Interpreting the Institutuion Industry Demand Repo

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sergenra

• January 19, 2011 23:27

I would like to know if I am interpreting the Institution Industry Demand report correctly. I am looking at the financial services cluster in my region. I uses sectors 354 through 359. I added up all the institution demand (HouseholdDemand,FedGovDemand, StateLocalDemand, Capital Inventory, DomesticExports, ForeignExports) and divide Domestic and Foreign Exports by this total. Is it correct to say about 14% of the total demand comes from outside the region? This would seem like a rather low export level & not necessarily a cluster that would drive regional growth. Also, why would sector 358 (Insurance agencies, brokerages, and related activities)have all demand from domestic exports?

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  DougO

  • January 19, 2011 23:44

  What you say is correct. As far as being low, we have little data to determine what actual flows are. In the gravity model we give it a fairly high impedence (friction) because we wanted to encourage local use for banking, home mortgages and business loans. When households (or anyone) buy insurance, I-O treats that as a purchase from the insurance carrier sector. Agents are paid as part of the insurance carrier production function. There are no foreign exports because there are none in the BEA benchmark. There would be mostly intermediate demand for this sector.

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