page 30 and 31: 1994). Consistent with the ten Raa
Page 32 and 33: . (19) Assuming that total outputs
Page 34 and 35: individual firm has a pdf reflectin
Page 36 and 37: output values are computed. Some of
Page 38 and 39: Garhart (1985), however, raised con
Page 40 and 41: deviations (RSDs, i.e. variable cha
Page 42 and 43: factors have relatively small varia
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Page 46 and 47: adopted as well in order to trace t
Page 48 and 49: At the same time, we also observe t
Page 50 and 51: Brown, D.M. and F. Giarratani (1979
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Gurgul, H. (2007), 'Stochastic inpu
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Lahiri, S. and S. Satchell (1985),
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Park, S.-H. (1970), „Least square
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Sonis, M. and G.J.D. Hewings (1995)
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West, G.R. (1990), „Regional trad
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