Estimating regional input coefficients and multipliers: The Use of the FLQ is not a Gamble

This paper re-examines the Finnish evidence presented by Lehtonen and Tykkyläinen on the use of location quotients (LQs) in estimating regional input coefficients and multipliers. They argue that the choice of an LQ-based method is a gamble and that there is no single method that can be recommended for general use. It is contended here that this evidence is erroneous and that the FLQ yields results far superior to those from competing formulae, so it should provide a satisfactory way of generating an initial set of input coefficients. The choice of a value for the parameter & is also examined.