Issue 1

Presidential Address of the 15th Pacific Regional Science Conference Organisation Meeting and the 21st Australian and New Zealand Regional Science Association Inc. Conference

TONY SORENSEN

Page Number - 5

To the extent to which economic analyses of the regional impacts of nomic change rely on national input-output data to represent the interrelationships between industry sectors, multiplier calculations are likely to involve substantial overestimation of the final effect. This is because national data contain no information on leakages from a region, other than the lower bound implied by national imports. Region-specific adjustments to nationally constructed input-output coefficients are clearly crucial, but procedures for reallocating coefficients from the inter-industry table to regional " imports" are data intensive, time consuming and prone to contamination by ad hoc reallocation assumptions. In this paper, a structured approach to the integration of regional information with national input-output data is proposed. The approach is based on regional sampling followed by econometric estimation of regional input-output tables using a restricted estimator which imposes technological constraints implied by the national input-output matrix. The approach allows various additional assumptions, such as the extent to which a region is isolated and the extent to which a region may be viewed as a microcosm of the economy, as well as other region and industry-specific information, to be imposed in the estimation. The approach can be implemented with a minimal amount of regional sampling (for example, with sample information on regional sourcing of one input only) but lends itself to much more extensive use of regional sample information in a structured context.

RUSSEL J. COOPER

Page Number - 15

Originally, applications of input-output models were carried out at national levels. More recently, interest in economic analysis at the regional level has led to modifications of input-output models in order to deal with regional issues. The main theme of this paper lies in showing how to extend and elaborate conventional input-output analysis at regional level to derive some meaningful policy recommendations from a practical point view. Judging from recently developed analytical tools such as internal and/or external multiplier matrices, augmented input coefficient matrices, hierarchical feedback loops and interregional linkages including positive and/or negative feedback effects, there is a need for theoretical assessments need to be developed alongside empirical applications.

TAKEO IHARA

Page Number - 43

The last thirty years have seen an increasing development and use of extended input-output models, in which the household sector is disaggregated to differentiate between various type of household. The majority of this work has been developed at a single region level and has recently included the incorporation of labour market accounts to analyse the relationship between labour supply and labour demand. In this paper we extend this type of analysis from a single region model to a bi-regional model. We outline a prototype model and highlight the incorporation of commuting patterns as a relatively new development in this son of model. The solution of the model is derived, in general form, and some observations made about the implications of the solution. We conclude by analysing the characteristics of some of the variables contained within the inverse, and raising some more general questions about possible limitations of the model.

JOHN H. LI. DEWHURST, MOSS MADDEN

Page Number - 55

Two major economic transformations, viz. a rural/industrial and an industrial/service-oriented change, have affected the structure of regional labour markets in Japan. Technological change and changing attitudes towards work have been major forces in shaping the spatial patterns of these transformations. These patterns are examined with respect to their implications for the core-periphery relations. A major question in this context is to what extent there has been a tendency towards convergence or whether the forces of divergence have been stronger. Important indicators to measure the dynamic aspects of this spatial transformation process are differences in types of R & D employed, changing participation rates of males and females and the spatial patterns of job creation and job destruction. It appears that the existing pattern of core-periphery relations is rather persistent over time, with a slight tendency for the core region to incorporate some upward transitional regions and in this way, extend its spatial domain.

G.A. VAN DER KNAAP, P.W. TH. GHIJSEN

Page Number - 73

The emergence of strengthened and expanded free trade areas has created a need for careful analysis of the nature of internal and external dependence among nations. This paper uses the 1990 intercountry input-output tables for the four main countries that are integrated into Mercosur (Brazil, Argentina, Chile, and Uruguay) to analyze the economic structure of the countries when considered as a whole system. The analysis focuses on uncovering alternative views of the roles of linkages, multipliers, and key sectors in input-output systems in order to an provide insight into the way in which the economies are integrated, the strength of the integration and the potential consequences of action in one economy on the rest of the system.

MARCO ANTONIO MONTOYA, JOAQUIM J.M. GUILHOTO

Page Number - 93

Multiregional computable general equilibrium (MRCGE) models are beginning to become established as an important tool in regional economic analysis. In Australia, two large-scale MRCGE models, FEDERAL and MONASH-MRF, are in widespread use. A great advantage of these models for analysing policy-oriented regional questions is their capacity to handle enormous detail about the structure of the regional economies concerned and about the interrelationships which exist between them. On the other hand. their very complexity exacerbates the task of uncovering the major economic mechanisms which lie behind a set of simulation results. In this paper we use a miniature version of the two-region FEDERAL model, MF, as a means of simplifying the task of establishing the major mechanisms involved in the interregional transmission of economic impacts. We look at the illustrative case of a payroll-tax cut by one of the model's two regional governments. Central to our analysis is an extension of the conceptual framework of international trade theory to take into account the greater mobility of factors that exists across regions than across nations. This enables the impact on the real consumption of the passive region to be decomposed into three effects: a resource-allocation effect, a resource-movement effect and a terms-of-trade effect. We then demonstrate that for the MF payroll-tax cut simulation, the transmission of impacts from the policy-initiating region to the passive region can be easily explained in terms of the three effects.

JOHN R. MADDEN, HOM M. PANT

Page Number - 113

The main purpose of this paper is to examine validity and applicability of a spatial computable general equilibrium (SCGE) model by comparing the results obtained from an application of the SCGE model with the observed data, the Japanese nine-region interregional input-output table. In SCGE modelling trade models play a key role. This paper also pays a special attention to the integration of spatial and economic concepts of transport into an equilibrium framework. We show the two basic approaches to model transport sector, which generate an equivalent input-output table. After addressing a unified approach connecting these two approaches, we show the testing results of the performance of the SCGE model developed by Miyagi and Honbu.

TOSHIHIKO MIYAGI, KENICHI HONBU, KEISUKE INOUE

Page Number - 143

The CSIRO, in co-operation with major stakeholders in the tourism industry and related academics, recently initiated a project to investigate the long term viability of tourism and assess its impact on the economy and environment. This project is called Tourism 20/20. Within the Tourism Futures sub-project, a decision was made to develop a decision support framework to specifically handle the nexus between tourism and the environment in an economy-wide interregional context. This paper describes the proposed model which is based on the existing interregional input-output and econometric model for Queensland and enhanced with a price-sensitive supply model which can evaluate the effects of both supply and price shocks, such as restrictions on the usage of certain facilities due to potential environmental degradation and related transport and facility pricing. The modelling framework is an attempt to extend the CGE model structure to encompass various forms of disequilibrium, especially those caused by effects such as sunk investments in infrastructure and lags in the provision of facilities to meet changing demands. It is believed that such a product fills a niche between the important CGE studies of national tourism or tourism for a single State, and more local studies of a single region. Whereas infrastructure development policies and environmental capacity restrictions are often specific to single regions, they can generate significant spill-over effects on tourism in adjacent regions.

GUY R. WEST, JOHN R. ROY

Page Number - 161

In this paper a recycling activity is introduced into an input-output model in which ordinary production as well as pollutant abatement activities take place, and the effects of the introduction of the recycling activity are examined. The recycled good is assumed to be different from the other commodities. Similarly, the pollutant used in the recycling activity either has or has not been subject to the abatement. Three different combinations of activity form the analytical framework, For all these combinations, it is the case that if the recycling activity is efficient the introduction of recycling has favourable effects upon employment as well as the environmental aspects, although the criterion for the efficiency is slightly different from case to case.

YOSHIO KIMURA

Page Number - 177