What Can Demographic–Economic Modeling Tell Us about the Consequences of Regional Decline?

Abstract

The aim of this article is to demonstrate how a particular modeling framework, based on extended input–output analysis, can be used to obtain a clearer understanding of the impact of regional decline of the effects of high, and rising, unemployment; of falling industrial final demand; of welfare payments; and of declining population. The activity–commodity framework used here provides a systematic way of adding demographic variables to the familiar Leontief interindustry model and the extended inverse derived from it provides a rich source of information about the interaction of demographic and economic change, expressed as demographic–economic and economic–demographic multipliers. Drawing on the author’s research in the 1980s and 1990s, this article considers two empirical examples to show the framework’s analytical value: a simple extended model is used to assess the distributional effects of welfare payments in a declining region; and a more elaborate version is linked to a set of regional labor market accounts, summarizing intercensal change in population and employment. This model is used to produce a comprehensive assessment of the effects of population and employment change in two UK regions, one a growing region (East Anglia) and the other a region in decline (Merseyside). In a final section, the benefits and limitations of the extended input–output modeling framework are discussed in comparison with some of the alternative modeling frameworks that are currently available.

Keywords

extended input–output models regional decline impact analysis

Get full access to this article

View all access options for this article.

References

Barras

Broadbent

T. A.

. 1975. A Framework for Structure Plan Analysis (PRAG TP8). London, UK: CES Ltd.

Barras

Broadbent

T. A.

. 1979. “The Analysis in English Structure Plans.” Urban Studies 16:1–18.

Barras

Broadbent

T. A.

. 1982. “A Review of Operational Models in Structure Planning. In Progress in Planning, Vol. 17, edited by Diamond

D. R.

McLoughlin

J. B.

, 255–68. Oxford, UK: Pergamon.

Batey

P. W. J.

1985. “Input-output Models for Regional Demographic-economic Analysis: Some Structural Comparisons.” Environment and Planning A 17:73–99.

Batey

P. W. J.

Madden

. 1981. “Demographic-economic Forecasting within an Activity-commodity Framework: Some Theoretical Considerations and Empirical Results.” Environment and Planning A 13:1067–83.

Batey

P. W. J.

Madden

. 1983. “The Modelling of Demographic-economic Change within the Context of Regional Decline: Analytical Procedures and Empirical Results.” Socio-economic Planning Sciences 17:315–28.

Batey

P. W. J.

Madden

. 1999. “The Employment Impact of Demographic Change: A Regional Analysis.” Papers in Regional Science 78:69–87.

Batey

P. W. J.

Weeks

M. J.

. 1989. “The Effects of Household Disaggregation in Extended Input-output Models.” In Frontiers of Input-output Analysis: Commemorative Papers, edited by Miller

R. E.

Polenske

K. R.

Rose

, 119–33. New York, NY: Oxford University Press.

Beaumont

Isserman

McMillen

Plane

Rogerson

. 1986. “The ECESIS Economic-Demographic Model of the United States.” In Population Change and the Economy: Social Science Theories and Models, edited by Isserman

, 203–36. Boston, MA: Kluwer-Nijhoff.

10.

Bracken

I. J.

1981. Urban Planning Methods. London, UK: Methuen.

11.

Breheny

M. J.

Roberts

A. J.

. 1978. “An Integrated Forecasting System for Structure Planning.” Town Planning Review 44:306–18.

12.

Breheny

M. J.

Roberts

A. J.

. 1980. “Forecasting Methodologies in Strategic Planning: A Review.” Papers of the Regional Science Association 44:75–89.

13.

Breheny

M. J.

Roberts

A. J.

. 1981. “The Forecasts in Structure Plans.” The Planner 67:102–04.

14.

Chen

2015. “The Role of Household Consumption in the Chinese Economy: Input-output Analyses.” Ph.D Thesis, University of Groningen, the Netherlands.

15.

Chenery

H. B.

Clark

P. G.

. 1959. Interindustry Economics. London, UK: Wiley.

16.

Clarke

1986. “Demographic Processes and Household Dynamics: A Microsimulation Approach.” In Population Structures and Models, edited by Woods

R. I.

Rees

P. H.

, 245–72. London, UK: Allen and Unwin.

17.

Conway

R. S.

1990. “The Washington Projection and Simulation Model: A Regional Inter-industry Econometric Model.” International Regional Science Review 13:141–65.

18.

Cross

D. T.

Bristow

M. R.

. 1983. English Structure Planning: A Commentary on Procedure and Practice in the Seventies. London, UK: Pion.

19.

Fullerton

H. M.

Prescott

J. R.

. 1975. An Economic Simulation Model for Regional Development Planning. Ann Arbor, MI: Ann Arbor Science.

20.

Geddes

1915. Cities in Evolution: An Introduction to the Town Planning Movement and to the Study of Civics. London, UK: Williams and Norgate.

21.

Hewings

G. J. D.

Jensen

. 1988. “Emerging Challenges in Regional Input-output Analysis.” Annals of Regional Science 22:43–53.

22.

Hynes

Jackson

R. W.

. 1988. “Demographics in Demographic-economic Models: A Note on the Basic Activity-commodity Framework.” Environment and Planning A 20:1531–36.

23.

Israilevich

P. R.

Hewings

G. J. D.

Sonis

Schindler

G. R.

. 1997. “Forecasting Structural Change with a Regional Econometric Input-output Model.” Journal of Regional Science 37:565–90.

24.

Isserman

A. M.

, ed. 1986. Population Change and the Economy: Social Science Theories and Models. Boston, MA: Kluwer-Nijhoff.

25.

Jackson

R. W.

Hynes

. 1988. “Demographics in Demographic-economic Models: A Reply to Madden.” Environment and Planning A 20:1543–45.

26.

Kim

Kratena

Hewings

G. J. D.

. 2015. “The Extended Econometric Input-output Model with Heterogeneous Household Demand System.” Economic Systems Research 27:257–85.

27.

Ledent

1982. “Long-range Regional Population Forecasting: Specification of a Minimal Demo-economic Model, with a Test for Tucson, Arizona.” Papers of the Regional Science Association 49:37–67.

28.

Leontief

1951. The Structure of the American Economy. New York, UK: Oxford University Press.

29.

Lisenkova

McGregor

P. G.

Pappas

Swales

J. K.

Turner

Wright

R. E.

. 2010. “Scotland the Grey: A Linked Demographic-computable General Equilibrium (CGE) Analysis of the Impact of Population Ageing and Decline.” Regional Studies 44:1351–68.

30.

Madden

1988. “Demographics in Demographic-economic Models: Notes on Two Activity-commodity Frameworks.” Environment and Planning A 20:1537–42.

31.

Madden

Batey

P. W. J.

. 1980. “Achieving Consistency in Demographic-economic Forecasting.” Papers of the Regional Science Association 44:91–106.

32.

Madden

Batey

P. W. J.

. 1986. “A Demographic-economic Model of a Metropolis.” In Population Structures and Models: Developments in Spatial Demography, edited by Woods

Rees

, 273–297. London, UK: Allen and Unwin.

33.

McGregor

P. G.

Partridge

M. D.

Rickman

D. S.

. 2010. “Innovations in Regional Computable General Equilibrium (CGE) Modelling.” Regional Studies 44:1307–10.

34.

McLoughlin

J. B.

1969. Urban and Regional Planning: A Systems Approach. London, UK: Faber.

35.

Mellor

1990. Patrick Geddes: Social Evolutionist and City Planner. London, UK: Routledge.

36.

Mitra-Kahn

B. H.

2008. “Debunking the Myths of Computable Equilibrium Models.” SCEPA Working Paper 2008-1, Schwartz Center for Economic Policy Analysis, the New School for Social Research, New York.

37.

Miyazawa

1968. “Input-output Analysis and the Inter-relational Multiplier as a Matrix.” Hitotsubashi Journal of Economics 9:39–55.

38.

Orcutt

Caldwell

Wertheimer

. 1976. Policy Exploration through Micro-analytic Simulation. Washington, DC: The Urban Institute.

39.

Partridge

M. D.

Rickman

D. S.

. 2010. “Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis.” Regional Studies 44:1311–28.

40.

Rose

A. Z.

1995. “Input-output Economics and Computable General Equilibrium Models.” Structural Change and Economic Dynamics 6:295–304.

41.

Schinnar

A. P.

1976. “A Multidimensional Accounting Model for Demographic and Economic Planning Interactions.” Environment and Planning A 8:455–75.

42.

Stone

1971. Demographic Accounting and Model-building. Paris, France: OECD.

43.

Tyler

Rhodes

. 1989. “A Model with Which to Forecast Employment and Population Change at the Regional and Sub-regional Level.” In Advances in Regional Demography, edited by Congdon

Batey

P. W. J.

, 124–49. London, UK: Belhaven.

44.

Wegener

. 1986. “Integrated Forecasting Models of Urban and Regional Systems.” In Integrated Analysis of Regional Systems, edited by Batey

P. W. J.

Madden

, 9–24. London, UK: Pion.

45.

West

G. R.

1995. “Comparison of Input-output, Input-output + Econometric and Computable General Equilibrium Models at the Regional Level.” Economic Systems Research 7:209–27.