The efficiency of the cross-entropy method when estimating the technical coefficients of input–output tables. Issue 1 (2nd January 2020)

• Record Type: Journal Article
• Authors: Lamonica, Giuseppe R.; Recchioni, Maria C.; Chelli, Francesco M.; Salvati, Luca
• Is Part Of: Spatial economic analysis. Volume 15:Issue 1(2020)
• Page Start: 62
• Page End: 91
• Publication Date: 2020-01-02
• Subjects: regional input–output tables -- location quotient -- entropy method; C67 -- O18 -- R15; Space in economics -- Periodicals; Economic geography -- Periodicals; Space in economics -- Econometric models -- Periodicals; Urbanization -- Periodicals; Espace (Économie politique) -- Périodiques; Économétrie -- Périodiques; Géographie économique -- Périodiques; Économie industrielle -- Périodiques; Économie du travail -- Périodiques; Économie urbaine -- Périodiques; Politique économique -- Périodiques; Relations économiques internationales -- Périodiques; 330.9
• DOI: 10.1080/17421772.2019.1615634
• Languages: English
• ISSNs: 1742-1772

Abstract

ABSTRACT: Updating or estimating regional input–output tables is a challenging task addressed with non-survey methods. These can be classified into two groups: location quotient (LQ) methods and constrained matrix-balancing methods. This paper focuses on the second group and, specifically, on the performance of the cross-entropy method (CE). The most important finding is that the RAS method slightly outperforms the CE method on average, but its efficiency varies greatly from country to country. On the contrary, the performance of the CE method is more stable over countries and time. More interestingly, a fair implementation of the CE method boosted by the Flegg location quotient (FLQ) method outperforming the competing CE approach in terms of accuracy.