Net Multipliers Avoid Exaggerating Impacts: With A Bi-Regional Illustration for the Dutch Transportation Sector

Industries often promote their interests by arguing that they have a big impact on the rest of the economy. This poses the question of how to measure the importance of an activity. To answer this, the literature often uses (regional) input-output analysis. This paper critically reviews the traditional use of multipliers in such cases. To avoid double-counting impacts and to solve related conceptual problems, the net multiplier concept is introduced. This net multiplier is illustrated empirically for the Dutch transport sector using a Type II biregional input-output model for the Netherlands. Copyright 2002 Blackwell Publishers Inc.