Evaluating the FLQ and AFLQ formulae for estimating regional input coefficients: empirical evidence for the province of Córdoba, Argentina

By A. T. Flegg, Leo Mastronardi, C. Romero. 2016

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ABSTRACT This paper uses survey-based data of the Argentinian province of Córdoba to conduct an empirical test of the performance of the Flegg's location quotient (FLQ) and augmented FLQ (AFLQ) formulae for estimating regional input coefficients. A comparison is made with conventional methods based on location quotients. The possibility of using prior information about the extent of self-sufficiency of particular sectors is explored. The empirical work employs a range of statistical criteria with contrasting properties, and examines performance in terms of each method's ability to estimate regional input coefficients, output multipliers and imports. Particular attention is paid to the problem of choosing a value for the unknown parameter δ in the FLQ and AFLQ formulae. These formulae are found to give the best overall results of the non-survey methods considered in the paper. However, the AFLQ typically produces slightly more accurate results than the FLQ, in line with the findings of previous studies.

Subfields: Economics and Econometrics, Environmental Engineering

View Paper: https://www.semanticscholar.org/paper/ee97b1e5ca482f95faf850d94605e634495e828e