Measuring structural change in the I‐O production function by biproportional methods: A theorem of price invariance

Abstract

This research note demonstrates the advantage of biproportional projection over the ordinary (proportional) method of technical coefficients in input-output analysis: the former is insensitive to price changes, the latter is not so. Consequently, structural change can generally be measured using the biproportional filter on tables in current prices instead of inflation-adjusted matrices, without changing anything in the result. This may be useful when price information and inflation-adjusted matrices are unavailable. The result can be applied to matrix updating. Copyright (c) 2006 the author(s). Journal compilation (c) 2006 RSAI.

Measuring output structures of multinational construction industries using the World Input‒Output Database

“…The changing mix of the industry components can be recognized as the main factor behind the change of inputÀoutput coefficients through time (Pietroforte et al 2009). Similarly, Mesnard (2005) summarized that the change in the input-output coefficients matrix could be used to define structural change by comparing variations between coefficient matrices at two different times, which are identified as structural change. Following this concept, the application of input coefficients matrix in measuring input structures of the construction industry was found in both regional (Pietroforte et al 2009) and crossnational studies (Gundes 2011b).…”

The Construction and Analysis of a Consistent Set of Input–Output Tables for the Irish Economy

“…1985) is biproportionally adjusted to fit the row sums and column sums of the former table (1975), thereby filtering the structural change from the overall economic growth over time. In the absence of constant price I-O tables this provides a sound basis for comparison as the biproportional filter is insensitive to homogeneous production price changes (see de Mesnard (2006)).…”