THE PERFORMANCE OF ALTERNATIVE INTEGRATION STRATEGIES FOR COMBINING REGIONAL ECONOMETRIC AND INPUT-OUTPUT MODELS

As the number of integrated econometric and input-output models appear ing in the literature grows, the need for a closer examination of the different approaches towards integration is warranted. This paper sugg ests a taxonomy of strategies for combining econometric and input-outp ut models at the regional scale. The properties of the different integ ration strategies are then examined From a theoretical perspective, fo cusing on the treatment of model closure, dynamic representation, inte rregional linkages, sectoral aggregation, and estimation issues. Initi al empirical insight as to the simulation and impact analysis capabili ties of the alternative integration strategies is provided through a s eries of experiments employing integrated multiregional econometric an d input-output models for five regions in Southern California. The res ults suggest that integrated models as a class can provide for improve d forecasting accuracy as well as more comprehensive impact analysis c apabilities over traditional non-integrated models. Additional insight s are provided regarding the sensitivity of model performance to the c hoice of integration strategy.