Introduction

Originally, applications of the input–output model were carried out at national levels – for example, to assess the impact on the individual sectors of the US economy of a change from war to peacetime production as the end of World War II approached. Over time, interest in economic analysis at the regional level – whether for a group of states (as in a federal reserve district), an individual state, a county or a metropolitan area – has led to modifications of the input–output model which attempt to reflect the peculiarities of a regional (subnational) problem. There are at least two basic features of a regional economy that influence the characteristics of a regional input–output study.

First, although the data in a national input–output coefficients table are obviously some kind of averages of data from individual producers located in specific regions, the structure of production in a particular region may be identical to or it may differ markedly from that recorded in the national input–output table. Soft drinks of a particular brand that are bottled in Boston probably incorporate basically the same ingredients in the same proportions as are present in that brand of soft drink produced in Kansas City or Atlanta or in any other bottling plant in the United States. On the other hand, electricity produced in eastern Washington by water power (Coulee Dam) represents quite a different mix of inputs from electricity that is produced from coal in Pennsylvania or by means of nuclear power or “wind farms” elsewhere.