A Comparison of Annual and Benchmark Input-Output Tables in Regional Economic Modeling.

As the economy evolves, so do the coefficients of input-output (I-O) tables. Yet input substitutions occur primarily within economic sectors rather than between them. Consequently, at broader levels of economic aggregation, the annual revision of I-O tables may prove unnecessary. This study compares annual I-O accounts to a fixed benchmark I-O table using integrated-small area modeling of the industrial sector. The model uses annual data on manufacturing employment at primarily the 2-digit SIC level for the St. Louis metropolitan area. Annual I-O accounts do not appear to improve the estimation results at this degree of aggregation.