Input-Output Theory and Table Questions

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    ljvoves
    Regarding [url=https://implan.com/index.php?option=com_content&view=article&id=497:key-assumptions&catid=187&Itemid=2]the assumptions.[/url] I think there is some wrong language in one of them: The Commodity Technology Assumption starts with "The Industry Technology Assumption" Seems like that was the previous one which was already explained and this one is about commodities and byproducts made by the industry. See below: Thanks, Dale Can I expect anything from IMPLAN regarding my earlier request about info on the model. If so related to that I've got my answer to the one about the matrix algebra and theory associated with the "prod. func." report. Thanks. Under the [b]Commodity Technology Assumption[/b] Header "The industry technology assumption comes into play when data is collected on an industry-by-commodity basis and then converted to industry-by-industry matrices. It assumes that an industry uses the same technology to produce each of its products. In other words, an industry has a primary or main product and all other products are byproducts of the primary product. The production function is a weighted average of the inputs required for the production of the primary product and each of the by-products."
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    ljvoves
    Actually, looking over the assumptions, I can't figure out where there is a differentiation between the three Fixed Commodity Input Structure, Industry Technology Assumption and Commodity technology assumption. Fixed commodity says that the inputs are fixed. Ind Tech says the all byproducts increase together to stay at same ratio when output increases. Commodity Tech is hard to understand but the net result is sort of a sum of the other two above it seems. Is the key the term "technology" when it states that the industry uses the same technology to produce each of its products and that that technology doesn't change? Maybe that's different from the commodities changing but then the title of the assumption is "Commodity Tech. Assumption". Thanks for any suggestions or guidance of this one. Dale
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    IMPLAN Support
    Hi Dale, They are distinct but related concepts. 1. Fixed Input Structure: Industry absorption coefficients are constant. 2. Industry Technology Assumption: Industry by-product coefficients are constant. Point 1 happens because of Point 2. We assume that when the output of Industry A increases by 10%, that this increase is spread across all the by-products that industry makes, and thus the industry will need 10% more of ALL of its inputs! 3. Commodity technology assumption: Commodity absorption coefficients are constant, regardless of the Industry or Institution that produces that commodity. IMPLAN does not have commodity production functions, only industry production functions. This assumption comes into play when we redefine the data so that hotel restaurant activity is moved to the restaurant sector, hotel casino activity is moved to the casino sector, etc. We assume that the inputs required to run a restaurant is the same whether that restaurant is in a hotel or is stand-alone. Did you see this link? http://implan.com/index.php?option=com_glossary&id=17&letter=C
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